1. Carlton Corporation sells a single product at a selling price of $40 per unit. Variable expenses are $22 per unit and fixed expenses are $82,800. Carlton's break-even point is:

a. 3,764

b. 2,070

c. 5,000

d. 4,600

2. Index Corporation uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 17,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $9,010. An additional 76,000 units were started into production during the month and 83,000 units were completed and transferred to the next processing department. There were 10,000 units in the ending work in process inventory of the Forming Department that were 70% complete with respect to conversion costs. A total of $445,915 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

a. $5,050

b. $5,150

c. $5,300

d. $5,867

3. If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements

True of False.

4. If the FIFO cost method is used in a process costing system, costs in the beginning inventory are kept separate from current period costs.

True or False

5. Harker Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 16,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $29,440. An additional 59,000 units were started into production during the month and 61,000 units were completed in the Welding Department and transferred to the next processing department. There were 14,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $246,400 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

a. $4,600

b. $4,176

c. $3,375

d. $4,421

6. Arthur Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $300,000 and the variable expenses are 45% of sales. Given this information, the actual profit is:

a. $15,000

b. $41,250

c. $75,000

d. $55,000