Multiple Choice Part 1

Question 1

37) A $2.00 increase in a product’s variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:
A) decrease the degree of operating leverage.
B) decrease the contribution margin.
C) have no effect on the break-even volume.
D) have no effect on the contribution margin ratio.

Answer 1

C) have no effect on the break-even volume.

Question 2

38) To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?
A) (Fixed expenses + Target net profit)/Total contribution margin
B) (Fixed expenses + Target net profit)/Contribution margin ratio
C) Fixed expenses/Contribution margin per unit
D) Target net profit/Contribution margin ratio

Answer 2

B) (Fixed expenses + Target net profit)/Contribution margin ratio

Question 3

39) Which of the following is an assumption underlying standard CVP analysis?
A) In multiproduct companies, the sales mix is constant.
B) In manufacturing companies, inventories always change.
C) The price of a product or service is expected to change as volume changes.
D) Fixed expenses will change as volume increases.

Answer 3

A) In multiproduct companies, the sales mix is constant.

Question 4

40) Kelchner Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.

Sales (3,000 units) $ 180,000
Variable expenses 108,000
Contribution margin 72,000
Fixed expenses 62,400
Net operating income $ 9,600

The contribution margin ratio is closest to:

A) 67%
B) 40%
C) 33%
D) 60%

Answer 4

B) 40%

Question 5

41) The following information pertains to Nova Company’s cost-volume-profit relationships:

Breakeven point in units sold 1,000
Variable expenses per unit $ 500
Total fixed expenses $ 150,000

How much will be contributed to net operating income by the 1,001st unit sold?
A) $650
B) $500
C) $150
D) $0

Answer 5

C) $150

Question 6

42) Mishoe Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.

Sales (1,000 units) $ 50,000
Variable expenses 32,500
Contribution margin 17,500
Fixed expenses 12,250
Net operating income $ 5,250

The break-even point in unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 0 units
B) 895 units
C) 700 units
D) 650 units

Answer 6

C) 700 units

Question 7

43) Stockmaster Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.

Sales (8,000 units) $ 320,000
Variable expenses 192,000
Contribution margin 128,000
Fixed expenses 121,600
Net operating income $ 6,400

The margin of safety in dollars is closest to:
A) $6,400
B) $16,000
C) $121,600
D) $128,000

Answer 7

B) $16,000

Question 8

44) Jilk Incorporated’s contribution margin ratio is 62% and its fixed monthly expenses are $43,500. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company’s net operating income in a month when sales are $129,000?
A) $79,980
B) $5,520
C) $36,480
D) $85,500

Answer 8

C) $36,480

Question 9

45) Creswell Corporation’s fixed monthly expenses are $21,500 and its contribution margin ratio is 60%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company’s net operating income in a month when sales are $75,000?
A) $8,500
B) $45,000
C) $23,500
D) $53,500

Answer 9

C) $23,500

Question 10

46) Moyas Corporation sells a single product for $25 per unit. Last year, the company’s sales revenue was $235,000 and its net operating income was $63,000. If fixed expenses totaled $78,000 for the year, the break-even point in unit sales was:
A) 9,400 units
B) 3,760 units
C) 11,920 units
D) 5,200 units

Answer 10

D) 5,200 units

Question 11

47) Last year Easton Corporation reported sales of $480,000, a contribution margin ratio of 25% and a net loss of $16,000. Based on this information, the break-even point was:
A) $435,000
B) $544,000
C) $506,000
D) $600,000

Answer 11

B) $544,000

Question 12

48) Awtis Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $376,800 and the variable expenses are 45% of sales. Given this information, the actual profit is:
A) $100,480
B) $69,080
C) $18,840
D) $51,810

Answer 12

B) $69,080

Question 13

49) Awtis Corporation has a margin of safety percentage of 20% based on its actual sales. The break-even point is $500,000 and the variable expenses are 60% of sales. Given this information, the actual profit is:
A) $65,000
B) $55,000
C) $50,000
D) $41,500

Answer 13

C) $50,000

Question 14

50) Tropp Corporation sells a product for $10 per unit. The fixed expenses are $420,000 per month and the unit variable expenses are 60% of the selling price. What sales would be necessary in order for Tropp to realize a profit of 10% of sales? (Round your intermediate calculations to 2 decimal places.)
A) $1,050,000
B) $945,000
C) $1,400,000
D) $840,000

