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Exam 1: Managerial Accounting and Cost Concepts

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Question 51

True/False

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Property taxes and insurance premiums paid on a factory building are examples of period costs.

A) True
B) False

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Question 52

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A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the manufacturing overhead costs listed above for September is:

A) $669,000
B) $366,000
C) $34,000
D) $59,000

E) None of the above
F) A) and D)

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Question 53

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A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the product costs listed above for September is:

Gambino 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 $138.80 per unit. The best estimate of the total monthly fixed cost is:

Rent on a factory building used in the production process would be classified as a product cost and as a fixed cost.

Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September.Direct materials cost was $57,000,direct labor cost was $43,000,and manufacturing overhead was $71,000.Selling expense was $15,000 and administrative expense was $32,000. The prime cost for September was:

Depreciation on office equipment would be included in product costs.

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis,the total selling and administrative expense if Tudor Retailing Company sells 6,500 units during a month would be estimated to be:

A traditional format income statement organizes costs on the basis of behavior.

Calip Corporation,a merchandising company,reported the following results for October: The contribution margin for October is:

Emerton Corporation leases its corporate headquarters building.This lease cost is fixed with respect to the company's sales volume.In a recent month in which the sales volume was 32,000 units,the lease cost was $716,800. To the nearest whole cent,what should be the average lease cost per unit at a sales volume of 34,400 units in a month? (Assume that this sales volume is within the relevant range. )

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total monthly fixed manufacturing cost is:

In a manufacturing company,direct labor costs combined with direct materials costs are known as:

The salary paid to the maintenance supervisor in a manufacturing plant is an example of:

Baker Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total cost to manufacture 6,300 units is closest to:

The cost of factory machinery purchased last year is:

A direct cost is a cost that cannot be easily traced to the particular cost object under consideration.

Oaklis Company has provided the following data for maintenance cost: Maintenance cost is a mixed cost with variable and fixed components.The fixed and variable components of maintenance cost are closest to:

The nursing station on the fourth floor of Central Hospital is responsible for the care of orthopedic surgery patients.The costs of prescription drugs administered by the nursing station to patients should be classified as:

Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity.