121. Flyer Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost per unit for the product is $44 per unit.
What is the target cost of the company’s product?
A. $44
B. $42
C. $43
D. $40
122. Flyer Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost per unit for the product is $44 per unit.
What is the desired profit per unit?
A. $6
B. $8
C. $5
D. $4
123. If the company meets the new target cost number, how much will they have to cut costs per unit, if any?
A. $1
B. $3
C. $2
D. $3
124. If the company can not cut costs any lower than they already are what would the profit margin on sales be if they meet the market selling price?
A. 9.3%
B. 7.3%
C. 10.3%
D. 8.3%
125. Airflow Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $28 per unit. Airflow management desires a profit equal to a 20% rate of return on invested assets of $1,400,000. They anticipate selling 70,000 units. Their current full cost per unit for the product is $25 per unit.
What is the amount of profit per unit?
A. $1
B. $2
C. $4
D. $8
126. What is the target cost per unit if they meet the market dictated price and management’s desired profit?
A. $28
B. $22
C. $20
D. $24
127. If the company can not cut costs any lower than they already are what would the profit margin on sales be if they meet the market selling price?
A. 15%
B. 12.4%
C. 10.7%
D. 13.2%
128. If the company can not cut costs any lower than they already are what would the rate of return on invested assets be?
A. 15%
B. 10.7%
C. 12.4%
D. 13.2%
129. Miramar Industries manufactures two products, A and B. The manufacturing operating involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity 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
|
|
|
|
What is the activity rate for Production Setup?
A. $2500
B. $833
C. $625
D. $400
130. What is the activity rate for Material Handling?
A. $1.50
B. $3.75
C. $7.50
D. $2.50
131. What is the activity rate for General Overhead?
A. $4.00
B. $60.00
C. $6.67
D. $10.00
132. What is the total overhead allocated to Product A using activity-based Costing?
A. $194,500
B. $162,500
C. $32,000
D. $224,000
133. What is the overhead allocated to Product B using activity-based costing?
A. $135,000
B. $175,000
C. $292,500
D. $285,500