Accounting

The following information pertains to Clove Co.:

Budgeted sales $1,080,000
Breakeven sales $  620,000
Budgeted contribution margin $  520,000

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Clove’s margin of safety is:

$460,000

$720,000

$660,000

$560,000

 

 

 

 

 

22.
The following information relates to Clyde Corporation which produced and sold 57,000 units last month.

Sales $1,368,000
Manufacturing costs:
Fixed $210,000
Variable $205,100
Selling and administrative:
Fixed $300,000
Variable $  45,700

There were no beginning or ending inventories. Production and sales next month are expected to be 47,000 units. The company’s unit contribution margin next month should be: (Round your intermediate calculations and final answer to 2 decimal places)

$19.60

$23.56

$3.80

$9.38

23. In a contribution format income statement, sales minus cost of goods sold equals the gross margin.

True

False

24. In activity-based costing, some manufacturing costs may be excluded from product costs.

True

False
25. Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports.

True

False

 

26.
Umanzor Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company’s three activity cost pools as follows: Processing, $51,500; Supervising, $35,800; and Other, $26,600. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

MHs (Processing) Batches (supervising)
Product S5 15,300             1,060
Product F5 1,180             820
Total 16,480             1,880

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

$2.81 per MH

$3.13 per MH

$7.56 per MH

$3.43 per MH

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