1. For July, Telly Corporation has budgeted production of 6,000 units. Each unit requires 0.10 direct labor-hours at a cost of $8.50 per direct labor-hour. How much will White Corporation budget for labor in July?
a. $600
b. $5,100
c. $5,160
d. $51,000
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2. A company that produces a single product had a net operating income of $75,000 using variable costing and a net operating income of $95,000 using absorption costing. Total fixed manufacturing overhead was $50,000 and production was 10,000 units both this year and last year. Last year was the first year of operations. Between the beginning and the end of the year, the inventory level:
a. increased by 4,000 units
b. decreased by 4,000 units
c. decreased by 20,000 units
d. increased by 20,000 units
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3. Riteway Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $62,000 annually and one salaried estimator who is paid $36,000 annually. The corporate office has two office administrative assistants who are paid salaries of $40,000 and $32,000 annually. The president's salary is $138,000. How much of these salaries are common fixed expenses?
a. $138,000
b. 258,000
c. $72,000
d. $210,000
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4. Activity-based costing involves a two-stage allocation in which overhead costs are first assigned to departments and then to jobs.
True of False. Explain