Answer 14

C) $1,400,000

Question 15

51) Kuzio Corporation produces and sells a single product. Data concerning that product appear below:

Per Unit	Percent of Sales Selling price	$ 150	100% Variable expenses	75	50% Contribution margin	$ 75	50%

The company is currently selling 5,600 units per month. Fixed expenses are $206,000 per month. The marketing manager believes that a $7,500 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company’s monthly net operating income of this change?
A) increase of $5,250
B) increase of $12,750
C) decrease of $7,500
D) decrease of $5,250

Answer 15

A) increase of $5,250

Question 16

52) Data concerning Follick Corporation’s single product appear below:

Selling price per unit $ 170.00
Variable expense per unit $ 66.30
Fixed expense per month $ 127,490

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $209,000
B) $290,510
C) $127,490
D) $418,000

Answer 16

A) $209,000

Question 17

53) Wimpy Incorporated produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit. The fixed expense is $366,915 per month.

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $601,500
B) $366,915
C) $636,408
D) $940,808

Answer 17

A) $601,500

Question 18

54) Bear Publishing sells a nature guide. The following information was reported for a typical month:

Total	Per Unit Sales	$ 17,600	$ 16.00 Variable expenses	9,680	 Contribution margin	7,920	 Fixed expenses	3,600	 Net operating income	$ 4,320	

What is Bear’s current break-even point in unit and dollars? (Round your intermediate calculations to 2 decimal places.)
A) 1,100 units and $17,600
B) 1,100 units and $8,000
C) 8,000 units and $500
D) 500 units and $8,000

Answer 18

D) 500 units and $8,000

Question 19

55) Derst Incorporated sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
A) $539,000
B) $1,911,000
C) $2,450,000
D) $1,372,000

Answer 19

A) $539,000

Question 20

56) Derst Incorporated sells a particular textbook for $140. Variable expenses are $25 per book. At the current volume of 6,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
A) $400,000
B) $690,000
C) $840,000
D) $150,000

Answer 20

B) $690,000

Question 21

57) Mio Canoe Livery rents canoes and transports canoes and customers to and from their canoe trip on a local river. The trip is priced at $20 per person and has a CM ratio of 30%. Mio’s fixed expenses are $84,000. Last year, sales were $400,000 and profit was $36,000. How many units need to be sold to break-even, and how many need to be sold to earn a profit of $42,000?
A) 1,800 and 2,100
B) 6,000 and 8,143
C) 14,000 and 21,000
D) 4,200 and 6,300

Answer 21

C) 14,000 and 21,000

Question 22

58) Corporation X sold 25,000 units of product last year. The contribution margin per unit was $2, and fixed expenses totaled $40,000 for the year. This year fixed expenses are expected to increase to $45,000, but the contribution margin per unit will remain unchanged at $2. How many units must be sold this year to earn the same net operating income as was earned last year?
A) 22,500
B) 27,500
C) 35,000
D) 2,500

Answer 22

B) 27,500

Question 23

59) The contribution margin ratio of Mountain Corporation’s only product is 52%. The company’s monthly fixed expense is $296,400 and the company’s monthly target profit is $7,000. The dollar sales to attain that target profit is closest to:
A) $570,000
B) $157,768
C) $583,462
D) $154,128

Answer 23

C) $583,462

Question 24

60) Hettrick International Corporation’s only product sells for $120.00 per unit and its variable expense is $52.80. The company’s monthly fixed expense is $396,480 per month. The unit sales to attain the company’s monthly target profit of $13,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

A) 7,755
B) 6,093
C) 5,753
D) 3,412

Answer 24

B) 6,093

Question 25

61) Product Y sells for $15 per unit, and has variable expenses of $9 per unit. Fixed expenses total $300,000 per year. How many units of Product Y must be sold each year to yield an annual profit of $90,000?
A) 50,000 units
B) 65,000 units
C) 15,000 units
D) 43,333 units

