101.If the company cannot cut costs any lower than they already are, what would the profit margin on sales be to meetthe market selling price?
a. 9.3%
b. 7.3%
c. 10.3%
d. 8.3%
102.Target costing is arrived at by taking
a.the selling price minus desired profit
b.the selling price and adding desired profit
c.the selling price and subtracting the budget standard cost
d.the budget standard cost and reducing it by 10%
103.Peyton Company manufactures Phone X and Phone Y. Peyton can sell all it can make of either. Based on thefollowing data, assuming the number of hours is a constraint, which statement is true?
|
X
|
Y
|
Sales price
|
$48
|
$44
|
Variable cost
|
38
|
28
|
|
|
|
Time needed to process
|
5 hours
|
8 hours
|
|
|
|
a.X is more profitable than Y.
b.Y is more profitable than X.
c.Neither X nor Y is profitable.
d.X and Y are equally profitable.
Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32,respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go throughthe same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7hours; and Wales 1 hour.
104.Which product has the highest contribution margin per machine hour?
a.Bales
b.Tales
c.Wales
d.Bales and Tales have the same
105.What is the contribution margin per machine hour for Bales?
a.$5
b.$7
c.$35
d.$28
106.What is the contribution margin per machine hour for Tales?
a.$4
b.$7
c.$28
d.$35
107.What is the contribution per machine hour for Wales?
a. $35
b. $28
c. $17
d.$7
108.Assuming that Widgeon Co. can sell all of the products it can make, what is the maximum contribution margin itcan earn per month?
a. $49,000
b. $70,000
c. $56,000
d. $34,000
109.Assume that Widgeon produced enough product with the highest contribution margin per unit to use 1,000 hours ofmachine time. Product demand does not warrant any more production of that product. What is the maximumadditionalcontribution margin that can be realized by utilizing the remaining 1,000 hours on the product with thesecond highest contribution margin per hour?
a. $35,000
b. $1,400
c. $4,000
d. $28,000
Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overheadactivities—production setup, material handling, and general factory activities. Miramar uses activitybased costingto allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs andactivity bases for these activities:
Activity
|
Cost
|
Activity Base
|
Production setup
|
$250,000
|
Number of setups
|
Material handling
|
150,000
|
Number of parts
|
General overhead
|
80,000
|
Number of direct labor hours
|
Each product’s total activity in each of the three areas are as follows:
|
Product A
|
Product B
|
Number of setups
|
100
|
300
|
Number of parts
|
40,000
|
20,000
|
Number of direct labor hours
|
8,000
|
12,000
|
110.What is the activity rate for production setup?
a.$2,500 per setup
b.$833 per setup
c.$625 per setup
d.$400 per setup