Bc company estimates the following data for the coming

Question

Question Detail:

1)Under a relevant range of production, when total quantities sold increase, total fixed costs

	increase
	decrease
	remain equal
	there is no relationship

2)Conversion costs are

	only direct material
	only direct labor
	only overhead
	overhead and direct labor

3)XY Company sells its unique product at $30.00. Variable costs per unit are $20.00. Total fixed sales salaries per month $40,000.00. Other fixed costs per month $60,000.00. Assume that the company wants to change the sales salaries as follows: Total fixed sales salaries per month 25,000. Sales commission of 10% of sales.?Find at what sale-level is the company indifferent between the two alternatives

	$5,000
	5,000 units
	10,000
	7,500 units

4) AJ Company makes three products.	?	?	?
Current selling price per unit, variable cost per unit, and machine hours required are as follows:
?	?	Products	?
?	X	Y	Z
Current selling price per unit	$20	$30	$20
Variable cost per unit	10	18	12
Machine hours required for each unit	2	3	4
The company has a maximum of 1000 machine hours available per month.

Assume the company produces all products; find the total contribution margin per hour.

	$13.50
	$12
	$9
	$4

5) TC Company makes several printing works using two machines (X and Y).
Data on the two machines for June 2010 are as follows:
X	Y
Direct material	10	15
Time required for each unit (TR)	2	3
Expected volume during the month (EV)	2,000	500
Expected labor cost per hour	50
Budgeted overhead costs	660,000
Determine

The overhead rate per labor hour
	FOAR = $120.00 per hour worked
	FOAR = 120.00 per dollar
	FOAR = $60.00 per hour worked
	FOAR = $120.00 per overhead costs

6) Assume the cost structure is as follows: TC = 25,000 + 5q, where TC = total costs, q = quantities sold. Under relevant range of sales, selling price per unit is $8.00. Total fixed costs are

$100,000
$50,000
$25,000
More information is needed
7) The income statements of Tahany Company for June and July 2005 are as follows:
June	July
Sales				610	650
Cost of goods sold				420	460
Gross margin				190	190
Selling and administrative expenses				185	195
Income before tax				5	-5

Using High Low Method, the variable component of cost of goods sold is

	1.00
	.25
	1.25
	0

8) Non value added activities are

	Direct material (only)
	Direct labor (only)
	Overhead (only)
	Not essential costs to make/manufacture a product

9) Tany Corporation is a small table manufacturing company operating in the north of Puerto Rico.
Managers estimate the following costs per unit (one table)
Direct material (DM)	$6.00
Direct labor (DL)	$4.00
Variable manufacturing overhead (VMO)	$3.00
Variable administrative expenses (VAE)	$1.00
The estimated contribution margin is	30%
Monthly fixed costs are
Manufacturing	$10,000.00
Administrative	$5,000.00

	2,000
	2,200
	2,500
	2,750

10) Tany Corporation is a small table manufacturing company operating in the north of Puerto Rico.
Managers estimate the following costs per unit (one table)
Direct material (DM)	$6.00
Direct labor (DL)	$4.00
Variable manufacturing overhead (VMO)	$3.00
Variable administrative expenses (VAE)	$1.00
The estimated contribution margin is	30%
Monthly fixed costs are
Manufacturing	$10,000.00
Administrative	$5,000.00

Total unit sold during last month is 2525, what is the total operating income.

	between $100 and $120
	between $120 and $140
	between $140 and $160
	between $160 and $180

11) BC Company estimates the following data for the coming month: total variable costs $60,000.00, income tax rate 30%, contribution margin percentage 60%. Find the estimated total sales for the coming month.

	$100,000
	$60,000 / 40%
	$60,000 / 60%
	$60,000 X 60%

12) If a company raises its required net income

	the tax rate will decrease
	break even point is negative
	required contribution margin increases
	required contribution margin decreases

13)If a company raises its required operating profit

	break even point is negative
	break even point is zero
	required contribution margin increases
	required contribution margin decreases

14) Copy of

XYZ has three products X, Y and Z. The following information pertains to these products X, Y, and Z. Contribution margin percentages are 40%, 50%, and 40% respectively. Sales mix percentages are 20%, 30%, and 50% respectively. Monthly fixed costs are estimated to be $100.00. The weighted average contribution margin percentage is

	43%
	40%
	30%
	0

15) Which of the following examples is a short term decision?

	Make or buy decision
	Purchase of land
	Issuing bonds
	Joint venture
	Purchase of building

16) Sales (in units)	60,000
Selling price per unit	25
Manufacturing costs per unit:
Materials	5
Direct labor	4
Overhead
Variable	4
Fixed	6
Total	19
Gross margin	6
Selling and admin. Expenses per unit	2
Operating income	4
A company in a foreign market offer to buy and the offer specifies the following data
units to be sold	10000
price per unit	20
If the Company accepts the special offer, the incremental profit would be

	$70,000.00
	($70,000.00)
	$10,000.00
	($10,000.00)
17) Total Costs			Unit Cost
Direct materials			20,000	2.00
Direct labor			25,000	2.50
Variable overhead			15,000	1.50
Fixed overhead (non-avoidable)			24000	2.40
Fixed overhead (avoidable)			26,000	2.60
Purchase cost			85,999

Should the company produce the product internally?

	Yes
	No
	Indifferent to to make or to buy
	Yes if the market price per unit covers the fixed cost per unit.
18) Sales (in units)			60,000
Selling price per unit			25
Manufacturing costs per unit:
Materials			5
Direct labor			4
Overhead
Variable			4
Fixed			6
Total			19
Gross margin			6
Selling and admin. Expenses per unit (fixed)			2
Operating income			4
A company in a foreign market offer to buy and the offer specifies the following data
units to be sold			10,000
price per unit			13.1
Should the company sell this special order?
	Yes, accept
	No, reject
	Indifferent to reject or not
	Always reject

Which of the following costs should be considered in short term decisions?