Managerial Accounting

Managerial Accounting Exercise:

1. (TCO A) Wages paid to the factory manager are considered an example of:

Direct Labor - yes, Period Cost - yes

Direct Labor - yes, Period Cost - No

Direct Labor - no , Period Cost - yes

Direct Labor - no , Period Cost - no

Factory manager cost would be an overhead and so is not direct labor and is a product cost and not a period cost.

2. (TCO A) Machinery Depreciation on a manufacturing plant is an element of:

Conversion cost - yes, period cost - no

Conversion cost - yes, period cost - yes

Conversion cost - no, period cost - yes

Conversion cost - no, period cost - no

Machinery depreciation is an overhead cost and so is a part of conversion cost (direct labor + overhead) and is a product cost and not a period cost.

3. (TCO B) Evergreen Corp. has provided the following data:

Sales per period 1,000 units

Selling price $40 per unit

Variable manufacturing cost $12 per unit

Selling expenses $5,100 plus 5% of selling price

Administrative expenses $3,000 plus 20% of selling price

The number of units needed to achieve a target net operating income of $63,900 would be:

4,000 units

3,950 units

4,150 units

4,050 units

Total variable cost = 12 + 40X5% +40X20% = $22

Total fixed cost = 5,100+3,000=8,100

Units needed = (fixed cost + desired operating income)/unit contribution margin

=(8,100 + 63,900)/(40-22) = 4,000 units

4. (TCO B) Garth Company sells a single product. If the selling price per unit and the variable expense per unit both increase by 15% and fixed expenses do not change, then:

Contribution Margin Per Unit - Increases, Contribution Margin Ratio - Increases, Break-Even in Units -...