QUESTION 13 Jenny\'s Cutting Station is a new concept in haircuts; low cost and

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QUESTION 13 Jenny's Cutting Station is a new concept in haircuts; low cost and very quick Set in a loc al mall, Jenny's oflers 15 minute haircuts for hamed shoppers who d appointments. To ensure that the chents are in and out quickly, she schedules her 5 employees based on expected clent tratfic. Each of the employees is pa heir pay coming from chent tps. Jenny pays rent and overhead costs of $2,000 per month. Because of the quick nature of the service, Jenny doesnT have tim cients, so she uses a new comb for each customer, at a cost of $ 55 each. She abo provides shampoo and conditioner for each client at a cost of $ 95 per cle haircut is $12 Jenny pays herself $5,000 per month. What is Jonny's contribution margin per haircut? O A $11.45 BS1050 O C $11.05 O D $10 20 QUESTION 14 Direct labor costs include all of the following except O A Wages of workers who transform direct materials into e finised product O B. Supervisors who oversee the production process O C Wages of workers who actualy have his or O D Benefts paid to the workers who bransform deect materials into finished products her hands on the potet or on tema hea aste podeabae made QUESTION 15 t activitly level increases, what happens to the unit fxed cost? OA increases O B. It decreases O C It remains the same O D. in depends on how much the activity level increases QUESTION 16 The cost of goods manfactured O A Is always the same as the total dieect costs O B. Is recceded as a debit to Work in Process Inventory OCIs recorded as a debil to the Frashed Goods Inventory account O D. Is also refermed to as the cost of goods sold QUESTION 17 Four cornnon cost behavior patterns that serve as the foundation for cost-voumetro O A Variable cost, fxed cost, selling cost, and administrative cost O B. Variable cost, fxed cost, mined cost, and stop cost O C Variable cost, fxed cost period cost and other cost asans ae D Seing cost, administrase cost cost of goods sold and d preciation DOLL

Explanation / Answer

1. question 13., some information is missing at ends which is vital for solving the question, that is the price charged from each customer. copy or type the information again.

2. question 14., ans B., Direct labor costs are the costs that can be directly identified to product easily or which can be allocated to the product easily, the supervisor salary in the production can also be included in production cost, but some times it may not be identifiable as they may look after different processes of different products.

3.question 15.Ans B it decreases., As the Activity increases the fixed cost per unit decreases, it the activity level is with in normal range. for Example. A room is taken for rent of ($5000) which has capacity for 30 students ( 100% capacity). If the students increases the fixed cost expense per student decreases with every increase in student. Irrespective of students the fixed cost rent will be 5000, when the number of students is between 0 to 30. if students increases the fixed cost per unit will decrease. Ans B it decreases.

4. question 16. Ans C., Total manufacturing costs include all costs like works costs, administrative costs, overhead costs apart from direct costs. when selling and distribution costs are added to the cost of goods it becomes cost of goods sold. the cost of goods manufactured cost of finished goods brought forward., so the amount debited in finished goods account for the period with work in progress is the correct answer.

5. question 17. ans B., For Cost-volume- profit analysis., the four common costs that serve as as the foundation.

1. variable costs remain constant per unit and increases as production increases and vice versa.

2. fixed cost remain constant irrespective of production with in the normal capacity, but as the production increases the fixed cost per unit decreases.

3. mixed costs, or they may be called as semi variable costs, that some part of the cost is variable and other part is fixed.

4. step costs., these are the costs to be incurred when the production is increased beyond the normal capacity . so extra amount of fixed costs has to be incurred.

basing on the behavior patterns of above costs only cost volume profit analysis is made.

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