Q1. Caben Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.
|
Production volume
|
4,000 units
|
5,000 units
|
|
Direct materials
|
$45.70 per unit
|
$45.70 per unit
|
|
Direct labor
|
$40.70 per unit
|
$40.70 per unit
|
|
Manufacturing overhead
|
$134.80 per unit
|
$110.70 per unit
|
The best estimate of the total cost to manufacture 4,300 units is closest to:
A. $899,345
B. $951,160
C. $847,530
D. $915,010
Q2. Electrical costs at one of Athen Corporation's factories are listed below:
|
|
Machine-Hours
|
Electrical Cost
|
|
March
|
3,731
|
$35,243
|
|
April
|
3,728
|
$35,248
|
|
May
|
3,765
|
$35,479
|
|
June
|
3,793
|
$35,651
|
|
July
|
3,797
|
$35,692
|
|
August
|
3,701
|
$35,044
|
|
September
|
3,800
|
$35,694
|
|
October
|
3,735
|
$35,276
|
|
November
|
3,740
|
$35,325
|
Management believes that electrical cost is a mixed cost that depends on machine-hours. Using the high-low method to estimate the variable and fixed components of this cost, these estimates would be closest to:
A. $0.15 per machine-hour; $35,115 per month
B. $9.11 per machine-hour; $1,249 per month
C. $9.43 per machine-hour; $35,406 per month
D. $6.57 per machine-hour; $10,728 per month
Q3. At a sales level of $300,000, James Company's gross margin is $15,000 less than its contribution margin, its net operating income is $50,000, and its selling and administrative expenses total $120,000. At this sales level, its contribution margin would be:
A. $250,000
B. $155,000
C. $170,000
D. $185,000