2. In interpreting the degree of operating leverage, and Operating leverage of 5 means that if ales increase by 5% there will be a pretax % increase in the firms 13. Mentor Corp. has provided the following information for the current year: Units produced Sale price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative 3,200 units $250 per unit $75 per unit $50 per unit $20 per unit $320,000 per year $25 per unit $175,000 per year costs Fixed selling and administrative costs Calculate the unit product cost using absorption costing. 14. Using the Mentor Corp. information above, calculate the unit product cost using variable costing. for 15. A benefit derived from budgeting is that it provides a evaluating A compuny bus w doments, Y and Z that incur wage expenses. An analysis of the total wage expense of S18.000 indicanes that Dapt Y had a direct wage expense of $2.000 and Dept. Z had a direct wage expense of $3.580. The romaining expensos ane indirect and analysis indicates they should be alliecatiod evenly between the two degurtments Departmental wage expenses for 21. Caner Compuny neporied the folliowing inancial mumbers for one of its divisions for the year, avenage total assets of $4.,000,000 sales of $4.500,000 cost of goods sold of $2.500,000 and operacing expenses of $1.375.000 Compule the division's return on assets 22 A sym of parionmance measures, including nonfinancial measures, used to assess compuny and division munager perfiormance is 23. The potential benelts lost by taking a specific action when two or more alternative choices are available is kcomn as anh 24. Chang Industries has 1,500 defective units of product that have already cost $16 each to prodace. A sahvage cormpany will purchase the defactive units as they are for $4 each. Chang's prodacticn manager reports that the defects can be corrected for $5 per unit, enabling them to be soild at their regilar market price of $21. The incremental income or loss on reworking the units Income or Loss 25. What are three methods of evaluating a capital investment project using cash flows as a 2. In interpreting the degree of operating leverage, and Operating leverage of 5 means that if ales increase by 5% there will be a pretax % increase in the firms 13. Mentor Corp. has provided the following information for the current year: Units produced Sale price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative 3,200 units $250 per unit $75 per unit $50 per unit $20 per unit $320,000 per year $25 per unit $175,000 per year costs Fixed selling and administrative costs Calculate the unit product cost using absorption costing. 14. Using the Mentor Corp. information above, calculate the unit product cost using variable costing. for 15. A benefit derived from budgeting is that it provides a evaluating A company uses activity-based costing to determine the costs of its three products: A, B, and C budgeted cost and activity for cach of the company's three activity cost pools are shown in the The following table: Budgeted Activir Activity Cost Pool Budgcted Cost Product A Product B Product C 20,000-76 6,000 7,000 2,500 8,000 560,000 535,000 S72,000 000 80001 2,000 11.7 What are the activity rates for the three activities under activity based costing? 01.76 2)12 3111-7 9. A company uses activity-based costing to determine the costs of its three products: A, B and C. The budgcted cost and activity for each of the company's three activity cost pools are shown in the following table Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C $60,000 35,000 6,000 7,000 4,000 2.000 20,000 8.000 1,625 Activity 3 How much overhead will be assigned to Product B using activity-based costing? 10. A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a: 11. A company's product sells at $10 per unit and has a $4 per unit variable cost. The company's total fixed costs are $96,000. The break-even point in units is: units Page 2 of 5