When using the high-low method, the variable cost per unit can be found as

	vertical intercept.
	rise over run.
	run over rise.
	change in volume over change in cost.

Question

Here are some basic data for Shannon Company:

Cost of materials purchases on account	$72,600
Cost of materials requisitioned (includes $2400 of indirect)	$53,000
Direct labor costs incurred	$79,000
Manufacturing overhead costs incurred, including indirect materials	$87,600
Cost of goods completed	$256,750
Cost of goods sold	$167,500
Beginning raw materials inventory	17,600
Beginning work in process inventory	33,900
Beginning finished goods inventory	35,700
Predetermined manufacturing overhead rate (as % of direct labor cost)	120%

The journal entry to record the cost of raw materials placed into production involves a

	debit to Work-in-Process inventory account for $50,600.
	debit to Overhead account for $50,600.
	debit to Work-in-Process Inventory account for $53,000.
	credit to Manufacturing Overhead account for $2400.

Question

Missy & Daughters allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:

Direct materials used	$50,000
Direct labor costs	$70,000
Wages of factory janitors	$39,100
Sales supervisor salary	$51,800
Utilities for factory	$16,000
Rent on factory building	$13,000
Advertising expense	$5,110

The company estimates that 2,160 direct labor hours will be worked in the upcoming year, while 1,300 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour will be

	$52.38.
	$96.16.
	$188.47.
	$22.31.

Question

With respect to unit variable costs, which of the following statements is true?

	They will increase as production decreases within the relevant range.
	They will remain the same as production levels change within the relevant range.
	They will decrease as production increases within the relevant range.
	They will decrease as production decreases within the relevant range.

Question

Which of the following cost of quality categories represents the cost incurred "lost profits from lost customers"?

	Prevention costs
	External failure costs
	Appraisal costs
	Internal failure costs

Question

Platinum Company manufactures several different products and uses an activity-based costing system. Information from its system for the year for all products follows:

Activity cost pool	Total cost	Total activity
Assembly	$506,000	24,000	Machine hours
Inspection	$94,800	4,800	Inspection hours
Packaging	$45,150	4,000	orders

The annual production and sales of one of its products, the Zinger, are 700 units. The following data relate to the production and sales of Widgets in the most recent year:

Annual machine hours	750
Annual number of orders	130
Annual number of inspections	85
Direct materials cost per unit	$121.40
Direct labor cost per unit	$60.80

What is the average cost of one Zinger? (Round all answers to two decimal places.)

	$234.32
	$26.06
	$163.08
	$208.26

Question

Watson's Computer Company uses ABC to account for its manufacturing process.

Activities	Indirect activity Budget	Allocation base (cost driver)
Materials handling	$49,000	Based on number of parts
Machine setup	$33,000	Based on number of setups
Assembling	$9,750	Based on number of parts
Packaging	$15,400	Based on number of finished units

Watson's Computer Company expects to produce 2810 computers. Watson's Computer Company also expects to use 14,000 parts and have 10 setups. The allocation rate for machine setups is

	$3,300.
	$975.
	$6.37.
	$1,540.

Question

The cost of evaluating potential raw material suppliers is an example of what type of cost?

	Prevention cost
	External failure cost
	Internal failure cost
	Appraisal cost

Question

In ABC, how is the activity allocation rate computed?

	The total estimated activity cost pool is divided by the total estimated activity allocation base.
	The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
	The total estimated total activity cost pool is subtracted from the total estimated activity allocation base.
	The total estimated activity allocation base is divided by the total estimated activity cost pool.

Question

A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is

	prevention costs.
	activity-based costing.
	appraisal costs.
	value engineering.