Kent Company manufactures a product that sells for $64.00 and has variable costs of $35.00 per unit. Fixed costs are $348,000. Kent can buy a new production machine that will increase fixed costs by $20,500 per year, but will decrease variable costs by $4.50 per unit. Compute the contribution margin per unit if the machine is purchased. Multiple Choice $24.50. $29.00. $33.50. $36.50. $39.50. If a company reports profit margin of 33.1% and investment turnover of 1.20 for one of its investment centers, the return on investment must be: Multiple Choice 27.58%. 39.72%. 34.30%. 31.90%. 3.63%. Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Salaries Depreciation Advertising Total $ 56,000 35,000 69,000 Allocation Basis Number of employees Cost of goods sold Percentage of total sales Department Drilling Grinding Total Number of employees 1,600 2,400 4,000 Sales $ 392,000 588,000 $ 980,000 Cost of goods sold $ 144,400 235,600 $ 380,000 The amount of the advertising cost that should be allocated to Grinding for the current period is: Multiple Choice $27,600. O $88,400. O $41,400. O $392,000. $107,800. Differential Chemical produced 15,000 gallons of Preon and 20,000 gallons of Paron. Joint costs incurred in producing the two products totaled $8,100. At the split-off point, Preon has a market value of $6.00 per gallon and Paron $3.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used. Multiple Choice $1,620. $4,860. $7,415. $4,050. $3,240. The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Assembly. Number Purchase Orders Square Feet Department Purchasing Maintenance Fabrication Assembly Direct Expenses $ 41,000 23,400 105,000 71,000 16 4 3,750 2,250 Multiple Choice $8,200. $14,625. $8,775. $11,700. $32,800. The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Assembly. Number Purchase Orders Square Feet Department Purchasing Maintenance Fabrication Assembly Direct Expenses $ 41,000 23,400 105,000 71,000 16 4 3,750 2,250 Multiple Choice $8,200. $14,625. $8,775. $11,700. $32,800
