Emeka Company has provided the following information:
|
Sales price per unit |
$42 |
|
Variable cost per unit |
16 |
|
Fixed costs per month |
$18,000 |
Calculate the contribution margin per unit.
A.$58
B. $42
C. $16
D.$26
Tentacle Television Antenna Company provided the following manufacturing costs for the month of June.
|
Direct labor cost |
$132,000 |
|
Direct materials cost |
84,000 |
| Equipment depreciation
(straight−line) |
23,000 |
|
Factory insurance |
11,000 |
|
Factory manager's salary |
11,200 |
|
Janitor's salary |
5,000 |
|
Packaging costs |
19,000 |
|
Property taxes |
16,000 |
From the above information, calculate Tentacle's total fixed costs.
A. $43,200
B. $66,200
C.$61,200
D. $301,200
Titanic Roofing Company has estimated the following amounts for its next fiscal year:
|
Total fixed costs |
$900,000 |
|
Sale price per unit |
40 |
|
Variable cost per unit |
25 |
If the company spends an additional $35,000 on advertising, sales volume would increase by
3,000 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic?
A. Operating income will increase by $45,000.
B. Operating income will increase by$10,000.
C. Operating income will increase by $120,000.
D. Operating income will decrease by $10,000.
The management of Guardian Fire Alarms has calculated the following variances:
|
Direct materials cost variance |
$8,000 U |
|
Direct materials efficiency variance |
35,000 F |
|
Direct labor cost variance |
16,000 F |
|
Direct labor efficiency variance |
12,500 U |
|
Total variable overhead variance |
8,000 F |
|
Total fixed overhead variance |
4,500 F |
What is the total direct materials variance of the company?
A.$8,000 F
B. $3,500 F
C.$12,500 F
D. $27,000 F
| 1 | D.$26 | ||
| Sales Price | $42 | ||
| Less: Variable Cost | $16 | ||
| Contribution margin | $26 | ||
| 2 | B. $66,200 | ||
| Equipment depreciation | $23,000 | ||
| Factory insurance | $11,000 | ||
| Factory manager's salary | $11,200 | ||
| Janitor's salary | $5,000 | ||
| Property taxes | $16,000 | ||
| Total fixed costs | $66,200 | ||
| 3 | B. Operating income will increase by$10,000 | ||
| Units | 3,000 | ||
| Sales Price | $40 | ||
| Less: Variable Cost | $25 | ||
| Contribution margin | $15 | $45,000 | |
| Less: Fixed Cost | $35,000 | ||
| Operating income | $10,000 | ||
| 4 | D. $27,000 F | ||
| The total direct materials variance | $27,000 | ||
| ($8,000 U + $35,000 F) | |||
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