Question 1

In a traditional format income statement for a merchandising company, the selling and administrative expenses report all period costs that have been expensed as incurred.

Accepted Answer

A) True 
 B)False

Question 2

Data for Cost A and Cost B appear below:  Which of the above best describes the behavior of Costs A and B?

Accepted Answer

A)  Cost A is fixed, Cost B is variable.
B)  Cost A is variable, Cost B is fixed.
C)  Both Cost A and Cost B are variable.
D)  Both Cost A and Cost B are fixed.E) None of the above
F) C) and D)

Question 3

The contribution margin for December is:

Accepted Answer

A)  $1,369,400
B)  $2,421,500
C)  $1,193,100
D)  $929,100E) C) and D)
F) A) and C)

Question 4

Prime cost was:

Accepted Answer

A)  $150,000
B)  $190,000
C)  $350,000
D)  $415,000E) All of the above
F) A) and C)

Question 5

The contribution margin for October is:

Accepted Answer

A)  $260,000
B)  $232,000
C)  $196,500
D)  $369,500E) A) and B)
F) A) and C)

Question 6

Selling costs can be either direct or indirect costs.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  $38,000
B)  $29,000
C)  $70,000
D)  $34,000E) All of the above
F) A) and B)

Question 8

The best estimate of the total cost to manufacture 1,200 units is closest to:

Accepted Answer

A)  $68,520
B)  $100,920
C)  $111,720
D)  $90,120E) B) and D)
F) B) and C)

Question 9

Indirect labor is a(n) :

Accepted Answer

A)  Prime cost.
B)  Conversion cost.
C)  Period cost.
D)  Opportunity cost.E) C) and D)
F) All of the above

Question 10

Cardiv Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.  The best estimate of the total cost to manufacture 4,300 units is closest to:

Accepted Answer

A)  $877,200
B)  $909,400
C)  $901,925
D)  $926,650E) A) and B)
F) None of the above

Question 11

Which of the following classifications best describes the behavior of clerical expense?

Accepted Answer

A)  Mixed
B)  Variable
C)  Fixed
D)  none of theseE) None of the above
F) B) and D)

Question 12

If the level of activity increases within the relevant range:

Accepted Answer

A)  variable cost per unit and total fixed costs also increase.
B)  fixed cost per unit and total variable cost also increase.
C)  total cost will increase and fixed cost per unit will decrease.
D)  variable cost per unit and total cost also increase.E) A) and D)
F) None of the above

Question 13

Direct labor is a part of prime cost, but not conversion cost.

Accepted Answer

A) True 
 B)False

Question 14

Cosgrove, Inc., is a wholesaler that distributes a single product. The company's revenues and expenses for the last three months are given below:  Required:
a. Determine which expenses are mixed and, by use of the high-low method, separate each mixed expense into variable and fixed elements. (Use unit sales as the activity measure.) State the cost formula for each mixed expense.
b. Compute the company's contribution margin for May.

Accepted Answer

a. The Cost of Goods Sold is always $56 ...

Question 15

The cost of goods sold for March was:

Accepted Answer

A)  $146,000
B)  $150,000
C)  $142,000
D)  $237,000E) A) and B)
F) A) and C)

Question 16

Contribution margin means:

Accepted Answer

A)  what remains from total sales after deducting fixed expenses.
B)  what remains from total sales after deducting cost of goods sold.
C)  the sum of cost of goods sold and variable expenses.
D)  what remains from total sales after deducting all variable expenses.E) A) and D)
F) C) and D)

Question 17

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

Accepted Answer

A)  $32.40
B)  $44.80
C)  $66.20
D)  $21.40E) A) and C)
F) C) and D)

Question 18

The contribution format is widely used for preparing external financial statements.

Accepted Answer

A) True 
 B)False

Question 19

The conversion cost for December was:

Accepted Answer

A)  $134,000
B)  $109,000
C)  $192,000
D)  $129,000E) A) and B)
F) B) and C)

Question 20

In making the decision to invest in the model 230 machine, the opportunity cost was:

Accepted Answer

A)  $278,000
B)  $305,000
C)  $207,000
D)  $266,000E) B) and C)
F) A) and C)

Exam 1: Managerial Accounting and Cost Concepts

Direct labor is a part of prime cost, but not conversion cost.

Correct Answer
verified

Indirect labor is a(n) :

Correct Answer
verified

In making the decision to invest in the model 230 machine, the opportunity cost was:

Correct Answer
verified

The conversion cost for December was:

Correct Answer
verified

Prime cost was:

Correct Answer
verified

The contribution margin for December is:

Correct Answer
verified

Contribution margin means:

Correct Answer
verified

The best estimate of the total cost to manufacture 1,200 units is closest to:

Correct Answer
verified

Correct Answer
verified
a. The Cost of Goods Sold is always $56 ...
View Answer

Which of the following classifications best describes the behavior of clerical expense?

Correct Answer
verified

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

Correct Answer
verified

Data for Cost A and Cost B appear below: Which of the above best describes the behavior of Costs A and B?

Correct Answer
verified

In a traditional format income statement for a merchandising company, the selling and administrative expenses report all period costs that have been expensed as incurred.

Correct Answer
verified

The contribution margin for October is:

Correct Answer
verified

If the level of activity increases within the relevant range:

Correct Answer
verified

Selling costs can be either direct or indirect costs.

Correct Answer
verified

Cardiv Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 4,300 units is closest to:

Correct Answer
verified

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

Correct Answer
verified

The contribution format is widely used for preparing external financial statements.

Correct Answer
verified

The cost of goods sold for March was:

Correct Answer
verified

Exam 1: Managerial Accounting and Cost Concepts

Direct labor is a part of prime cost, but not conversion cost.

Correct AnswerverifiedShow Answer

Indirect labor is a(n) :

Correct AnswerverifiedShow Answer

In making the decision to invest in the model 230 machine, the opportunity cost was:

Correct AnswerverifiedShow Answer

The conversion cost for December was:

Correct AnswerverifiedShow Answer

Prime cost was:

Correct AnswerverifiedShow Answer

The contribution margin for December is:

Correct AnswerverifiedShow Answer

Contribution margin means:

Correct AnswerverifiedShow Answer

The best estimate of the total cost to manufacture 1,200 units is closest to:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. The Cost of Goods Sold is always $56 ...View AnswerShow Answer

Which of the following classifications best describes the behavior of clerical expense?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Data for Cost A and Cost B appear below: Which of the above best describes the behavior of Costs A and B?

Correct AnswerverifiedShow Answer

In a traditional format income statement for a merchandising company, the selling and administrative expenses report all period costs that have been expensed as incurred.

Correct AnswerverifiedShow Answer

The contribution margin for October is:

Correct AnswerverifiedShow Answer

If the level of activity increases within the relevant range:

Correct AnswerverifiedShow Answer

Selling costs can be either direct or indirect costs.

Correct AnswerverifiedShow Answer

Cardiv Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 4,300 units is closest to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The contribution format is widely used for preparing external financial statements.

Correct AnswerverifiedShow Answer

The cost of goods sold for March was:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. The Cost of Goods Sold is always $56 ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified