13. Karis Kookies has total costs of $5,000 when 2,000 units are produced and $11,000 when 5,000 units are produced. What is the variable cost per unit?

1. $2.50
2. $2.20
3. $2.00
4. $0.50

14. Which of the following items appears on a contribution margin income statement but not on a GAAP income statement?

A. Sales

B. Gross margin

C. Net income

D. Contribution margin

15. Well Water Inc. wants to produce and sell a new flavored water. In order to penetrate the market, the product will have to sell at $2.00 per 12 oz. bottle. The following data has been collected:

Annual sales 50,000 bottles

Projected selling and administrative costs $8,000

Desired profit $70,000

The target cost per bottle is

a. $0.44.

b. $0.60.

c. $0.16.

d. $0.40.

16. The formal documents that quantify a companys plans for achieving its goals are called

A. variance reports.

B. budgets.

C. exception logs.

D. cost of production reports.

17. Which of the following costs does not change when the level of business activity changes? A. total fixed costs B. total variable costs C. total direct materials costs D. fixed costs per unit

18. When work is completed on a job, costs for the completed job are found in which of the following accounts?

1. Raw Materials Inventory
2. Work in Process Inventory
3. Finished Goods Inventory
4. Cost of Goods Sold

19. In a process costing system, when raw materials are put into process, the cost of the items is moved from A. Work in Process to Finished Goods.

2. Finished Goods to Cost of Goods Sold.
3. Raw Materials to Work in Process.
4. Finished Goods to Work in Process

20. Conversion costs are A. often assumed to be added at the beginning of the production process in each department. B. the sum of the direct materials and direct labor costs. C. impossible to measure for any particular department. D. often assumed to be added evenly throughout the process within the department.