Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
131) Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974. What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)
A) $1,197,658
B) $1,191,000
C) $1,179,090
D) $1,202,910
Answer: A
Explanation: Variable cost per unit = $919,116 ÷ 9,900 units = $92.84 per unit
Total cost = Total fixed cost + Total variable cost
= $259,974 + ($92.84 per unit × 10,100 units)
= $259,974 + $937,684
= $1,197,658
Difficulty: 2 Medium
Topic: Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
132) Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours. The August budget is based on 8,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:
A) $10,100
B) $4,800
C) $500
D) $5,300
Answer: A
Explanation:
Y = $5,300 + ($0.60 per unit × X)
= $5,300 + ($0.60 per unit × 8,000 hours)
= $5,300 + $4,800
= $10,100
Difficulty: 1 Easy
Topic: Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
133) At an activity level of 7,200 machine-hours in a month, Falks Corporation's total variable production engineering cost is $556,416 and its total fixed production engineering cost is $226,008. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 7,300 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)
A) $107.93
B) $107.18
C) $108.67
D) $108.24
Answer: D
Explanation: Variable cost per machine-hour = $556,416 ÷ 7,200 machine-hours = $77.28 per machine-hour
Fixed cost per machine-hour at 7,300 machine-hours = $226,008 ÷ 7,300 machine-hours = $30.96 per machine-hour
Total cost = Variable cost + Fixed cost
= $77.28 per machine-hour + $30.96 per machine-hour
= $108.24 per machine-hour
Difficulty: 2 Medium
Topic: Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
134) Mullennex Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:
Average
Cost per Unit
Direct materials
$
6.55
Direct labor
$
3.50
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
3.00
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40
Sales commissions
$
1.50
Variable administrative expense
$
0.40
If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to:
A) $2.40
B) $2.70
C) $3.00
D) $3.75
Answer: A
Explanation:
Total fixed manufacturing overhead cost ($3.00 per unit × 4,000 units*) (a)
$
12,000
Number of units produced (b)
5,000
Average fixed manufacturing cost per unit produced
(a) ÷ (b)
$
2.40
*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 4,000 units.
Difficulty: 2 Medium
Topic: Cost Classifications for Predicting Cost Behavior