Solved by verified expert :Questions I to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.1. Last year, Gftrnsky Corporation’s variable costing net operating income was $52,100, and its endinginventory increased iry aOb units. Fixed manufacturing overhead cost was $7 per unit. What was theabsorption costing net operating income last year?A. $54,900B. $2,800c. $52,100D. $49,3002. Use the following information to answer this question.Harris Company produces a single product. Last year, Halris manufactured 17,000 units and sold 13,000units. Production costs for the year were as follows:Production Cort Data$153,000Direct laborVariable overheadFixed manufactudng overheadSales were $780,000 for the year, variable selling and administative expenses were $88,400, and fixedselling and administative expenses were $170,000. There was no beginning inventory. Assume that directlabor is a variable cost.Under absorption costing, the carrying value on the balance sheet of the ending inventory for the yearwould beA. $190,800.B. $230,800.c. $170,000.D. $0.3. Indiana Corporation produces a single product that it sells for $9 per unit. During the first year ofoperations, 100,000 units were produced,-and 90,000 units were sold. Manufacturing costs and selling andadminisffative expenses for the year were as follows:$110,500$0.50 per unitproducedWhat was Indiana Corporation’s net operating income for the year using variable costing?A. $371,000B. S281,000c. $271,000D. $181,0004. Rank the following methods of assigning overhead costs from least assxate to most accurate.A. Plantwide rate, activity-based costing, deparhnental ratesB. DeparUnental rates, plantwide rate, activity-based costingC. Activity-based costing, departuental rates, plantwide rateD. Planfiride rate, deparffnental rates, activity-based costing5. A cost driver isA. a fixed cost that can’t be avoided.B. the largest single category of cost in a company.C. a factor that causes variations in a cost.D. an indirect cost thafs essential to the business.6. At a break-even point of 400 units sold, variable expenses were $4,000, and fxed expenses were$2,000. What will the 401st unit sold contribute to profit?A. $15B. $10c. $sD. $07. Use the following information to answer this question.Callaham Corporation is a wholesaler that sells a single product. Management has provided the followingcost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.$ales .v,olume, (unit$)4,000 5,0tDO[email protected]Cost of salesfssrr-oLThe best estimate of the total variable cost per unit isA. S84.50.B. $100.90.c. s10s.70.D. $106.90.8. A disadvantage of the high-low method of cost analysis is thatA. it uses two exteme data points, which may not be representative of norrnal conditions.B. ifs too time-consuming to apply.C. it can’t be used when there ile a very large number of observations.D. it relies totally on the judgment of the person perforrring the cost analysis.9. Use the following information to answer this question.Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of thecompany has provided the following data concerning the activity rates in its activity-based costing system:. The measrue of activity for the size-related activity cost pool is the number of planned guests at thewedding reception. The greater the number of guests, the larger the cake.. The measure of complexity is the number of tiers in the cake.. The activrty measure for the order-related cost pool is the number of orders. (Each wedding involvesone order.). The activrty rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. Theactivity rates don’t include the costs of purchased decorations, such as miniature statues and weddingbells, which are accounted for separately.Data concerning two recent orders are listed here:Suppose the company decides that the present activity-based costing system is too complex and that allcosts (except for the costs of purchased decorations) should be allocated on the basis of the nurnber ofAcfivity Cost Pools Lctivity RSte150.94 per guest-Complexity-related:,.4$31.62 per tierNumber of tiers on the cakeguests. In that event, what would you expect to happen to the costs of cakes?A. The cost of cakes for receptions with fewer than the average number of guests would go down.B. The cost of cakes for receptions with more than the average number of guests would go down.C. The costs of all cakes would go down.D. The costs of all cakes would go up.10. Use the following information to answer this question.Callaham Corporation is a wholesaler that sells a single product. Management has provided the followingcost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.Snles volumc (untts)5,000$422,500$106p00The best estimate of the total monthly fixed cost isA. $24,000.B. $427,600.c. $528,500.D. $478,050.11. Use the following information to answer this question.Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of thecompany has provided the following data concerning the activity rates in its activity-based costing system:. The measure of activity for the size-related activity cost pool is the number of planned guests at thewedding reception. The greater the nurnber of guests, the larger the cake.. The measure of complexity is the number of tiers in the cake.. The activity measure for the order-related cost pool is the number of orders. @ach wedding involvesone order.). The activity rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. Theactivrty rates don’t include the costs of purchased decorations, such as miniafure statues and weddingbells, which are accounted for separately.Data concenring two recent orders are listed here:Selling and adminisffative costsAcfiYity Cost Pools Acttvity Rate$0.94 per guest$31.62 per tier,j,,ry-.;’l :;TY,ffig’lNumber of reception guestsNumber of tiers on the cakeCost ofpurchased decorations for cakeAssuming that all of the costs listed above are avoidable costs in the event that an order is turned down,which amount would the company have to charge for the Pyburn wedding cake to just break even?A.s29.92B. $338.64c. $s5.79D. $279.8712. Use the following information to answer this question.Gargymal Company would like to estimate the variable and fixed components of its electrical costs and hascompiled the following data for the past five months of operations.illrchineHourslA-ugust I 1,000Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to whichof the following?A. $870.00B. $1,290.00c. $1,306.50D. $1,150.0013. Green Company’s variable experures are75o/o of sales. At a sales level of $400,000, the company’sdegree of operating leverage is 8. At this sales level, fixed expenses areA. $100,000.B. $50,000.c. $87,500.D. 575,000.14. Use the following information to answer this question.Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of thecompany has provided the following data concerning the activity rates in its activity-based costing system:ElectricalCost$1,620$1J10:$1,870sr,*,:Complexity-related $31.62 per tier. The measure of activity for the size-related activity cost pool is the number of planned guests at thewedding reception. The greater the number of guests, the larger the cake.. The measure of complexity is the number of tiers in the cake.. The activity measure for the order-related cost pool is the number of orders. (Each wedding involvesone order.). The activity rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. Theactivity rates don’t include the costs of purchased decorations, such as miniature statues and weddingbells, which are accounted for separately.Data conceming two recent orders are listed here:Number of reception guestslNumber of tiers on the cake 14 lllCost of ourchased decorations for cake lSZg.gZAssuming that the company charges $556.96 for the Smith wedding cake, what would be the overallmargin on the order?A. $1s2.45B. $460.30c. $165.41r). $96.6615. Mardist Corporation has sales of S100,000, variable expenses of $75,000, fixed exponses of $30,000,and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales?A. $187,500B. $180,000c. $225,500D. $200,00016. Use the following information to answer this question.Callatram Corporation is a wholesaler that sells a single product. Management has provided the followingcost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.Salcs voluw (unite)4,000, 51000I Cost of sales I srs.ooo ‘l s+zz.soo :Selling and adminishative costsThe best estimate of the total conffibution margn when 4,300 units are sold isA. $43,430.B. $64,070.c. $38,270.D. $134,590.17. Purchase-order processing is an example of alanA. unit-levelB. batch-levelC. product-levelD. organization- sustainingactivity.The company makes 240 units of product T91H ayea requiring a tota-lof 550 machine hours, 90 orders,and 40 io*p”ltioo hours per year. The product’s direct materials cost is $16.98 per unit, anl its direct laborcost is StZ.Og per gnit. e6oiaing to the activity-based costing system, the average cost of product T9lH isclosest to-per unit.A. $79.66B. $90.81c.$29.07D. $75.7019. Use the following information to answer this questionHarrisCompany produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000units. Production costs for the year were as follows:Produefion Co*tllatr$204,000Fixed manufacturing overheadAcdvity eo$PoolProcessing ordersSales were $780,000 for the year, variable selling and adminisEative expenses were $88,400, and fixed”se[ingand administative expenses were $170,@0. There was no beginning inventory. Assume that directlabor is a variable cost.The connibution margin per unit wasA. $17.50.B. $27.30.c. $32.s0.D. $25.70.20. Which of the following is tnre regarding the contribution margin ratio of a single-product company?A. The con&ibution margin ratio increases as the number of rmits sold increases.B. The contibution margin ratio multipliedby the variable expense perunit equals the confribution margin psr unit.C. As fixed expenses decrease, the contibution margin ratio increases.D. If sales increase, the dollar increase in net operating income can be computed by multiplying the contibution margin ratio bythe dollar increase in sales.
