1. An activity-based costing system should include all of the activities carried out in an organization because any simplification will inevitably result in inaccuracy.
2. Ladanza Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $135.00 per unit.
Sales volume (units) 11,000 12,120
Cost of sales $935,000 $1,030,200
Selling and administrative costs $627,000 $644,920
The best estimate of the total contribution margin when 11,410 units are sold is:
3.The following costs were incurred in September:
Direct materials $42,700
Direct labor $29,400
Manufacturing overhead $27,300
Selling expenses $23,600
Administrative expenses $33,700
Conversion costs during the month totaled:
4. The wages of factory maintenance personnel would usually be considered to be:
South Company sells a single product for $30 per unit. If variable expenses are 60% of sales and fixed expenses total $13,600, the break-even point in sales dollars will be: (Do not round intermediate calculations.)
increases on a per unit basis as the number of units produced increases.
remains constant on a per unit basis as the number of units produced increases.
decreases on a per unit basis as the number of units produced increases.
remains the same in total as production increases.
The contribution margin ratio is 20% for Grain Company and the break-even point in sales is $254,500. To obtain a target net operating income of $69,000, sales would have to be: (Do not round intermediate calculations.)
8. At the break-even point: Sales − Variable expenses = Fixed expenses.
9. Within the relevant range, variable cost per unit will:
increase as the level of activity increases.
decrease as the level of activity increases.
none of these.
The contribution margin ratio of Thronson Corporation’s only product is 69%. The company’s monthly fixed expense is $455,400 and the company’s monthly target profit is $41,400.
Determine the dollar sales to attain the company’s target profit. (Omit the “$” sign in your response.)
Target profit $