Question

7. Ridley Company estimates that overhead costs for the next year will be $6,870,0o0 for indirect labor and $450,000 for factory utilities. The company uses machine hours as its overhead allocation base. 1fr 160,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? A. S.02186 per machine hour. B. $42.9375 per machine hour. C. $45.75 per machine hour. D. $2.8125 per machine hour. E. S.3555 per machine hour. A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. 8. The contribution margin per unit is: A. $5.00 B. $7.00 C. $8.17 D. $12.00 9. The break-even point in units is: A. 5,158 В. 7,000 C. 8,167 D. 14,000 10. A company manufactures and sells a product for $160 per unit. The company's fixed costs are $110,000 and its variable costs are $112 per unit. What is the company's contribution margin ratio? A. $48 В. $272 С. 30% D. 70% 11. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. What is the break-even point in dollar sales? A. $2,100 B. $6,000 C. $420,000 D. $646,154 E. $1,200,000 dn do of bn dep Direct Method) Honation feomes and so on).

Answer 1

7	Indirect labor	$68,70,000
	Factory utilities	$4,50,000
	Factory Overhead(a)	$73,20,000
	Machine hours(b)	160000	hours
	Plantwide overhead rate(a/b)	$45.75	per machine hours
	So Option C is answer
8	Sales price per unit	$12
	Variable cost per unit	$5
	Contribution margin per unit	$7
	So Option B is answer
9	Fixed costs	$98,000
	Contribution margin per unit	$7
	Breakeven point($98,000/$7)	14000	units
	So Option D is answer
10	Sales price per unit	$160
	Variable cost per unit	$112
	Contribution margin per unit	$48
	Contribution margin ratio($48/$160)	30%
	So Option C is answer
11	Sales price per unit	$200
	Variable cost per unit	$130
	Contribution margin per unit	$70
	Fixed costs	$4,20,000
	Contribution margin ratio($70/$200)	35%
	Break even point in dollars	$12,00,000
	So Option E is answer