Question
9. Leonard International produces weekly 20,000 units of Product N and 40,000 units of Product B for which 900,000 common variable costs are incurred. These
9. Leonard International produces weekly 20,000 units of Product N and 40,000 units of Product B for which 900,000 common variable costs are incurred. These two products can be sold as is or processed further. Further processing of either product does not delay the production of subsequent batches of the joint products. Below are some information:
PRODUCT N | PRODUCT B | |
Unit selling price without further processing | 25 | 18 |
Unit selling price with further processing | 30 | 22 |
Total separate weekly variable costs of further processing | 100,000 | 90,000 |
What is the incremental profit associated with Product N?
A. 70,000
B. 0
C. 190,000
D. 90,000
10.
Total Manufacturing Costs | 325,000 |
Applied Overhead Costs, 75% of direct labor cost | 75,000 |
Selling expenses | 16,000 |
Administrative expenses | 14,000 |
What is the cost of direct materials?
A. 175,000
B. 220,000
C. 150,000
D. 193,750
11. Davis Corporation reported the following for the month of November:
Total hourly wages of plant workers | 80,000 |
Advertising | 134,000 |
Sales Commission | 40,000 |
Depreciation of machine used in production | 28,000 |
Depreciation of administrative equipment | 27,000 |
Indirect Labor | 25,000 |
Administrative Salaries | 95,000 |
Utilities, factory | 11,000 |
Direct Materials | 200,000 |
Freight Out | 20,000 |
What is the total period costs for November?
A. 316,000
B. 296,000
C. 364,000
D. 344,000
12. The Tentacool Telecom Supplies makes products Tenta and Cool in a joint process from a single input, Hydra.
During a typical production run, 50,000 units of Hydra yield 20,000 units of Product Tenta and 30,000 units of Product Cool at the split-off point. Joint production costs total 90,000 per production run.
The selling price per unit for Product Tenta is 4 and for Product Cool is 3.80 at the split-off point. However, Product Cool can be processed further at a total cost of 60,000 and then sold for 7.00 per unit.
If Product Cool is processed beyond the split-off point, the change in operating income from a production run (as compared to selling Product Cool at the split-off point) would be:
A. 10,000 decrease
B. 42,000 decrease
C. 36,000 increase
D. 96,000 increase
13. The monthly income statement for Jordan Stores is given below:
First Branch | Second Branch | Total | |
Sales | 1,200,000 | 800,000 | 2,000,000 |
Less: Variable Expenses | 840,000 | 360,000 | 1,200,000 |
Contribution Margin | 360,000 | 440,000 | 800,000 |
Less: Traceable Fixed Expenses | 210,000 | 180,000 | 390,000 |
Segment Margin | 150,000 | 260,000 | 410,000 |
Less: Common Fixed Expenses | 180,000 | 120,000 | 300,000 |
Profit (Loss) | ( 30,000 ) | 140,000 | 110,000 |
What are the total common fixed expenses if First Branch is eliminated?
A. 180,000
B. 300,000
C. 210,000
D. 120,000
14. Nowitzki Corporation sells sets of encyclopedias. Nowitzki sold 4,000 sets last year at 25,000 a set. The variable cost per set was 17,500 and the fixed costs for Nowitzki were 10,000,000.
What is Nowitzki's degree of operating leverage?
A. 0.33
B. 1.50
C. 2.00
D. 0.67
15. Kyrie Inc. can make 10,000 banners per month. Kyrie can sell 9,000 banners per month to NBA fans for 10 per banner. The company's costs per banner based on making 10,000 banners are:
Prime cost | 5.00 |
Overhead cost | 3.00 overhead is 2/3 fixed at that volume |
WBA offers to buy 1,000 banners with special WBA insignias for 7 per banner. Printing the special insignias will cost Kyrie 200.
What is the incremental cost associated with this special order?
A. 7,000
B. 6,200
C. 8,200
D. 8,000
16. The following are selected budgeted data for Green Company for the coming year:
Budgeted sales | 600,000 |
Selling price per unit | 12 |
Fixed expenses | 150,000 |
Variable cost per unit | 8 |
What is the breakeven point in units?
A. 150,000
B. 18,750
C. 37,500
D. 12,500
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