Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
215) Lagle Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:
A) $12,200
B) $7,800
C) $4,400
D) $8,100
Answer: A
Explanation:
Sales commissions
$
1.50
Variable administrative expense
0.45
Variable selling and administrative expense per unit
$
1.95
Total variable selling and administrative expense
($1.95 per unit × 4,000 units sold)
$
7,800
Total fixed selling and administrative expense
4,400
Total period (nonmanufacturing) cost
$
12,200
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements; Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.; 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
216) Lagle Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
If 5,000 units are sold, the variable cost per unit sold is closest to:
A) $14.60
B) $11.50
C) $9.55
D) $11.55
Answer: B
Explanation:
Direct materials
$
4.85
Direct labor
3.35
Variable manufacturing overhead
1.35
Sales commissions
1.50
Variable administrative expense
0.45
Variable cost per unit sold
$
11.50
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
217) Lagle Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
If 5,000 units are sold, the total variable cost is closest to:
A) $47,750
B) $73,000
C) $57,500