Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
203) 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 total variable cost is closest to:
A) $58,400
B) $66,200
C) $50,600
D) $46,400
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
Variable cost per unit sold (a)
$
12.65
Number of units sold (b)
4,000
Total variable costs (a) × (b)
$
50,600
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
204) 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 produced, the total amount of manufacturing overhead cost is closest to:
A) $21,000
B) $14,000
C) $28,000
D) $17,500
Answer: A
Explanation:
Total variable manufacturing overhead cost
($1.50 per unit × 4,000 units)
$
6,000
Total fixed manufacturing overhead cost
15,000
Total manufacturing overhead cost (a)
$
21,000
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing Financial Statements
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.; 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
205) 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 the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:
A) $4.05
B) $6.00
C) $7.95
D) $10.50