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13. A. A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,700 units): Direct materials $172,500

13. A.

  1. A business operated at 100% of capacity during its first month and incurred the following costs:

    Production costs (20,700 units):
    Direct materials $172,500
    Direct labor 232,400
    Variable factory overhead 259,600
    Fixed factory overhead 97,500 $762,000
    Operating expenses:
    Variable operating expenses $134,200
    Fixed operating expenses 46,900 181,100

    If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

    a. $51,360

    b. $61,735

    c. $58,899

    d. $72,897

13. B.

  1. Strait Co. manufactures office furniture. During the most productive month of the year, 3,800 desks were manufactured at a total cost of $82,800. In the month of lowest production the company made 1,170 desks at a cost of $64,400. Using the high-low method of cost estimation, total fixed costs are

    a. $56,200

    b. $64,400

    c. $18,400

    d. $82,800

13. C.

  1. If a business had sales of $4,248,000 and a margin of safety of 20%, the break-even point was

    a. $7,646,400

    b. $849,600

    c. $5,097,600

    d. $3,398,400

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