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Q: Figure 7-3.Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor Inc. and Bello Company. Both suppliers are reliable and rarely deliver late; however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.I. Activity DataActivity CostInspecting components (sampling only)$ 190,000Reworking products (due to failed component)$2,254,000Warranty work (due to failed component)$1,723,000 II. Supplier DataTraynorBelloInc.CompanyUnit Purchase Price$10.00$8.95Units Purchased22,50052,500Sampling Hours502,450Rework hours1353,625Warranty hours4756,000Refer to Figure 7-3. Calculate the total cost per component associated with using Bello Company as the supplier. a. $12.00 b. $8.95 c. $84.26 d. $15.74 e. $86.25

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Q: Figure 7-2.Steller Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are found below:ActivityJIT distributorsNon-JIT distributorsSales Orders40025Sales Calls2020Service Calls18080Average Order Size751,200Manufacturing cost/unit$40$40 Customer Costs: Processing Sales Orders$150,000 Selling Goods$145,000 Servicing Goods$185,000 Total$480,000 Refer to Figure 7-2. Calculate the total customer cost for the JIT distributor rounded to the nearest dollar. a. $487,500 b. $341,753 c. $600,000 d. $250,050 e. $448,791

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Q: Figure 7-1.The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $2,000 per year. Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year. Receiving has four employees who each have an average salary of $35,000 per year. The work distribution matrix for the receiving personnel is as follows: Percentage of TimeActivityon Each ActivityUnloading25%Counting40%Inspecting35%Refer to Figure 7-1. Calculate the cost of unloading. a. $50,500 b. $56,000 c. $52,000 d. $54,000

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Q: The break-even point is where total sales revenue equals total cost. a. True b. False

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Q: Match each item with the correct statement below.a. break-even pointb. Common fixed expensesc. Contribution margind. Direct fixed expensese. Margin of safetyf. Operating leverageg. Degree of operating leverageh. Sales mix The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume.

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Q: Match each item with the correct statement below.a. break-even pointb. Common fixed expensesc. Contribution margind. Direct fixed expensese. Margin of safetyf. Operating leverageg. Degree of operating leverageh. Sales mixThe use of fixed costs to extract higher percentage changes in profits as sales activity changes.

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Q: Given the following numbers from Webster Company, match the correct value with its appropriate term.Webster Company sells a product for $20. Unit cost information is as follows:Direct materials $7Direct labor $3Variable overhead $4Fixed overhead $1Webster normally produces 50,000 units and the fixed overhead rate is based on this amount. Fixed selling and administrative expense is $87,000.a. $6b. 30%c. $14d. 70%e. $290,000f. 14,500Variable cost ratio

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Q: Ross Company has the following information available regarding costs at various levels of monthly production:Production volume 7,000 units 10,000 unitsDirect materials $ 70,000 $100,000Direct labor 56,000 80,000Indirect materials 21,000 30,000Supervisors' salaries 12,000 12,000Depreciation on plant 10,000 10,000Maintenance 32,000 44,000Utilities 15,000 21,000Insurance on plant and equipment 1,600 1,600Property taxes on plant 2,000 2,000Total $219,600 $300,600 A. Identify each cost as being variable, fixed, or mixed by writing the name of each cost under one of the following headings: Variable Costs Fixed Costs Mixed CostsB. Develop an equation for total monthly production costs.C. Predict total costs for a monthly production volume of 8,000 units.

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Q: Harnow Company manufactures drill presses. Based on past experience, Harnow has found that its total overhead cost can be represented by the following formula: Total overhead cost = $35,500 + $1.25x, where x = number of machine hours. Last year Harnow incurred 120,000 machine hours. Required (round to the nearest cent): A. What was the total overhead cost incurred by Harnow last year? B. What was the total variable overhead cost incurred by Harnow last year? C. What was the total overhead cost per machine hour last year? D. What was the fixed overhead cost per machine hour last year? E. If Harnow incurs 140,000 machine hours next year, what will be the total overhead cost per machine hour?

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Q: Figure 3-14.Blacken Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected. Utility MachineMonth cost hoursMarch $30,255 2,200April 32,750 2,525May 34,712 2,710June 31,850 2,410July 30,720 2,290 Refer to Figure 3-14. Using a regression program, the yearly utility cost equation (with all variables to the nearest penny) is a. total utility cost = $127,569.60 + ($8.83 × machine hours). b. total utility cost = $10,630.80 + ($8.83 × machine hours). c. total utility cost = $8.83 + ($10,630.80 × machine hours). d. total utility cost = $10,630.80 − ($8.83 × machine hours).

