Question :
70.Mentor Corp. has provided the following information for the current : 1258604
70.Mentor Corp. has provided the following information for the current year:
Units produced3,500 units
Sale price$200 per unit
Direct materials$70 per unit
Direct labor$55 per unit
Variable manufacturing overhead$20 per unit
Fixed manufacturing overhead$350,000 per year
Variable selling and administrative costs$30 per unit
Fixed selling and administrative costs$150,000 per year
Calculate the unit product cost using variable costing.
A. $245
B. $275
C. $55
D. $145
71.Under absorption costing, a company had the following unit costs when 9,000 units were produced.
Direct labor$7.25 per unit
Direct material$8.00 per unit
Variable overhead$5.50 per unit
Fixed overhead ($67,500/9,000 units) $7.50 per unit
Total production cost$28.25 per unit
Compute the total production cost per unit under absorption costing if 25,000 units had been produced.
A. $28.25
B. $23.45
C. $26.25
D. $20.75
E. $15.25
72.Under absorption costing, a company had the following unit costs when 9,000 units were produced.
Direct labor$7.25 per unit
Direct material$8.00 per unit
Variable overhead$5.50 per unit
Fixed overhead ($67,500/9,000 units) $7.50 per unit
Total production cost$28.25 per unit
Compute the total production cost per unit under variable costing if 30,000 units had been produced.
A. $31.75
B. $28.25
C. $23.45
D. $15.25
E. $20.75
73.Under absorption costing, a company had the following unit costs when 8,000 units were produced.
Direct labor$8.50 per unit
Direct material$9.00 per unit
Variable overhead$6.75 per unit
Fixed overhead ($60,000/8,000 units) $7.50 per unit
Total production cost $31.75 per unit
Compute the total production cost per unit under variable costing if 25,000 units had been produced.
A. $31.75
B. $27.25
C. $26.25
D. $24.25
E. $17.50
74.When evaluating a special order, management should:
A. Only accept the order if the incremental revenue exceeds all product costs.
B. Only accept the order if the incremental revenue exceeds fixed product costs.
C. Only accept the order if the incremental revenue exceeds total variable product costs.
D. Only accept the order if the incremental revenue exceeds full absorption product costs.
E. Only accept the order if the incremental revenue exceeds regular sales revenue.
75.A company is currently operating at 80% capacity producing 5,000 units. Current cost information relating to this production is shown in the table below:
Per Unit
Sales price$34
Direct material$2
Direct labor$3
Variable overhead$4
Fixed overhead$5
The company has been approached by a customer with a request for a 100-unit special order. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits? A. Any amount over $34 per unit.
B. Any amount over $20 per unit.
C. Any amount over $14 per unit.
D. Any amount over $9 per unit.
E. Any amount over $5 per unit.
5,000/.80 – 5,000 = 1,250 unit capacity available$2 + $3 + $4 = $9 incremental costs
76.A company is currently operating at 75% capacity and producing 3,000 units. Current cost information relating to this production is shown in the table below:
Per Unit
Sales price$43
Direct material$7
Direct labor$6
Variable overhead$4
Fixed overhead$4
The company has been approached by a customer with a request for a 200-unit special. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits? A. Any amount over $43 per unit.
B. Any amount over $17 per unit.
C. Any amount over $21 per unit.
D. Any amount over $13 per unit.
E. Any amount over $22 per unit.
3,000/.75 – 3,000 = 1,000 unit capacity remaining$7 + $6 + $4 = $17 incremental costs
77.Geneva Company manufactures bottles that are sold to various customers. The company works at full capacity for half the year to meet peak demand, and operates at 80% capacity for the other half of the year. The following information is provided:
Units produced and sold600,000 units
Selling price$35/unit
Variable manufacturing costs$20/unit
Fixed manufacturing costs$1,200,000/yr.
Variable selling and administrative costs$6/unit
Fixed selling and administrative costs$950,000/yr
Geneva receives a purchase order to make 5,000 dolls as a one-time event. The good news is that this order is during a period when Geneva does have excess capacity. What is the lowest selling price Geneva should accept for this purchase order?
A. $35.00
B. $26.00
C. $29.50
D. $23.50
78.Which of the following best describes costs assigned to the product under the absorption costing method?Direct labor (DL)Direct materials (DM)Variable selling and administrativeVariable manufacturing overheadFixed selling and administrativeFixed manufacturing overhead
A. DL, DM, variable selling and administrative costs, and variable manufacturing overhead.
B. DL, DM, and variable manufacturing overhead.
C. DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.
D. DL and DM.
E. DL, DM, fixed selling and administrative, and fixed manufacturing overhead.
79.Which of the following best describes costs assigned to the product under the variable costing method?Direct labor (DL)Direct materials (DM)Variable selling and administrativeVariable manufacturing overheadFixed selling and administrativeFixed manufacturing overhead
A. DL, DM, variable selling and administrative costs, and variable manufacturing overhead.
B. DL, DM, and variable manufacturing overhead.
C. DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.
D. DL and DM.
E. DL, DM, fixed selling and administrative, and fixed manufacturing overhead.
