Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Tasty Treats is a snow cone stand near the local park. To plan for the future, Tasty Treats wants to determine its cost behavior

1. Tasty Treats is a snow cone stand near the local park. To plan for the future, Tasty Treats wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served.

Month

Number of snow cones

Total operating costs

January

6,400

$5,980

February

7,000

$6,400

March

6,200

$5,840

April

6,900

$6,330

May

7,600

$6,820

June

7,250

$6,575

The variable cost per snow cone using the highlow method is

A.$0.90.

B.$0.70.

C.$0.94.

D.$1.43.

2. Mario Company has total fixed costs of $600,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The fixed cost per unit at a production level of 300,000 units is

A.$2.00.

B.$3.50.

C.$1.75.

D.$2.04.

3. What are scatter plots useful for?

A.Determining the overall strength of the relationship between historical cost and volume

B.Identifying potential outliers

C.Both of the above

D.Neither of the above

4. The managerial accountant at Pembroke Manufacturing reported the following data:

Units:

Beginning WIP

54,500

75% for materials

45% for conversion

Transferredin

225,000

Completed

232,000

Ending WIP

60% for materials

20% for conversion

47,500

Costs:

Beginning WIP

Direct materials

$67,500

Conversion

145,400

Transferredin

99,000

Transferredin from department 1

$1,550,050

Direct materials added

909,375

Conversion added

542,875

Costs of units transferred to Finished Goods Inventory would be closest to

A.$3,314,200.

B.$1,531,200.

C.$3,002,300.

D.$2,900,000.

5. When predicting costs at other volumes using a cost equation derived from either the highlow method or regression analysis, managers should consider?

A.general inflation.

B.seasonality.

C.outliers.

D.all of the above.

6. At Sunrise Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:

WIP beginning (50% for conversion)

19,200 units

Units started

120,500 units

Units completed and transferred out

116,700 units

WIP ending (60% for conversion)

23,000 units

Beginning WIP direct materials

$35,000

Beginning WIP conversion costs

$22,500

Costs of materials added

$384,100

Costs of conversion added

$271,125

What is the cost per equivalent unit for conversion costs?

A.$2.25

B.$2.08

C.$2.10

D.$2.32

7. A shampoo manufacturer offers the following information:

WIP Inventory, January 1

0 units

Units started

25,600 units

Units completed and transferred out

19,200 units

WIP Inventory, December 31

6,400 units

Direct materials

$276,480

Direct labor

$585,000

Manufacturing Overhead

$328,920

The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs.

On December 31, the cost per equivalent unit for materials would be closest to

A.$14.28.

B.$9.39.

C.$12.00.

D.$12.71

8. Fun Stuff Manufacturing produces frisbees using a threestep

sequential process that includes molding, coloring and finishing. When the frisbees and associated costs are transferred from the molding process to the coloring process, which account is debited?

A.Raw Materials Inventory

B.WIP InventoryminusMolding

C.WIP InventoryminusColoring

D.WIP Inventorylong dashFinishing

9. Which of the following is a measure of the amount of work done, expressed in complete units of output?

A.Job costing

B.Process costing

C.Equivalent units

D.Conversion costs

10. It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $12,000 a month rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions. Homer sold67,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his operating income?

A.$118,875

B.$292,875

C.$64,125

D.$270,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Principles And Practice Of Auditing

Authors: George Puttick, Sandra Van Esch

7th Edition

0702137723, 978-0702137723

More Books

Students also viewed these Accounting questions