Question : Objective 2.4 1) A unit cost computed by ________. A) multiplying : 1211936

 

Objective 2.4

 

1) A unit cost is computed by ________.

A) multiplying total cost by the number of units produced

B) dividing total cost by the number of units produced

C) dividing variable cost by the number of units produced

D) dividing fixed cost by the number of units produced

 

2) In making product mix and pricing decisions, managers should focus on ________.

A) total costs

B) unit costs

C) variable costs

D) manufacturing costs

 

3) When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 16,000 units are produced, fixed costs will ________.

A) increase to $20 per unit

B) remain at $16 per unit

C) decrease to $10 per unit

D) total $160,000

 

4) When 20,000 units are produced, variable costs are $8 per unit. Therefore, when 10,000 units are produced ________.

A) variable costs will remain at $8 per unit

B) variable costs will total $60,000

C) variable unit costs will increase to $12 per unit

D) variable unit costs will decrease to $3 per unit

5) Eigen Manufacturing Corp. provided the following information for last month:

 

Sales$40,000

Variable costs14,000

Fixed costs10,000

Operating income$16,000

 

If sales reduce to half of the amount in the next month, what is the projected operating income?

A) $15,000

B) $6,000

C) $16,000

D) $3,000

 

6) Genosis Metals provided the following information for last month:

 

Sales$20,000

Variable costs8,000

Fixed costs4,000

Operating income$8,000

 

If sales reduce to half the amount in the next month, what is the projected operating income?

A) $0

B) $4,000

C) $2,000

D) $6,000

7) Grip Manufacturing currently produces 1,000 tires per month. The following per unit data for 1,000 tires apply for sales to regular customers:

 

Direct materials$30

Direct manufacturing labor5

Variable manufacturing overhead8

Fixed manufacturing overhead12

Total manufacturing costs$55

 

The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires. What is the total cost of producing 2,000 tires?

A) $110,000

B) $98,000

C) $68,000

D) $88,000

 

8) XIAN Manufacturing produces a unique valve, and has the capacity to produce 50,000 valves annually. Currently XIAN produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. What is the most likely behavior of total manufacturing costs and unit manufacturing costs given this change?

A) Total manufacturing costs will increase and unit manufacturing costs will stay the same.

B) Total manufacturing costs will increase and unit manufacturing costs will decrease.

C) Total manufacturing costs will stay the same and unit manufacturing costs will stay the same.

D) Total manufacturing costs will increase and unit manufacturing costs will also increase.

9) Ridez Manufacturing currently produces 1,000 bicycles per month. The following per unit data apply for sales to regular customers:

 

Direct materials$50

Direct manufacturing labor8

Variable manufacturing overhead12

Fixed manufacturing overhead15

Total manufacturing costs$85

 

The plant has capacity for 3,000 bicycles and is considering expanding production to 2,000 bicycles. What is the per unit cost of producing 2,000 bicycles?

A) $78.50 per unit

B) $170 per unit

C) $72.50 per unit

D) $77.50 per unit

 

Answer the following questions using the information below:

 

Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:

 

Direct materials$50

Direct manufacturing labor10

Variable manufacturing overhead15

Fixed manufacturing overhead30

Total manufacturing costs$105

 

10) The plant has capacity for 3,000 tables and is considering expanding production to 3,000 tables. What is the total cost of producing 3,000 tables?

A) $255,000

B) $225,000

C) $175,000

D) $235,000