Question 1: Marginal Maintenance Company makes screwdrivers in a single process and uses weighted average process costing. All material is added at the start of the process. The following information is available for May production:
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Units
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Beginning Work in Process (30% complete)
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4.000
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Plus : Units Started
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20.000
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Total to Account for
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24.000
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Less: Ending Work in Process (40% complete)
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5.000
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Units Completed
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19.000
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The following costs are available for May:
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rvlaterial
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Conversion Cost
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Total Cost
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Beginning Work in Process
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$7.800
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$7.000
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514.800
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Current Cost
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52.200
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56.000
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108.200
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Total Cost
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$60.000
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$63.000
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5123.000
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What are the equivalent units for conversion costs?
A 19,000
B 20,000
C 21,000
D 19,800
Question 2: Dreamland Company produces pillows. Each pillow has a variable cost of $8 and fixed costs are $78,000 per month. Each pillow sells for $17. If the company produces and sells 65,000 pillows in February, at this level of activity, total costs per unit are:
A $8.00.
B $9.20.
C $9.00.
D $7.80.
Question 3: PotteryWorks Company sold 60,000 units of product for $22 per unit. Their unit product cost using process costing is $11 per unit and the company has fixed costs of $240,000 per month. The company predicts that a $2 decrease in the selling price will generate a 20% increase in sales during the next period. If the company lowers the price which of the following will occur in the next period?
A Net income will increase by $36,000.
B Net income will decrease by $12,000.
C Total fixed costs will increase by $48,000.
D The variable costs per unit will decline by $2 per unit.
Question 4: Sam’s Chop has budgeted the following costs for a month in which 1,500 steak dinners will be produced and sold: Materials, $3,750; labor (variable), $3,000; rent(fixed),$2,400; straight-line depreciation, $600; and other costs that don’t change when the number of dinner sold changes, $1,800. Sam sells the steak dinners for $10.00 each.
What is the budgeted total fixed cost?
A $11,550
B $7,800
C $4,800
D $3,750
Question 5: Paul’s Pizza produced and sold 2,000 pizzas last month and had fixed costs of $6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true?
A Total fixed costs will increase.
B Total fixed costs will decrease.
C Fixed cost per unit will increase.
D Fixed cost per unit will decrease.