$
4,000
If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to:
A) $9.00
B) $16.00
C) $11.55
D) $13.00
Answer: D
Explanation:
Selling price per unit
$
25.00
Direct materials
$
6.20
Direct labor
2.80
Variable manufacturing overhead
1.45
Sales commissions
1.00
Variable administrative expense
0.55
Variable cost per unit sold
12.00
Contribution margin per unit
$
13.00
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
201) Wessner Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.20
Direct labor
$
2.80
Variable manufacturing overhead
$
1.45
Fixed manufacturing overhead
$
12,000
Sales commissions
$
1.00
Variable administrative expense
$
0.55
Fixed selling and administrative expense
$
4,000
The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:
A) $16.00
B) $14.05
C) $10.45
D) $13.45
Answer: C
Explanation:
Direct materials
$
6.20
Direct labor
2.80
Variable manufacturing overhead
1.45
Incremental manufacturing cost
$
10.45
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
202) Pedregon Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.35
Direct labor
$
3.75
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
15,000
Sales commissions
$
0.50
Variable administrative expense
$
0.55
Fixed selling and administrative expense
$
4,500
If 4,000 units are sold, the variable cost per unit sold is closest to:
A) $16.55
B) $11.60
C) $12.65
D) $14.60
Answer: C
Explanation:
Direct materials
$
6.35
Direct labor
3.75
Variable manufacturing overhead
1.50
Sales commissions
0.50
Variable administrative expense
0.55
Variable cost per unit sold
$
12.65
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.