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6. 7,732 units The cost of direct materials is classified as a A. Neither a Prime Cost or a Conversion Cost B. Conversion Costs but not a Prime Cost C. Prime cost but not a Conversion Cost D. Prime Cost and a Conversion Cost 7. Variable Costs can be expected to: A. Vary in total in direct proportion to changes in the activity level B. Remain constant in total as the activity level changes C. Increase on a per unit basis as the activity level increases D. Increase on a per unit basis as the activity level decreases 8. Boersma Sales, Inc., a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit. Cost of goods sold, which is a variable cost, was $317 per unit. Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit. The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000. Gross Margin for September was: A. $2,122,900 B. $2,591,500 c. $1,627,700 D. 4,347,000 9. Slacker Corporation uses a job-order costing system with a single plant-wide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $150,000, variable manufacturing overhead of $3.50 per machine-hour, and 60,000 machine-hours. Recently, Job A was completed with total machine hours of 100 hours, direct materials of $645 and direct labor costs of $2,300. The total job costs for Job A is: A. $3,545 B. $3,195 C. $3.045 D. $3,595 10. In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A. Predetermined overhead rate - Actual manufacturing overhead + Actual machine-hours. B. Predetermined overhead rate - Actual manufacturing overhead Estimated machine-hours. C. Predetermined overhead rate = Estimated manufacturing overhead - Estimated machine-hours. D. Predetermined overhead rate = Estimated manufacturing overhead - Actual machine-hours