Answer 25

B) 65,000 units

Question 26

62) Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%. The company’s monthly fixed expense is $720,720 and the company’s monthly target profit is $28,000. The dollar sales to attain that target profit is closest to:
A) $471,694
B) $454,054
C) $1,188,444
D) $1,144,000

Answer 26

C) $1,188,444

Question 27

63) Mcmurtry Corporation sells a product for $210 per unit. The product’s current sales are 13,200 units and its break-even sales are 10,956 units. The margin of safety as a percentage of sales is closest to:
A) 17%
B) 20%
C) 83%
D) 80%

Answer 27

A) 17%

Question 28

64) Mcmurtry Corporation sells a product for $170 per unit. The product’s current sales are 10,000 units and its break-even sales are 8,100 units. The margin of safety as a percentage of sales is closest to:
A) 23%
B) 81%
C) 19%
D) 77%

Answer 28

C) 19%

Question 29

65) Cubie Corporation has provided the following data concerning its only product:

Selling price $ 90 per unit
Current sales 11,600 units
Break-even sales 10,324 units

What is the margin of safety in dollars?
A) $1,044,000
B) $114,840
C) $929,160
D) $826,952

Answer 29

B) $114,840

Question 30

66) Majid Corporation sells a product for $150 per unit. The product’s current sales are 41,400 units and its break-even sales are 32,880 units.

What is the margin of safety in dollars?
A) $3,917,009
B) $6,210,000
C) $4,932,000
D) $1,278,000

Answer 30

D) $1,278,000

Question 31

67) Majid Corporation sells a product for $240 per unit. The product’s current sales are 41,300 units and its break-even sales are 36,757 units.

What is the margin of safety in dollars?
A) $8,821,680
B) $6,608,000
C) $9,912,000
D) $1,090,320

Answer 31

D) $1,090,320

Question 32

68) Sales at East Corporation declined from $100,000 to $80,000, while net operating income declined by 300%. Given these data, the company must have had an operating leverage of:
A) 15
B) 2.7
C) 30
D) 12

Answer 32

A) 15

Question 33

69) Alpha Corporation reported the following data for its most recent year: sales, $510,000; variable expenses, $360,000; and fixed expenses, $100,000. The company’s degree of operating leverage is closest to:
A) 10.00
B) 4.00
C) 3.00
D) 3.40

Answer 33

C) 3.00

Question 34

70) Serfass Corporation’s contribution format income statement for July appears below:

Sales $ 260,000
Variable expenses 176,000
Contribution margin 84,000
Fixed expenses 71,800
Net operating income $ 12,200

The degree of operating leverage is closest to:
A) 0.05
B) 0.15
C) 21.31
D) 6.89

Answer 34

D) 6.89

Question 35

71) Roddam Corporation produces and sells two products. Data concerning those products for the most recent month appear below:

Product K09E	Product G17B Sales	$ 28,000	$ 38,000 Variable expenses	$ 11,200	$ 8,600

The fixed expenses of the entire company were $41,970. If the sales mix were to shift toward Product K09E with total dollar sales remaining constant, the overall break-even point for the entire company:
A) would increase.
B) could increase or decrease.
C) would not change.
D) would decrease.

Answer 35

A) would increase.

Question 36

72) Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $30,000 and variable expenses of $10,680. Product X96N had sales of $43,000 and variable expenses of $18,520. The fixed expenses of the entire company were $46,050. The break-even point for the entire company is closest to:
A) $43,800
B) $75,250
C) $76,750
D) $46,050

Answer 36

C) $76,750

Question 37

73) Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product.

Sales (9,600 units) $ 336,000
Variable expenses 144,000
Contribution margin 192,000
Fixed expenses 137,000
Net operating income $ 55,000

If the company sells 9,700 units, its net operating income should be closest to:
A) $57,000
B) $55,000
C) $55,573
D) $58,500

Answer 37

A) $57,000

Question 38

74) Souza Incorporated, which produces and sells a single product, has provided its contribution format income statement for October.

