At a sales volume of 40,000 units, Lonnie Company's total fixed costs are $40,000 and total variable costs are $60,000. The relevant range is 30,000 to 50,000 units.

If Lonnie were to sell 42,000 units, the total expected cost would be:

Multiple Choice

• $105,000

• $100,000

• $103,000

• $102,000

The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:

University Store, Inc.
Income Statement
For the Quarter Ended March 31
Sales			$	800,000
Cost of goods sold				560,000
Gross margin				240,000
Selling and administrative expenses
Selling	$	100,000
Administrative		110,000		210,000
Net operating income			$	30,000

On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.

If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

Garrison 16e Rechecks 2017-08-01

Multiple Choice

• $875,000

• $300,000

• $175,000

• $65,000

Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?

Multiple Choice

• The cost of the glue in a chair.

• The amount paid to the individual who stains a chair.

• The workmans compensation insurance of the supervisor who oversees production.

• The factory utilities of the department in which production takes place.