# Accounting-Dodero Company produces a single product which sells for \$100 per unit.

Question 1 (6 points)Dodero Company produces a single product which sells for \$100 per unit. Fixed expenses total \$12,000 per month, and variable expenses are \$60 per unit. The company’s sales average 500 units per month. Which of the following statements is correct?The company’s break-even point is \$12,000 per month.The fixed expenses remain constant at \$24 per unit for any activity level within the relevant range.The company’s contribution margin ratio is 40%.Responses A, B, and C are all correct.————Question 2 (6 points)Cherry Street Market reported the following information for the sales of their only product, cherries sold by the pint:Sales: Total = \$31,500 (Per Unit = \$4.50)Variable expenses: Total = \$9,450 (Per Unit = \$1.35)Contribution margin: Total = \$22,050 (Per Unit = \$3.15)Total fixed expenses = \$13,000Net operating income = \$9,050————Cherry Street would like to increase their selling price by 50 cents per unit, and feel that this will decrease sales volume by 10%. Should Cherry Street increase the price, and what will the effect be on net operating income?Yes; \$3,500 increaseYes; \$945 increaseNo; no changeNo; \$945 decreaseQuestion 3 (6 points)Hartl Corporation is a single product firm with the following selling price and cost structure for next year:Selling price per unit = \$1.80Contribution margin ratio = 40%Total fixed expenses for the year = \$218,700How many units will Hartl have to sell next year in order to break-even?121,500202,500303,750546,750Question 4 (3 points)In its first year of operations, Bronfren Corporation produced 800,000 sets and sold 780,000 sets of artificial tan lines. What would have happened to net operating income in this first year under the following costing methods if Bronfren had produced 20,000 fewer sets? (Assume that Bronfren has both variable and fixed production costs.)Variable costing = Increase; Absorption costing = IncreaseVariable costing = Decrease; Absorption costing = IncreaseVariable costing = Decrease; Absorption costing = DecreaseVariable costing = No effect; Absorption costing = DecreaseVariable costing = No effect; Absorption costing = No effectQuestion 5 (6 points)SaveA manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:Selling price = \$123Unit in beginning inventory = 0Units produced = 1,000Units sold = 900Units in ending inventory = 100Variable costs per unit:Direct materials = \$41; Direct labor = \$26; VMOH = \$4; Variable selling and administrative = \$6Fixed costs:FMOH = \$17,000; Fixed selling and administrative = \$11,700What is the net operating income for the month under variable costing?\$12,700\$5,600\$1,700\$14,400Question 6 (5 points)SaveSwifton Company produces a single product. Last year, the company had net operating income of \$40,000 using variable costing. Beginning and ending inventories were 22,000 and 27,000 units, respectively. If the fixed manufacturing overhead cost was \$3.00 per unit, what was the income using absorption costing?\$15,000\$25,000\$40,000\$55,000Question 7 (3 points)SaveUnder the theory of constraints (TOC), which of the following is treated as a period cost?Direct labor = Yes; Direct materials = YesDirect labor = Yes; Direct materials = NoDirect labor = No; Direct materials = YesDirect labor = No; Direct materials = NoQuestion 8 (6 points)SaveGould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:Information is given as Activity Cost Pool; Amount; Activity RateSetting up batches; \$59.06; per batchProcessing customer orders; \$72.66; per customer orderAssembling products; \$3.75; per assembly hourData concerning the two products is below:Product K91B:Number of batches = 84; number of customer orders = 32; number of assembly hours = 483Product F650:Number of batches = 50; number of customer orders = 43; number of assembly hours = 890How much overhead cost would be assigned to Product K91B using the activity-based costing system?