10. Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains.

Which of the following terms could be used to correctly describe the cost of the soap used to wash the denim cloth?

	Direct Cost	Product Cost
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No

A. Option A B. Option B C. Option C D. Option D

9. The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March.

Corporate headquarters building lease

$80,000

Cosmetics Department sales commissions-Northridge Store

$7,000

Corporate legal office salaries

$75,000

Store manager's salary-Northridge Store

$11,000

Heating-Northridge Store

$11,000

Cosmetics Department cost of sales-Northridge Store

$83,000

Central warehouse lease cost

$17,000

Store security-Northridge Store

$11,000

Cosmetics Department manager's salary-Northridge Store

$4,000

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department? A. $83,000 B. $94,000 C. $90,000 D. $127,000

8. In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:

A. $98,000 B. $65,333 C. $18,000 D. $12,000

7. Nieman Inc., a local retailer, has provided the following data for the month of March:

Merchandise inventory, beginning balance	$ 47,700
Merchandise inventory, ending balance	$ 44,200
Sales	$264,500
Purchases of merchandise inventory	$136,900
Selling expense	$ 24,100
Administrative expense	$ 58,700

The net operating income for March was:

A. $128,600B. $127,600C. $41,300D. $44,000

6. Nieman Inc., a local retailer, has provided the following data for the month of March:

Merchandise inventory, beginning balance	$50,800
Merchandise inventory, ending balance	$49,800
Sales	$262,400
Purchases of merchandise inventory	$138,500
Selling expense	$18,500
Administrative expense	$52,200

The cost of goods sold for March was:

$139,500$138,500$137,500$209,200

1. The following costs were incurred in April:

Direct materials	$40,500
Direct labor	$36,700
Manufacturing overhead	$28,800
Selling expenses	$21,400
Administrative expenses	$38,800

Conversion costs during the month totaled:

A. $65,500B. $166,200 C. $69,300D. $77,200

2. The following costs were incurred in April:

Direct materials	$39,300
Direct labor	$23,600
Manufacturing overhead	$22,200
Selling expenses	$14,000
Administrative expenses	$30,800

Prime costs during the month totaled:

A. $85,100B. $45,800C. $62,900D. $129,900

3. Haab Inc. is a merchandising company. Last month the company's cost of goods sold was $61,700. The company's beginning merchandise inventory was $17,700 and its ending merchandise inventory was $23,100. What was the total amount of the company's merchandise purchases for the month?

A. $61,700B. $67,100C. $56,300D. $102,500

4. At a sales volume of 36,000 units, Carne Company's sales commissions (a cost that is variable with respect to sales volume) total $748,800.

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 32,300 units? (Assume that this sales volume is within the relevant range.) (Do not round intermediate calculations.)

A. $683,360B. $671,840C. $834,576D. $748,800

5. Calip Corporation, a merchandising company, reported the following results for October:

Sales	$410,000
Cost of goods sold (all variable)	$173,900
Total variable selling expense	$21,200
Total fixed selling expense	$20,500
Total variable administrative expense	$8,900
Total fixed administrative expense	$31,000

The contribution margin for October is:

A. $358,500B. $206,000C. $236,100D. $154,500