Submitted by: Submitted by khalidyonis
Views: 495
Words: 2525
Pages: 11
Category: Business and Industry
Date Submitted: 05/21/2012 02:07 PM
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 -...