\$9,097.41\$81,146.53\$4,961.04\$135.47Question 10 (4 points)SaveBetz Company’s sales budget shows the following projections for next year:Sales in Units: 1st Quarter = 60,000; 2nd Quarter = 80,000; 3rd Quarter = 45,000; 4th Quarter = 55,000Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each quarter is to equal 30% of the next quarter’s budgeted unit sales. How many units should be produced during the first quarter?24,00048,00066,00072,000Question 11 (4 points)SaveThe following are budgeted data:Sales in Units: Month 1 = 15,000; Month 2 = 20,000; Month 3 = 18,000Production in Units: Month 1 = 16,000; Month 2 = 22,000; Month 3 = 15,000One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month’s production needs. At the beginning of Month 1, 3,200 lbs. of materials were on hand. Purchases of raw materials for Month 2 would be budgeted to be:17,600 pounds23,400 pounds20,600 pounds25,000 poundsQuestion 12 (4 points)SaveThe following information relates to Minorca Manufacturing Corporation for next quarter:Expected sales (in units):January = 440,000; February = 390,000; March = 400,000Desired ending finished goods inventory (in units):January = 28,000; February = 30,000; March = 35,000How many units should Minorca plan on producing for the month of February?360,000 units388,000 units392,000 units420,000 unitsQuestion 13 (5 points)SaveThe budget for May called for production of 9,000 units. Actual output for the month was 8,500 units with total direct materials cost of \$127,500 and total direct labor cost of \$77,775. The direct labor standards call for 45 minutes of direct labor per unit at a cost of \$12 per direct labor-hour. The direct materials standards call for one pound of direct materials per unit at a cost of \$15 per pound. The actual direct labor-hours were 6,375. Variance analysis of the performance for the month of May would indicate:\$7,500 favorable materials quantity variance.\$1,275 favorable direct labor efficiency variance.\$1,275 unfavorable direct labor efficiency variance.\$1,275 unfavorable direct labor rate variance.Question 14 (6 points)SaveInformation on Rex Co.’s direct material costs for May follows:Actual quantity of direct materials purchased and used = 30,000 poundsActual cost of direct materials = \$84,000Unfavorable direct materials quantity variance = \$3,000Standard quantity of direct materials allowed for May production = 29,000 poundsFor the month of May, what was Rex’s direct materials price variance?\$2,800 favorable\$2,800 unfavorable\$6,000 unfavorable\$6,000 favorableQuestion 15 (4 points)SaveMatt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows:Standard price per pound of raw materials = \$1.60Actual purchase price per pound of raw materials = \$1.55Actual quantity of raw materials purchased = 2,000 poundsActual quantity of raw material used = 1,900 poundsStandard quantity allowed for actual production = 1,800 poundsWhat is the materials purchase price variance?\$90 favorable\$90 unfavorable\$100 favorable\$100 unfavorableQuestion 16 (3 points)SavePoorly trained workers could have an unfavorable effect on which of the following variances?Labor rate variance = Yes; Materials quantity variance = YesLabor rate variance = Yes; Materials quantity variance = NoLabor rate variance = No; Materials quantity variance = YesLabor rate variance = No; Materials quantity variance = NoQuestion 17 (5 points)SaveMagno Cereal Corporation uses a standard cost system to collect costs related to the production of its “crunchy pickle” cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of \$3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of \$253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno’s materials quantity variance for the month of August?\$1,500 unfavorable\$18,000 favorable\$19,500 unfavorable\$54,000 unfavorableQuestion 18 (5 points)SaveTub Co. uses a standard cost system. The following information pertains to direct labor for product B for the month of October:Actual price paid = \$8.40 per hourStandard rate = \$8.00 per hourStandard hours allowed = 2,000 hoursLabor efficiency variance = 000 hoursLabor efficiency variance = \$1,600 unfavorableWhat were the actual hours worked during October?1,8001,8102,1902,200Question 19 (3 points)SaveThe impact on net operating income of short-run changes in sales for a segment can be most clearly predicted by analyzing:the contribution margin ratio.the segment margin.the ratio of the segment margin to sales.net sales less segment fixed costs.Question 20 (3 points)SaveIn a segmented contribution format income statement, what is the best measure of the long-run profitability of a segment?it gross marginit contribution marginits segment marginits segment margin minus an allocated portion of common fixed expenses

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