13.55
Contribution margin per unit
$
12.65
Difficulty: 1 Easy
Topic: Cost Classifications for Predicting Cost Behavior; Using Different Cost Classifications for Different Purposes
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.; 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
147) Macy Corporation's relevant range of activity is 4,000 units to 8,000 units. When it produces and sells 6,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials
$
4.95
Direct labor
$
3.25
Variable manufacturing overhead
$
1.45
Fixed manufacturing overhead
$
4.20
Fixed selling expense
$
1.05
Fixed administrative expense
$
0.60
Sales commissions
$
1.00
Variable administrative expense
$
0.50
If the selling price is $23.50 per unit, the contribution margin per unit sold is closest to:
A) $9.65
B) $6.50
C) $15.30
D) $12.35
Answer: D
Explanation:
Selling price per unit
$23.50
Direct materials
$4.95
Direct labor
3.25
Variable manufacturing overhead
1.45
Sales commissions
1.00
Variable administrative expense
0.50
Variable cost per unit sold
11.15
Contribution margin per unit
12.35
Difficulty: 1 Easy
Topic: Cost Classifications for Predicting Cost Behavior; Using Different Cost Classifications for Different Purposes
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.; 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
148) Bellucci Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
7.10
Direct labor
$
3.95
Variable manufacturing overhead
$
1.75
Fixed manufacturing overhead
$
105,300
Sales commissions
$
1.00
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
36,450
The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):
A) $26.75
B) $12.80
C) $30.05
D) $24.50
Answer: B
Explanation:
Direct materials
$
7.10
Direct labor
3.95
Variable manufacturing overhead
1.75
Incremental manufacturing cost
$
12.80
Difficulty: 1 Easy
Topic: Cost Classifications for Decision Making
Learning Objective: 01-05 Understand cost classifications used in making decisions: differential costs, sunk costs, and opportunity costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
149) Fiori Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials
$
6.05
Direct labor
$
3.05
Variable manufacturing overhead
$
1.70
Fixed manufacturing overhead
$
3.00
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40