Sales (4,000 units) $ 88,000
Variable expenses 40,000
Contribution margin 48,000
Fixed expenses 41,700
Net operating income $ 6,300

If the company sells 3,500 units, its net operating income should be closest to:
A) $5,513
B) $6,300
C) $300
D) -$4,700

Answer 38

C) $300

Question 39

75) A cement manufacturer has supplied the following data:

Tons of cement produced and sold 680,000
Sales revenue $ 2,788,000
Variable manufacturing expense $ 1,156,000
Fixed manufacturing expense $ 760,000
Variable selling and administrative expense $ 272,000
Fixed selling and administrative expense $ 294,000
Net operating income $ 306,000

What is the company’s unit contribution margin? (Round your intermediate calculations to 2 decimal places.)
A) $0.45 per unit
B) $2.10 per unit
C) $2.00 per unit
D) $4.10 per unit

Answer 39

C) $2.00 per unit

Question 40

76) A cement manufacturer has supplied the following data:

Tons of cement produced and sold 680,000
Sales revenue $ 2,788,000
Variable manufacturing expense $ 1,156,000
Fixed manufacturing expense $ 760,000
Variable selling and administrative expense $ 272,000
Fixed selling and administrative expense $ 294,000
Net operating income $ 306,000

The company’s contribution margin ratio is closest to:
A) 39.0%
B) 51.2%
C) 11.0%
D) 48.8%

Answer 40

D) 48.8%

Question 41

77) Speckman Enterprises, Incorporated, produces and sells a single product whose selling price is $200.00 per unit and whose variable expense is $68.00 per unit. The company’s monthly fixed expense is $514,800.

Assume the company’s target profit is $11,000. The unit sales to attain that target profit is closest to:
A) 2,629 units
B) 3,983 units
C) 4,781 units
D) 7,732 units

Answer 41

B) 3,983 units

Question 42

78) Jerrel Corporation sells a product for $230 per unit. The product’s current sales are 24,000 units and its break-even sales are 17,280 units.

What is the margin of safety in dollars?
A) $5,520,000
B) $1,545,600
C) $3,974,400
D) $3,680,000

Answer 42

B) $1,545,600

Question 43

79) Highjinks, Incorporated, has provided the following budgeted data:

Sales 20,000 units
Selling price $ 100 per unit
Variable expense $ 70 per unit
Fixed expense $ 450,000

How many units would the company have to sell in order to have a net operating income equal to 5% of total sales dollars?
A) 18,000 units
B) 20,000 units
C) 15,333 units
D) 14,286 units

Answer 43

A) 18,000 units

Question 44

80) Data concerning Strite Corporation’s single product appear below:

Selling price per unit $ 150.00
Variable expense per unit $ 42.00
Fixed expense per month $ 421,200

Assume the company’s target profit is $8,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $429,200
B) $596,111
C) $1,532,857
D) $852,723

Answer 44

B) $596,111

Question 45

81) Which of the following statements is true when referring to the high-low method of cost analysis?
A) The high-low method has no major weaknesses.
B) The high-low method is very hard to apply.
C) In essence, the high-low method draws a straight line through two data points.
D) The high-low method uses all of the available data to estimate fixed and variable costs.

Answer 45

C) In essence, the high-low method draws a straight line through two data points.

Question 46

82) In describing the cost formula equation, Y = a + bX, which of the following is correct:
A) “Y” is the independent variable.
B) “a” is the variable cost per unit.
C) “a” and “b” are valid for all levels of activity.
D) in the high-low method, “b” equals the change in cost divided by the change in activity.

Answer 46

D) in the high-low method, “b” equals the change in cost divided by the change in activity.

Question 47

83) Larker Brothers, Incorporated, used the high-low method to derive its cost formula for electrical power cost. According to the cost formula, the variable cost per unit of activity is $4 per machine-hour. Total electrical power cost at the high level of activity was $19,200 and at the low level of activity was $18,400. If the high level of activity was 3,300 machine hours, then the low level of activity was:
A) 3,100 machine hours
B) 3,200 machine hours
C) 3,000 machine hours
D) 2,900 machine hours

Answer 47

A) 3,100 machine hours

Question 48

84) Gamach Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $104.50 per unit.

Sales volume (units) 5,000 6,000
Cost of sales $ 295,000 $ 354,000
Selling and administrative costs $ 186,000 $ 202,800

The best estimate of the total monthly fixed cost is:
A) $102,000
B) $518,900
C) $556,800
D) $481,000

Answer 48

A) $102,000

Question 49

85) Hara Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $159.80 per unit.

