MANAGERIAL ACCOUNTING

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Starlight Company manufactures part 2HD for use in its production cycle. The per unit cost for 2,000 units of part 2HD are as follows:

Direct Labor	25
Direct Materials	5
Fixed Overhead	20
Variable Overhead	10

United Supreme has offered to sell Starlight 2,000 units of part 2HD for 50 per unit. If starlight accepts the offer, the released facilities could be used to save 30,000 in relevant costs in its manufacture of part 2HD. In addition, 10 per unit of fixed overhead applied to part 2HD would be eliminated.

What is the total cost of buying part 2HD?

Group of answer choices

30,000

130,000

70,000

100,000

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The following data are obtained from Gianna Manufacturing Company:

• Cost of goods manufactured is 187,500
• Inventory variations are as follows: raw materials ending inventory is 1/3 based on raw materials beginning; no initial inventory of work in process, but at the end of period 12,500 was on hand; finished goods inventory was four times as large at the end of the period as at the start.
• Net income after taxes amounted to 26,000, the income tax rate is 35%
• Purchases of raw materials amounted to net income before taxes
• Breakdown of costs incurred in manufacturing cost was as follows:
  • Raw materials consumed - 50%
  • Direct labor - 30%
  • Manufacturing overhead - 20%

The total amount of direct labor was ____________ .

Group of answer choices

100,000

60,000

90,000

40,000

----

The following data relates to the total manufacturing overhead of ABBOTT E. for a recent four-month period. The high-low method is used to estimate the variable and cost element of the mixed cost.

DIRECT LABOR HOURS MANUFACTURING OVERHEAD

May 90,000 213,000

June 100,000 227,000

July 70,000 185,000

August 80,000 199,000

Compute for the fixed element of manufacturing overhead cost per direct labor hour.

Group of answer choices

87,000

140,000

98,000

185,000

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Toledo Toy Company incurred the following costs during 20x4. The company sold all of its products manufactured during the year.

Direct Materials	5,000,000
Direct Labor	3,500,000
Manufacturing Overhead:
Utilities (primarily electricity)	250,000
Depreciation Plant and Equipment	350,000
Insurance	260,000
Supervisory Salary	470,000
Property Taxes	330,000
Selling Cost:
Advertising	315,000
Sales Commission	145,000
Administrative Costs:
Salaries of Top management	580,000
Office Supplies (fixed)	70,000
Depreciation on Building and Equipment	140,000

During 20x4, the company operated at about half of its capacity, due to a slowdown in the economy. Prospects for 20x5 are slightly better. Jared Lowes, the marketing manager, forecasts a 30 percent growth in sales over the 20x4 level

How much is the TOTAL FIXED COST of Toledo Toy Company in 20x4?

Group of answer choices

2,515,000

2,445,000

2,375,000

2,500,000

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The following data for the just-completed year are taken from the accounting records of Eccles Company:

Costs incurred:
Advertising expense	0100,000
Direct labor cost	90,000
Purchases of raw materials	132,000
Rent, factory building	80,000
Indirect labor	56,300
Sales commissions	35,000
Utilities, factory	9,000
Maintenance, factory equipment	24,000
Supplies, factory	700
Depreciation, office equipment	8,000
Depreciation, factory equipment	40,000

Inventories:	Beginning of the Year	End of the Year
Raw Materials	08,000	10,000
Work-in-Process	05,000	20,000
Finished Goods	70,000	25,000

The COST OF GOODS MANUFACTURED amounts to ____________ .

Group of answer choices

460,000

210,000

415,000

430,000

----

Detroit Disk, Inc. is a retailer of digital video disks. The projected net income for the current year is 600,000 based on a sales volume of 400,000 video disks. Detroit Disk has been selling the disks for 24 each. The variable costs consist of the 15 unit purchase price of the disks and a handling cost of 3 per disk. Detroit Disk's annual fixed costs are 1,800,000.

Management is planning for the coming year when it expects that the unit purchase price of the video disks will increase 30 percent. (Ignore income taxes.)

Detroit Disk's INCOME for the current year if there is a 10% increase in projected unit sales volume is ____________ .

Group of answer choices

840,000

2,160,000

660,000

1,980,000

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Summit Company provided the inventory balances and manufacturing overhead cost data for the month of January. Under summit's cost system, any over-or underapplied is closed to cost of goods sold account at the end of the calendar year.

Inventories:	January 1	January 31
Direct Materials	30,000	40,000
Work-in-Process	15,000	20,000
Finished Goods	65,000	50,000

Additional information:

Month of January
Factory Overhead Applied	150,000
Cost of Goods Manufactured	515,000
Direct Materials Used	190,000
Actual Factory Overhead	144,000

The COST OF GOODS SOLD if under-or overapplied overhead were allocated to inventories and cost of goods sold is ____________ .

Group of answer choices

509,700

524,700

530,300

526,300

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The estimated unit costs for SCREEK, when operating at a production and sales level of 10,000 units, are as follows: Direct materials - 20; Direct labor - 15; Variable manufacturing overhead - 22; Fixed manufacturing overhead - 10; Variable distribution - 9; and Fixed distribution - 8.

The estimated prime cost per unit for 10,000 units is

Group of answer choices

35

28

38

43

-----

Detroit Disk, Inc. is a retailer of digital video disks. The projected net income for the current year is 600,000 based on a sales volume of 400,000 video disks. Detroit Disk has been selling the disks for 24 each. The variable costs consist of the 15 unit purchase price of the disks and a handling cost of 3 per disk. Detroit Disk's annual fixed costs are 1,800,000.

Management is planning for the coming year when it expects that the unit purchase price of the video disks will increase 30 percent. (Ignore income taxes.)

Detroit Disk's BREAK-EVEN POINTin the number of video disks for the current year is ____________ .

Group of answer choices

200,000

300,000

75,000

400,000