Managerial accounting

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.

True

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False

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:

$244,250

$501,970

$167,570

$387,940

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:

$156,700

$72,100

$70,000

$56,700

4. The wages of factory maintenance personnel would usually be considered to be:

Option B

Option D

Option C

Option A

5.
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.)

$13,600

$22,667

$34,000

$20,400

6.Variable cost:

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.

 

 

7.
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.)

$323,500

$287,300

$333,000

$599,500

8. At the break-even point: Sales − Variable expenses = Fixed expenses.

True

False

9. Within the relevant range, variable cost per unit will:

increase as the level of activity increases.

remain constant.

decrease as the level of activity increases.

none of these.

10.
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.

Required:
Determine the dollar sales to attain the company’s target profit. (Omit the “$” sign in your response.)

Target profit $

 

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