Topic 2 Cost classification

Kế toán quản trị 1 (KTQT 1)

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Topic 2: Cost classification

Câu Hỏi 1
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Which of the following statements concerning direct and indirect costs is NOT true?
Select one:
A.
A direct cost is one that can be easily traced to the particular cost object.
B.
A particular cost may be direct or indirect, depending on the cost object.
C.
Whether a particular cost is classified as direct or indirect does not depend on the cost object.

D.
The factory manager's salary would be classified as an indirect cost of producing one unit of product.
Phản hồi
The correct answer is: Whether a particular cost is classified as direct or indirect does not depend on
the cost object.

Câu Hỏi 2
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Caraco Corporation has provided the following production and average cost data for two
levels of monthly production volume. The company produces a single product.

Production volume 7,000units 8,000units

Direct materials $ 87.40per unit $ 87.40per unit
Direct labor $ 20.20per unit $ 20.20per unit
Manufacturing overhead $ 101.50per unit $ 90.80per unit

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Topic 2: Cost classification

The best estimate of the total cost to manufacture 7,300 units is closest to:
Select one:
A.
$1,500,750

Total manufacturing overhead at 8,000 units = 8,000 units × $90.80 per unit = $726,400

Total manufacturing overhead at 7,000 units = 7,000 units × $101.50 per unit = $710,500

Variable manufacturing overhead per unit = Change in cost ÷ Change in activity

= ($726,400 – $710,500) ÷ (8,000 units – 7,000 units)

= $15,900 ÷ 1,000 units

= $15.90 per unit

Fixed cost element of manufacturing overhead = Total cost – Variable cost element

= $726,400 – (8,000 units × $15.90 per unit)

= $726,400 – $127,200

= $599,200

Total variable manufacturing cost = Direct materials + Direct labor + Manufacturing overhead

= ($87.40 per unit + $20.20 per unit) + $15.90 per unit

= $123.50 per unit

Total manufacturing cost = (Total variable manufacturing cost per unit ×

Total units manufactured) + Total fixed manufacturing cost

= ($123.50 per unit × 7,300 units) + $599,200

= $901,550 + $599,200

= $1,500,750

B.
$1,487,375
C.
$1,526,430

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Topic 2: Cost classification

D.
$1,448,320

Phản hồi
Total manufacturing overhead at 8,000 units = 8,000 units × $90.80 per unit = $726,400

Total manufacturing overhead at 7,000 units = 7,000 units × $101.50 per unit = $710,500

Variable manufacturing overhead per unit = Change in cost ÷ Change in activity

= ($726,400 – $710,500) ÷ (8,000 units – 7,000 units)

= $15,900 ÷ 1,000 units

= $15.90 per unit

Fixed cost element of manufacturing overhead = Total cost – Variable cost element

= $726,400 – (8,000 units × $15.90 per unit)

= $726,400 – $127,200

= $599,200

Total variable manufacturing cost = Direct materials + Direct labor + Manufacturing overhead

= ($87.40 per unit + $20.20 per unit) + $15.90 per unit

= $123.50 per unit

Total manufacturing cost = (Total variable manufacturing cost per unit ×

Total units manufactured) + Total fixed manufacturing cost

= ($123.50 per unit × 7,300 units) + $599,200

= $901,550 + $599,200

= $1,500,750

Total manufacturing overhead at 8,000 units = 8,000 units × $90.80 per unit = $726,400

Total manufacturing overhead at 7,000 units = 7,000 units × $101.50 per unit = $710,500

Variable manufacturing overhead per unit = Change in cost ÷ Change in activity

= ($726,400 – $710,500) ÷ (8,000 units – 7,000 units)

= $15,900 ÷ 1,000 units

= $15.90 per unit

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Topic 2: Cost classification

Fixed cost element of manufacturing overhead = Total cost – Variable cost element

= $726,400 – (8,000 units × $15.90 per unit)

= $726,400 – $127,200

= $599,200

Total variable manufacturing cost = Direct materials + Direct labor + Manufacturing overhead

= ($87.40 per unit + $20.20 per unit) + $15.90 per unit

= $123.50 per unit

Total manufacturing cost = (Total variable manufacturing cost per unit ×

Total units manufactured) + Total fixed manufacturing cost

= ($123.50 per unit × 7,300 units) + $599,200

= $901,550 + $599,200

= $1,500,750

The correct answer is: $1,500,750

Câu Hỏi 3
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Contribution margin and gross margin mean the same thing.