Sales volume (units) 6,000 7,000
Cost of sales $ 363,600 $ 424,200
Selling and administrative costs $ 531,000 $ 547,400

The best estimate of the total variable cost per unit is: (Round your intermediate calculations to 2 decimal places.)
A) $77.00
B) $60.60
C) $149.10
D) $138.80

Answer 49

A) $77.00

Question 50

86) Maintenance costs at a Straiton Corporation factory are listed below:

 Machine-Hours	 Maintenance Cost March	3,627	$ 54,384 April	3,588	$ 53,980 May	3,637	$ 54,453 June	3,638	$ 54,491 July	3,572	$ 53,843 August	3,611	$ 54,196 September	3,644	$ 54,550 October	3,609	$ 54,181 November	3,669	$ 54,767

Management believes that maintenance cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first and round off to the nearest whole cent. Compute the fixed component second and round off to the nearest whole dollar. These estimates would be closest to: (Round your intermediate calculations to 2 decimal places.)
A) $0.10 per machine-hour; $54,382 per month
B) $15.00 per machine-hour; $54,316 per month
C) $9.12 per machine-hour; $21,309 per month
D) $9.53 per machine-hour; $19,801 per month

Answer 50

D) $9.53 per machine-hour; $19,801 per month

Question 51

87) Iacob Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $162.00 per unit.

Sales volume (units) 11,300 12,670
Cost of sales $ 870,100 $ 975,590
Selling and administrative costs $ 720,000 $ 756,990

The best estimate of the total contribution margin when 11,610 units are sold is:
A) $787,410
B) $673,380
C) $296,670
D) $392,420

Answer 51

B) $673,380

Question 52

88) Iacob Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $103.40 per unit.

Sales volume (units) 5,000 6,000
Cost of sales $ 315,500 $ 378,600
Selling and administrative costs $ 162,500 $ 177,600

The best estimate of the total contribution margin when 5,300 units are sold is: (Round your intermediate calculations to 2 decimal places.)
A) $56,710
B) $133,560
C) $41,340
D) $213,590

Answer 52

B) $133,560

Question 53

89) Edal Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.

Production volume 5,000 units 6,000 units
Direct materials $ 266,500 $ 319,800
Direct labor $ 52,000 $ 62,400
Manufacturing overhead $ 748,500 $ 769,200

The best estimate of the total variable manufacturing cost per unit is: (Round your intermediate calculations to 2 decimal places.)
A) $63.70
B) $84.40
C) $53.30
D) $20.70

Answer 53

B) $84.40

Question 54

90) Bakan 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 6,100 units 7,100 units
Direct materials $ 97.70 per unit $ 97.70 per unit
Direct labor $ 24.60 per unit $ 24.60 per unit
Manufacturing overhead $ 78.90 per unit $ 72.90 per unit

The best estimate of the total variable manufacturing cost per unit is: (Round your intermediate calculations to 2 decimal places.)
A) $170.60
B) $158.60
C) $182.30
D) $122.30

Answer 54

B) $158.60

Question 55

91) Supply costs at Coulthard Corporation’s chain of gyms are listed below:

Client-Visits	Supply Cost March	11,672	$ 28,348 April	11,468	$ 28,305 May	12,000	$ 28,417 June	14,500	$ 28,942 July	11,732	$ 28,361 August	11,218	$ 28,253 September	12,012	$ 28,420 October	11,703	$ 28,355 November	11,851	$ 28,386

Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates are closest to: (Round your intermediate calculations to 2 decimal places.)
A) $1.90 per client-visit; $28,362 per month
B) $.79 per client-visit; $18,839 per month
C) $0.25 per client-visit; $25,392 per month
D) $0.21 per client-visit; $25,897 per month

Answer 55

D) $0.21 per client-visit; $25,897 per month

Question 56

92) Electrical costs at one of Finfrock Corporation’s factories are listed below:

Machine-Hours	Electrical Cost March	3,642	$ 40,537 April	3,616	$ 40,319 May	3,667	$ 40,706 June	3,634	$ 40,462 July	3,665	$ 40,703 August	3,659	$ 40,680 September	3,644	$ 40,547 October	3,612	$ 40,268 November	3,624	$ 40,364

Management believes that electrical cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates are closest to: (Round your intermediate calculations to 2 decimal places.)

