practice exam 2

Topics: Variable cost, Costs, Fixed cost Pages: 5 (663 words) Published: November 13, 2014
Name: __________________________ Date: _____________
1. Super-Tech Industries had the following department information about physical units and percentage of completion:
Physical Units
Work in process, June 1 (75%)
8,000
Completed and transferred out
18,000
Work in process, June 30 (50%)
12,000
If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during June?
A) 15,000.
B) 30,000.
C) 32,000.
D) 24,000.
2. A department had the following information for the month: Total materials costs
$210,000
Conversion cost per unit
$3.00
Total manufacturing cost per unit
$5.00
What are the equivalent units of production for materials?
A) 105,000.
B) 70,000.
C) 42,000.
D) Cannot be determined
3. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

A) 80,000 equivalent units.
B) 94,000 equivalent units.
C) 90,000 equivalent units.
D) 100,000 equivalent units.

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4. In applying the high-low method, what is the fixed cost? Month
Miles
Total Cost
January
80,000
$144,000
February
50,000
120,000
March
70,000
141,000
April
90,000
195,000
A) $26,250
B) $54,000
C) $21,000
D) $75,000
5. Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $12 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?

A) 30%
B) 40%
C) 60%
D) 70%
6. Dunbar Manufacturing's variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $44,000. If sales are expected to increase $80,000, by how much will the company's net income increase? A) $36,000

B) $56,000
C) $24,000
D) $12,000
7. A division sold 100,000 calculators during 2013:
Sales
Variable costs:
Materials
$380,000
Order processing
150,000
Billing labor
110,000
Selling expenses
60,000
Total variable costs
Fixed costs
How much is the contribution margin per unit?
A) $2
B) $7
C) $17
D) $13

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$2,000,000

700,000
1,000,000

8. In 2012, Teller Company sold 3,000 units at $400 each. Variable expenses were $280 per unit, and fixed expenses were $180,000. The same selling price, variable expenses, and fixed expenses are expected for 2013. What is Teller's break-even point in sales dollars for 2013?

A) $600,000
B) $1,800,000
C) $1,200,000
D) $1,714,286
9. For Wilder Corporation, sales is $1,200,000 (6,000 units), fixed expenses are $360,000, and the contribution margin per unit is $80. What is the margin of safety in dollars? A) $60,000
B) $300,000
C) $540,000
D) $840,000
10. In 2012, Raleigh sold 1,000 units at $500 each, and earned net income of $50,000. Variable expenses were $300 per unit, and fixed expenses were $150,000. The same selling price is expected for 2013. Raleigh's variable cost per unit will rise by 10% in 2013 due to increasing material costs, so they are tentatively planning to cut fixed costs by $15,000. How many units must Raleigh sell in 2013 to maintain the same income level as 2012?

A) 794
B) 971
C) 1,176
D) 1,088
11. Capitol Manufacturing sells 3,000 units of Product A annually, and 7,000 units of Product B annually. The sales mix for Product A is
A) 30%.
B) 43%.
C) 70%.
D) Cannot determine from information given.
12. Swanson Company has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs $4,440,000 in...
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