Select one:
True
False

Phản hồi
The correct answer is 'False'.

Câu Hỏi 4

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Topic 2: Cost classification

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Abburi Company's manufacturing overhead is 60% of its total conversion costs. If direct
labor is $52,000 and if direct materials are $28,000, the manufacturing overhead is:
Select one:
A.
$78,000

Manufacturing overhead = 0.60 × Conversion cost

Direct labor = $52,000

Conversion cost = Direct labor + Manufacturing overhead

Conversion cost = $52,000 + Manufacturing overhead

Conversion cost = $52,000 + (0.60 × Conversion cost)

0.40 × Conversion cost = $52,000

Conversion cost = $52,000 ÷ 0.40 = $130,000

Manufacturing overhead = 0.60 × Conversion cost

Manufacturing overhead = 0.60 × $130,000 = $78,000

B.
$42,000

C.
$34,667

D.
$120,000
Phản hồi
Manufacturing overhead = 0.60 × Conversion cost

Direct labor = $52,000

Conversion cost = Direct labor + Manufacturing overhead

Conversion cost = $52,000 + Manufacturing overhead

Conversion cost = $52,000 + (0.60 × Conversion cost)

0.40 × Conversion cost = $52,000

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Topic 2: Cost classification

Conversion cost = $52,000 ÷ 0.40 = $130,000

Manufacturing overhead = 0.60 × Conversion cost

Manufacturing overhead = 0.60 × $130,000 = $78,000

Manufacturing overhead = 0.60 × Conversion cost

Direct labor = $52,000

Conversion cost = Direct labor + Manufacturing overhead

Conversion cost = $52,000 + Manufacturing overhead

Conversion cost = $52,000 + (0.60 × Conversion cost)

0.40 × Conversion cost = $52,000

Conversion cost = $52,000 ÷ 0.40 = $130,000

Manufacturing overhead = 0.60 × Conversion cost

Manufacturing overhead = 0.60 × $130,000 = $78,000

The correct answer is: $78,000

Câu Hỏi 5
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A factory supervisor's wages are classified as:

Fixed manufacturing
Indirect labor
overhead
A) No No
B) Yes Yes
C) Yes No
D) No Yes
Select one:
A.
Choice A

B.
Choice B
C.

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Topic 2: Cost classification

Choice C

D.
Choice D
Phản hồi
The correct answer is: Choice B

Câu Hỏi 6
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Babuca Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product.

Production volume 11,800units 13,000units

Direct materials $ 761,100 $ 838,500
Direct labor $ 241,900 $ 266,500
Manufacturing overhead $ 1,010,800 $ 1,035,280
The best estimate of the total monthly fixed manufacturing cost is: (Round your
intermediate calculations to 2 decimal places.)
Select one:
A.
$770,080

Direct materials is a variable cost.

Direct labor is usually a variable cost, but it doesn't hurt to check.

Variable cost per unit = Change in cost ÷ Change in activity

= ($266,500 – $241,900) ÷ (13,000 units – 11,800 units)

= $24,600 ÷ 1200 units

= $20.50 per unit

Fixed cost = Total cost – Variable cost element

= $266,500 – ($20.50 per unit × 13,000 units)

= $266,500 – 266,500

= $0

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Topic 2: Cost classification

Manufacturing overhead:

Variable cost per unit = Change in cost ÷ Change in activity

= ($1,035,280 - $1,010,800) ÷ (13,000 units – 11,800 units)

= $24,480 ÷ 1200 units

= $20.40 per unit

Fixed cost = Total cost – Variable cost element

= $1,035,280 – ($20.40 per unit × 13,000 units)

= $1,035,280 – $265,200

= $770,080

Total fixed cost per month = $0 + $770,080 = $770,080

B.
$777,580
C.
$767,080
D.
$773,080
Phản hồi
Direct materials is a variable cost.

Direct labor is usually a variable cost, but it doesn't hurt to check.

