Variable Cost and Contribution Margin
ACC604 Final Exam Practice Questions – Series H
1. The Work in Process inventory account of a manufacturing company shows a balance of $18,000 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $6,000 and $3,000 for materials, and charges of $4,000 and $2,000 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:
A. 50%
B. 200%
C. 300%
D. 20%
2. Job 607 was recently completed. The following data have been recorded on its job cost sheet:
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 607 would be:
A. $4,107
B. $6,319
C. $3,432
D. $4,863
3. Trauscht Corporation has provided the following data from its activity-based costing system:
The company makes 340 units of product P23F a year, requiring a total of 710 machine-hours, 80 orders, and 40 inspection-hours per year. The product 's direct materials cost is $40.05 per unit and its direct labor cost is $14.35 per unit. The product sells for $121.90 per unit.
According to the activity-based costing system, the product margin for product P23F is:
A. $9,223.20
B. $7,853.60
C. $5,401.60
D. $22,950.00
4. Kraska Corporation has provided the following data from its activity-based costing system:
Data concerning one of the company 's products, Product O11W, appear below:
According to the activity-based costing system, the product margin for product O11W is:
A. $4,651.80
B. $1,688.10
C. $17,934.00
D. $3,956.10
5. Iacopi Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. The best estimate of the total contribution margin
1. The Work in Process inventory account of a manufacturing company shows a balance of $18,000 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $6,000 and $3,000 for materials, and charges of $4,000 and $2,000 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:
A. 50%
B. 200%
C. 300%
D. 20%
2. Job 607 was recently completed. The following data have been recorded on its job cost sheet:
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 607 would be:
A. $4,107
B. $6,319
C. $3,432
D. $4,863
3. Trauscht Corporation has provided the following data from its activity-based costing system:
The company makes 340 units of product P23F a year, requiring a total of 710 machine-hours, 80 orders, and 40 inspection-hours per year. The product 's direct materials cost is $40.05 per unit and its direct labor cost is $14.35 per unit. The product sells for $121.90 per unit.
According to the activity-based costing system, the product margin for product P23F is:
A. $9,223.20
B. $7,853.60
C. $5,401.60
D. $22,950.00
4. Kraska Corporation has provided the following data from its activity-based costing system:
Data concerning one of the company 's products, Product O11W, appear below:
According to the activity-based costing system, the product margin for product O11W is:
A. $4,651.80
B. $1,688.10
C. $17,934.00
D. $3,956.10
5. Iacopi Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. The best estimate of the total contribution margin