Question

Carroll Corporation has two products, Q and P. During June, the company's net operating income was $28,000, and the common fixed expenses were $60,000. The contribution margin ratio for Product Q was 40%, its sales were $145,000, and its segment margin was $52,000. If the contribution margin for Product P was $50,000, the segment margin for Product P was:

Multiple Choice

• $8,000

• $52,000

• $36,000

• $88,000

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Krepps Corporation produces a single product. Last year, Krepps manufactured 34,060 units and sold 28,600 units. Production costs for the year were as follows:

Direct materials	$255,450
Direct labor	$173,706
Variable manufacturing overhead	$269,074
Fixed manufacturing overhead	$510,900

Sales totaled $1,172,600 for the year, variable selling and administrative expenses totaled $148,720, and fixed selling and administrative expenses totaled $214,578. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company's net operating income for the year would be:

Multiple Choice

• $27,846 higher than under absorption costing.

• $27,846 lower than under absorption costing.

• $81,900 higher than under absorption costing.

• $81,900 lower than under absorption costing.

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The following costs were incurred in May:

Direct materials	$43,700
Direct labor	$29,600
Manufacturing overhead	$22,600
Selling expenses	$17,000
Administrative expense	$31,100

Prime costs during the month totaled:

Multiple Choice

• $144,000

• $73,300

• $95,900

• $52,200

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Evan's Electronics Boutique sells a digital camera. The following information was reported for the digital camera last month:

Sales	$ 17,600
Variable expenses	9,680
Contribution margin	7,920
Fixed expenses	3,600
Net operating income	$ 4,320

Evan's margin of safety in dollars and percentage are closest to:

Multiple Choice

• $9,600 and 55%

• $8,000 and 83%

• $9,600 and 120%

• $8,000 and 45%

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For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________.

Multiple Choice

• fixed, decreasing

• fixed, increasing

• variable, decreasing

• variable, increasing

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Answer 1

The answer has been presented in the supporting sheet.