Question

1.A soft drink bottler incurred the following factory utility cost: $4,046 for 910 cases bottled and $4,109 for 1,010 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

$4.45

$4.07

$4.25

$0.63

2.The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March:

Corporate headquarters building lease	$	92,000
Cosmetics Department sales commissions-Northridge Store	$	6,400
Corporate legal office salaries	$	58,400
Store manager's salary-Northridge Store	$	11,400
Heating-Northridge Store	$	12,400
Cosmetics Department cost of sales-Northridge Store	$	32,400
Central warehouse lease cost	$	7,400
Store security-Northridge Store	$	14,400
Cosmetics Department manager's salary-Northridge Store	$	5,400

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores.

What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

$32,400

$44,200

$78,200

$38,800

3.Abare Corporation reported the following data for the month of December:

Direct materials	$	74,000
Direct labor cost	$	41,000
Manufacturing overhead	$	72,000
Selling expense	$	27,000
Administrative expense	$	45,000

The conversion cost for December was:

$117,000

$113,000

$187,000

$154,000

4.Calip Corporation, a merchandising company, reported the following results for October:

Sales	$	438,800
Cost of goods sold (all variable)	$	187,100
Total variable selling expense	$	18,900
Total fixed selling expense	$	16,000
Total variable administrative expense	$	9,400
Total fixed administrative expense	$	31,900

The gross margin for October is:

$390,900

$223,400

$251,700

$175,500

5.The following costs were incurred in April:

Direct materials	$52,000
Direct labor	$43,000
Manufacturing overhead	$35,000
Selling expenses	$31,000
Administrative expenses	$46,000

  
Conversion costs during the month totaled:

$207,000

$109,000

$78,000

$87,000

6.Kaelker Corporation reports that at an activity level of 7,500 units, its total variable cost is $526,500 and its total fixed cost is $78,650. What would be the total cost, both fixed and variable, at an activity level of 7,700 units? Assume that this level of activity is within the relevant range.

$621,390

$613,219

$605,150

$619,190

7.The following cost data pertain to the operations of Brentwood Department Stores, Inc., for the month of May:

Corporate legal office salaries	$	76,000
Shoe Department cost of sales-Brentwood Store	$	94,000
Corporate headquarters building lease	$	93,000
Store manager's salary-Brentwood Store	$	15,400
Shoe Department sales commissions-Brentwood Store	$	9,400
Store utilities-Brentwood Store	$	14,400
Shoe Department manager's salary-Brentwood Store	$	5,400
Central warehouse lease cost	$	12,400
Janitorial costs-Brentwood Store	$	12,400

The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the Brentwood Store. The central warehouse serves all of the company's stores.

What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?

$181,400

$42,200

$108,800

$93,000

8.During the month of April, direct labor cost totaled $19,000 and direct labor cost was 50% of prime cost. If total manufacturing costs during April were $89,000, the manufacturing overhead was:

$70,000

$19,000

$38,000

$51,000

9.Baker Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

Production volume		1,000	units		3,500	units
Direct materials	$	31.50	per unit	$	31.50	per unit
Direct labor	$	40.80	per unit	$	40.80	per unit
Manufacturing overhead	$	66.50	per unit	$	32.50	per unit

The best estimate of the total variable manufacturing cost per unit is:

$91.20

$18.90

$72.30

$31.50

10.Sobota Corporation has provided the following partial listing of costs incurred during August:

Marketing salaries	$	46,000
Property taxes, factory	$	17,200
Administrative travel	$	107,500
Sales commissions	$	48,900
Indirect labor	$	43,300
Direct materials	$	174,500
Advertising	$	144,800
Depreciation of production equipment	$	45,200
Direct labor	$	90,900

Required:

a. What is the total amount of product cost listed above?

b. What is the total amount of period cost listed above?

Answer 1

Ans- 1-Variable factory utility cost= Change in cost/ change in units

=4,109-4,046/ 1,010-910

=63/ 100

=$0.63

Hence, The correct option is D- 0.63.

Ans-2- Direct costs of the Cosmetics Department:-

Cosmetics Department sales commissions	$6,400
Cosmetics Department cost of sales	$32,400
Cosmetics Department manager's salary	$5,400
Total Direct Costs	$44,200

Hence, The correct option is b-$44,200.

Ans-3- The conversion cost for December was:

Conversion cost= Direct labor + Manufacturing overhead

=$41,000+ $72,000

=$113,000

Hence, The correct option is b-$113,000

Ans-4- The gross margin for October is:-

Gross Margin= Sales -Cost of goods sold

=$438,800-$187,100

=$251,700

Hence, The correct option is c-$251,700

Ans-5 The conversion cost=$43,000+$35,000=$78,000

Hence, The correct option is c-$78,000