A) $7.96 per machine-hour; $11,517 per month
B) $11.13 per machine-hour; $40,510 per month
C) $9.61 per machine-hour; $5,533 per month
D) $0.13 per machine-hour; $40,246 per month

Answer 56

A) $7.96 per machine-hour; $11,517 per month

Question 57

93) Deidoro Company has provided the following data for maintenance cost:

Prior Year	Current Year Machine hours	19,100	21,300 Maintenance cost	$ 30,800	$ 33,880

Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to: (Round your intermediate calculations to 2 decimal places.)
A) $30,800 per year; $1.591 per machine hour
B) $4,060 per year; $1.591 per machine hour
C) $4,060 per year; $1.400 per machine hour
D) $30,800 per year; $1.400 per machine hour

Answer 57

C) $4,060 per year; $1.400 per machine hour

Question 58

94) Caraco 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 7,000 units 8,000 units
Direct materials $ 87.40 per unit $ 87.40 per unit
Direct labor $ 20.20 per unit $ 20.20 per unit
Manufacturing overhead $ 101.50 per unit $ 90.80 per unit

The best estimate of the total cost to manufacture 7,300 units is closest to: (Round your intermediate calculations to 2 decimal places.)

A) $1,487,375
B) $1,448,320
C) $1,500,750
D) $1,526,430

Answer 58

C) $1,500,750

Question 59

95) A soft drink bottler incurred the following factory utility cost: $9,246 for 5,200 cases bottled and $8,997 for 4,900 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:
A) $1.81
B) $1.78
C) $1.84
D) $0.83

Answer 59

D) $0.83

Question 60

96) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000 unit level of activity. Assume that the relevant range includes all of the activity levels mentioned in this problem.

What would be the competitor’s prediction of variable cost per unit for Matthew Corporation?
A) $1.30
B) $0.77
C) $1.50
D) $1.45

Answer 60

A) $1.30

Question 61

97) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000 unit level of activity. Assume that the relevant range includes all of the activity levels mentioned in this problem.

What would be the competitor’s prediction of total fixed cost per period? (Round your intermediate calculations to 2 decimal places.)
A) $22,500
B) $28,000
C) $13,600
D) $3,000

Answer 61

D) $3,000

Question 62

98) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000 unit level of activity. Assume that the relevant range includes all of the activity levels mentioned in this problem.

What would be the competitor’s prediction of total expected costs at 18,000 units? (Round your intermediate calculations to 2 decimal places.)
A) $16,860
B) $26,400
C) $29,100
D) $30,000

Answer 62

B) $26,400

Question 63

99) The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:

Production volume 2,000 units 4,000 units
Direct materials $ 88.40 per unit $ 88.40 per unit
Direct labor $ 20.60 per unit $ 20.60 per unit
Manufacturing overhead $ 86.90 per unit $ 55.30 per unit

The best estimate of the total monthly fixed manufacturing cost is: (Round your intermediate calculations to 2 decimal places.)
A) $221,200
B) $391,800
C) $173,800
D) $126,400

Answer 63

D) $126,400

Question 64

100) The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:

Production volume 2,000 units 4,000 units
Direct materials $ 88.40 per unit $ 88.40 per unit
Direct labor $ 20.60 per unit $ 20.60 per unit
Manufacturing overhead $ 86.90 per unit $ 55.30 per unit

The best estimate of the total variable manufacturing cost per unit is: (Round your intermediate calculations to 2 decimal places.)
A) $132.70
B) $88.40
C) $23.70
D) $109.00

Answer 64

A) $132.70

Question 65

101) The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:

Production volume 2,000 units 4,000 units
Direct materials $ 88.40 per unit $ 88.40 per unit
Direct labor $ 20.60 per unit $ 20.60 per unit
Manufacturing overhead $ 86.90 per unit $ 55.30 per unit

The best estimate of the total cost to manufacture 2,200 units is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $396,220
B) $430,980
C) $361,460
D) $418,340

Answer 65

D) $418,340