1.In variable costing, when does fixed manufacturing overhead become an expense?

Question

1.In variable costing, when does fixed manufacturing overhead become an expense? Select one: a. Never b. In the period when the product is sold c. In the period when the expense is incurred d. At the time when units are produced

Question 2 Which of the following items appears on a variable costing income statement but not on a full costing income statement? Select one: a. Sales b. Gross margin c. Net income d. Contribution margin

Question 3 Ranger Productions experienced the following costs in 2014: Direct materials $1.50 per unit Direct labor $2.60 per unit Variable manufacturing overhead $1.20 per unit Variable selling costs $4.40 per unit Fixed manufacturing overhead $84,000 Fixed selling costs $32,000 Fixed administrative costs $15,000 During 2014, the company manufactured 65,000 units and sold 62,000 units. The unit cost is the same throughout the year. Beginning inventory is zero. How much will the company report as total variable product costs on its 2014 contribution income statement? Select one: a. $328,600 b. $601,400 c. $344,500 d. $630,500

Question 4 Last month, Brand Products manufactured 25,000 calculators and sold 23,000 of these calculators at a price of $10.00 each. Manufacturing costs consisted of direct labor, $30,000; direct materials, $32,000; variable manufacturing overhead, $3,500; fixed manufacturing overhead, $21,500. Selling and administrative costs are all fixed and totaled $24,000. Beginning inventory consists of no units. Brand Products uses full costing. How much will the company’s gross margin increase if sales increase 10%? Select one: a. Less than 10% b. More than 10% c. 10 d. It depends on other factors not given.

Question 5 Which of the following is not a reason that companies allocate costs? Select one: a. To calculate the full cost of products for financial reporting purposes b. To discourage managers from using external suppliers c. To reduce the frivolous use of company resources d. To provide information needed by managers to make appropriate decisions

Question 6 A major problem with cost-plus contracts is that they: Select one: a. include costs that do not follow GAAP. b. cause the supplier to take significant financial risks. c. require the supplier to use variable costing. d. create an incentive to allocate as much cost as possible to the goods produced under the contract. Question 7 Which of the following is a measure of activity used to distribute indirect costs? Select one: a. Cost objective b. Cost pool c. Cost driver d. Cost unitization

Question 8 Kamber Designs produces floral bouquets for commercial businesses (i.e. hotels) and uses an activity-based costing system. The company estimated that it would design 15,000 bouquets, make 2,000 deliveries totaling 25,000 miles, and accept 300 online orders. Data concerning overhead costs and activity pools is as follows: Bouquet designs $60,000 Deliveries 21,000 Online ordering 6,000 Total $87,000 During June, the company made 1,500 bouquets using 1,100 designs, made 325 deliveries and accepted 45 online orders. Using activity-based costing, what is the approximate overhead cost per bouquet during June? Select one: a. $7.92 b. $5.81 c. $5 d. None of these answer choices are correct.

Question 9 VelCraft allocates costs from its payroll department and the maintenance department to its production depart-ments using the direct method of allocation. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet that the production department occupies within the factory. Information about the departments is presented below: Number of Number of Square Department Costs Employees Feet Occupied Payroll $150,000 2 2,000 Maintenance $220,000 8 64,000 Molding 75 100,000 Finishing 50 60,000 Packaging 25 40,000 When the maintenance department costs are allocated, what amount will be charged to the molding de-partment? (Round your intermediate calculation to two decimal places) Select one: a. $44,000 b. $82,707 c. $110,000 d. $52,932 e. $6,000

Question 10 Which of the following is never considered in incremental analysis? Select one: a. Incremental revenue b. Sunk costs c. Incremental profit d. Differential costs

Explanation / Answer

1) Never

2) Gross MArgin

3) c) $ 334,500

4) Less than 10%

SInce we are allowed to answer only 4 questions so just answers of 4 are given.

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