Question :
1) A unit cost computed by:
A) multiplying total cost by : 1217061
1) A unit cost is computed by:
A) multiplying total cost by the number of units
B) dividing total cost by the number of units
C) dividing variable cost by the number of units
D) adding variable cost to fixed cost
2) In making product mix and pricing decisions, managers should focus on:
A) total costs
B) unit costs
C) variable costs
D) fixed costs
3) When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:
A) increase to $32 per unit
B) remain at $16 per unit
C) decrease to $8 per unit
D) total $640,000
4) When 10,000 units are produced, variable costs are $6 per unit. Therefore, when 20,000 units are produced:
A) variable costs will total $120,000
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) Amber Manufacturing provided the following information for last month:
Sales$20,000
Variable costs6,000
Fixed costs9,000
Operating income$5,000
If sales double next month, what is the projected operating income?
A) $10,000
B) $25,000
C) $19,000
D) $12,000
6) Kym Manufacturing provided the following information for last month:
Sales$12,000
Variable costs4,000
Fixed costs1,000
Operating income$7,000
If sales double next month, what is the projected operating income?
A) $14,000
B) $15,000
C) $18,000
D) $19,000
7) Wheel and Tire Manufacturing currently produces 1,000 tires per month. The following per unit data apply for sales to regular customers:
Direct materials$20
Direct manufacturing labor3
Variable manufacturing overhead6
Fixed manufacturing overhead10
Total manufacturing costs$39
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) $39,000
B) $78,000
C) $68,000
D) $62,000
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 stay the same and unit manufacturing costs will decrease.
9) Tire and Spoke Manufacturing currently produces 1,000 bicycles per month. The following per unit data apply for sales to regular customers:
Direct materials$50
Direct manufacturing labor5
Variable manufacturing overhead14
Fixed manufacturing overhead10
Total manufacturing costs$79
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) $79 per unit
B) $158 per unit
C) $74 per unit
D) $134 per unit
Answer the following questions using the information below:
Axle and Wheel Manufacturing currently produces 1,000 axles per month. The following per unit data apply for sales to regular customers:
Direct materials$30
Direct manufacturing labor5
Variable manufacturing overhead10
Fixed manufacturing overhead40
Total manufacturing costs$85
10) The plant has capacity for 3,000 axles and is considering expanding production to 3,000 axles. What is the total cost of producing 3,000 axles?
A) $135,000
B) $225,000
C) $175,000
D) $255,000