Variable cost per unit = Change in cost ÷ Change in activity

= ($266,500 – $241,900) ÷ (13,000 units – 11,800 units)

= $24,600 ÷ 1200 units

= $20.50 per unit

Fixed cost = Total cost – Variable cost element

= $266,500 – ($20.50 per unit × 13,000 units)

= $266,500 – 266,500

= $0

Manufacturing overhead:

Variable cost per unit = Change in cost ÷ Change in activity

= ($1,035,280 - $1,010,800) ÷ (13,000 units – 11,800 units)

= $24,480 ÷ 1200 units

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Topic 2: Cost classification

= $20.40 per unit

Fixed cost = Total cost – Variable cost element

= $1,035,280 – ($20.40 per unit × 13,000 units)

= $1,035,280 – $265,200

= $770,080

Total fixed cost per month = $0 + $770,080 = $770,080

Direct materials is a variable cost.

Direct labor is usually a variable cost, but it doesn't hurt to check.

Variable cost per unit = Change in cost ÷ Change in activity

= ($266,500 – $241,900) ÷ (13,000 units – 11,800 units)

= $24,600 ÷ 1200 units

= $20.50 per unit

Fixed cost = Total cost – Variable cost element

= $266,500 – ($20.50 per unit × 13,000 units)

= $266,500 – 266,500

= $0

Manufacturing overhead:

Variable cost per unit = Change in cost ÷ Change in activity

= ($1,035,280 - $1,010,800) ÷ (13,000 units – 11,800 units)

= $24,480 ÷ 1200 units

= $20.40 per unit

Fixed cost = Total cost – Variable cost element

= $1,035,280 – ($20.40 per unit × 13,000 units)

= $1,035,280 – $265,200

= $770,080

Total fixed cost per month = $0 + $770,080 = $770,080

The correct answer is: $770,080

Câu Hỏi 7
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Topic 2: Cost classification

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The following costs were incurred in May:

Direct materials $ 43,100

Direct labor $ 24,800
Manufacturing overhead $ 18,100
Selling expenses $ 20,300
Administrative expense $ 28,700

Prime costs during the month totaled:

Select one:
A.
$42,900
B.
$67,900

Prime cost = Direct materials + Direct labor

= $43,100 + $24,800 = $67,900

C.
$86,000

D.
$135,000

Phản hồi
Prime cost = Direct materials + Direct labor

= $43,100 + $24,800 = $67,900

Prime cost = Direct materials + Direct labor

= $43,100 + $24,800 = $67,900

The correct answer is: $67,900

Câu Hỏi 8
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Topic 2: Cost classification

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A decrease in production will ordinarily result in a decrease in fixed production costs per unit.
Select one:
True
False

Phản hồi
The correct answer is 'False'.

Câu Hỏi 9
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The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
Select one:
True

False
Phản hồi
The correct answer is 'True'.

Câu Hỏi 10
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Topic 2: Cost classification

An income statement for Sam's Bookstore for the first quarter of the year is presented below:
Sam's Bookstore
Income Statement
For Quarter Ended March 31
Sales $ 960,000
Cost of goods sold 670,000
Gross margin 290,000
Selling and administrative expenses
Selling $ 108,000
Administration 120,000 228,000
Net operating income $ 62,000

On average, a book sells for $60. Variable selling expenses are $5 per book with the
remaining selling expenses being fixed. The variable administrative expenses are 4% of
sales with the remainder being fixed.

The contribution margin for Sam's Bookstore for the first quarter is:
Select one:
A.
$210,000
B.
$171,600
C.
$841,600

Unit sales = $960,000 ÷ $60 per book = 16,000 books

Sales $ 960,000
Variable expenses:
Cost of goods sold $ 670,000
Variable selling ($5 per book × 16,000 books) 80,000
Variable administrative (4% of $960,000) 38,400 788,400
Contribution margin $ 171,600

D.
$788,400

Phản hồi
Unit sales = $960,000 ÷ $60 per book = 16,000 books

Sales $ 960,000
Variable expenses:
Cost of goods sold $ 670,000
Variable selling ($5 per book × 16,000 books) 80,000
Variable administrative (4% of $960,000) 38,400 788,400
Contribution margin $ 171,600

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