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Q: Room With A View Company manufactures curtains. Last week, direct materials costing $42,000 were put into production. Direct labor of $22,000 was incurred and overhead totaled $50,000. By the end of the week, the company had produced 12,000 curtains.1) Calculate the total prime cost for the week.2) Calculate the per-unit prime cost.3) Calculate the total conversion cost for the week.4) Calculate the per-unit conversion cost.

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Q: Ross Company makes handbags. Last month direct materials (leather, thread, zippers, decorative accents) costing $76,000 were put into production. Ross had 30 workers, each worked 160 hours this month and each are paid $12 per hour. Overhead equaled $80,000 for the period. Ross Company produced 40,000 handbags as of the end of the month.Calculate the total product cost for the month and calculate the cost of one handbag that was produced.

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Q: Stone Company, maker of computers, incurred the following costs during the year:Classify each cost as either fixed or variable cost.FixedVariable1) Salary of the factory supervisor2) Materials needed to assemble the computers3) Wages paid to an assembly line worker4) Depreciation on the factory5) Utility bill for the factory6) Grease used to lubricate the machine7) Rent paid for the factory8) Property taxes on the factory and corporate office9) Boxes used to package the completed computers10) Advertising in a newspaper monthly

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Q: Information from the records of Place, Inc., for December is as follows: Sales $820,000 Selling and administrative expenses 140,000 Direct materials purchases 176,000 Direct labor 200,000 Factory overhead 270,000 Direct materials, December 1 24,000 Work in process, December 1 50,000 Finished goods, December 1 46,000 Direct materials, December 31 28,000 Work in process, December 31 56,000 Finished goods, December 31 38,000 Net income for the month of December is: a. $644,000. b. $36,000. c. $636,000. d. $180,000.

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Q: Figure 2-4.Junko Company makes financial calculators. During the year Junko manufactured 97,000 financial calculators. Finished goods inventory had the following units on hand: 1-January 1,260 31-December 1,040 Refer to Figure 2-4. If each financial calculator had a per-unit product cost of $112, what was the cost of Finished goods inventory on December 31? a. $116,480 b. $141,120 c. $24,640 d. none of these are correct

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Q: Figure 2-4.Junko Company makes financial calculators. During the year Junko manufactured 97,000 financial calculators. Finished goods inventory had the following units on hand: 1-January 1,260 31-December 1,040 Refer to Figure 2-4. How many financial calculators did Junko sell during the year? a. 96,780 b. 97,220 c. 97,000 d. 98,260

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Q: Employees who convert direct materials into a product or who provide a service to customers are classified as indirect labor. a. True b. False

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Q: Marketing costs would be classified as period costs. a. True b. False

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Q: Direct materials can be directly traced to the goods or services being produced. a. True b. False

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Q: Industries that provide services do not normally have direct contact with their customers. a. True b. False

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Q: Glue used in the manufacture of cabinets would be an example of a fixed cost. a. True b. False

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Q: A cost object is something for which a company wants to know the cost. a. True b. False

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Q: An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another. a. True b. False

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Q: A fixed cost is a cost that does not increase in total as output increases and does not decrease in total as output decreases. a. True b. False

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Q: Select the appropriate definition of each of the items listed below. a. Income Statement b. Cost of goods manufactured c. Work in process d. Gross margin e. Operating income Cost of partially completed goods

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Q: Select the appropriate item for each of the definitions listed below. a. gross margin b. selling expenses c. sales revenue d. cost of goods sold e. operating income sales revenue - cost of goods sold

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Q: Select the appropriate definition for each of the items listed below. a. Work in process inventory b. Finished goods inventory c. Cost of goods sold d. Cost of goods manufactured e. Total manufacturing costs Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory

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Q: Select the appropriate definition for each of the items listed below. a. Work in process inventory b. Finished goods inventory c. Cost of goods sold d. Cost of goods manufactured e. Total manufacturing costs The cost of units unfinished at the end of the current period

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Q: Select the appropriate definition for each of the items listed below. a. Work in process inventory b. Finished goods inventory c. Cost of goods sold d. Cost of goods manufactured e. Total manufacturing costs The cost of units finished but not sold at the end of the current period

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Q: Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead A professor's salary at a university

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