2. Multiple choice questions (25 points) 1 | 2 3 4 5 6 7 8 9 10 2.1. Walton Manufacturing Company gathered the following data for the month. Cost of goods sold: $35,000; Sales: $89,000; selling expenses: $16,000; Administrative expenses: $21,000. How much net operating income will be reported for the period? A. $54,000 B. $17,000 C. $52,000 D. Cannot be determined. 2.2. Two costs at Simpson, Inc. appear below for specific months of operation. Month Amount Units Produced: Delivery costs January $ 40,000 40,000 February 55,000 60,000 Utilities January $ 84,000 40,000 February 126,000 60,000 Which type of costs are these? A. Delivery costs and utilities are both B. Delivery costs and utilities are both mixed. 1/4 Full name: Student ID: variable. C. Utilities are mixed and delivery costs are D. Delivery costs are mixed and utilities are variable. variable. 2.3. Kendra Corporation's total utility costs during the past year were $1,200 during its highest month and $600 during its lowest month. These costs corresponded with 10,000 units of production during the high month and 2,000 units during the low month. What are the fixed and variable components of its utility costs using the high-low method? A. $0.075 variable and $450 fixed B. $0.120 variable and $0 fixed C. $0.300 variable and $0 fixed D. $0.060 variable and $600 fixed 2.4. Gabriel Corporation has fixed costs of $180,000 and variable costs of $8.50 per unit. It has a target income of $268,000. How many units must it sell at $12 per unit to achieve its target net income? A. 1,429 units B. 128,000 units C. 76,571 units D. 21,176 units Costs that change in total but not proportionately with changes in the activity level are: A. Fixed Cost B. Mixed cost C. semifixed cost D. variable cost 2.5. 2.6. Contribution margin is: A. The amount of revenue remaining after B. Available to cover fixed costs and contribute deducting fixed costs to income for the company C. Sales less fixed costs D. Unit selling price less unit fixed costs 2.7. Williams Company expects to sell 500,000 units for $6 per unit. The contribution margin ratio is 30%. If Williams will break even at this level of sales, fixed costs are: A. $150,000 B. $300,000 C.$900,000 D.$2,100,000 2.8. A company has required sales of $1,700,000 to meets its target net income. It has fixed costs of $300,000 and the contribution margin is 30%. The company's target net income is: A. $90,000 B.$210,000 C.$420,000 D.$510,000 2.9. It costs a company $14 of variable costs and $6 of fixed costs to produce product A that sells for $30. A foreign buyer offers to purchase 3,000 units at $18 each. If the special offer is accepted and produced when capacity is fully utilized, net income will: A. Increase $6,000 B. Decrease $36,000 D. Decrease $6,000 D. Decrease $42,000 2.10. If the contribution margin per unit is $15 and it takes 3.0 machine hours to produce the unit, the contribution margin per unit (hour) of limited resource is: A. $25 B.$5 C.$45 D. No correct answer is given 2.11. Variable costs are costs that A. Vary in total directly and proportionately B. Remain the same per unit at every activity with changes in the activity level level C. Neither of the above D. Both A) and B) above 2.12. Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is $200,000. What should be reported as variable expenses in the CVP income statement? A. $700,000 B.$900,000 C.$500,000 D. $1,000,000 2.13. The break-even point can be: A. Computed only from a mathematical B. Computed only by using contribution equation margin C. Derived only from a cost-volume-profit D. All of the options are correct graph 2.14. Direct materials inventories are kept in pounds in Byrd Company, and the total pounds of direct materials needed for production is 9,500. If the beginning inventory is 1,000 pounds and the desired ending inventory is 2,200 pounds, the total pounds to be purchased is: A.9,400 B. 9,500 C.9,700 D. 10.700 2.15. In a responsibility report for a profit center, controllable margin is: A. sales less variable costs B. Sales less controllable fixed costs. C. Contribution margin less controllable fixed D. Contribution margin less noncontrollable costs. fixed costs