Question

52) The Assembly Department of Smart Inc, a manufacturer of computers, had a beginning inventory of 5,000 units. During November, it assembled 2,000 units and transferred them to the Packaging Department. It incurred $250,000 in direct materials and $75,000 in conversion costs. The inventory in November was 3,000 units which were î00% and 60% conglete with espect to materials and conversion costs, respectively. Calculate the total equivalent units of conversion costs for November production for A) 2,000 units B) 1,800 units G) 3,800 units D) 5,000 units 53) The activity-based costing system improves the 53 allocation of A) direct labor C) sales commissions B) indirect manufacturing costs D) direct materials 54) Orlando Avionics makes three types of radios for small aircraft-Model A. Model B, and Model C 54) The manufacturing operations are mechanized and there is no direct labor. Manufacturing overhead costs are significant, and Orlando has adopted an activity-based costing system. Direct materials costs per unit for each model are as follows Model A Model B Model C $28 532 $40 for Orlando has three activities-assembly, materials management, and testing. The cost driver assembly is machine hours. The cost driver for materials management the cost driver for is the number of parts, and testing is the number of units of product. Total costs and production volumes for the year 2015 were estimated as follows: Base 120,000 Machine hours 80,000 Cost Driver $780,000 Assembly Materials management $120,000 Testin Parts $22,500 The Model A radio requires twelve parts to construct, and requires 16 machine hours of processing What is the manufacturing cost to make one unit of Model A? D) $154.50 $132.00 B) $126.50 A) $150.00 55) 55) Moylan Roofing Company has provided the following information: $777,000 Sales Variable expenses Fixed 212,000 Which of the following statements is true, if the sales volume increases by 10%? A) Contribution margin will increase by $77,700. B) Fixed expenses will increase by $21,200 C) Operating income will increase by $6,100. D) Operating income will increase by $27,300. A large drink sells for $1.50 with a variable cost of $0.60. A small drink sells for $1.00 with a variable cost of $0.50. The weighted average contribution margin is: (Round your intermediate calculations and final answer to two decimal places.) 56) Popeye's a local convenience store, sells soft drinks. It sells two large drinks for every small drink. 56) s0.60 per drink. D) $2.30 per drink A) $0.77 per drink. B) $1.15 per drink.

Answer 1

52.

Direct material equivalent units = Units transferred + ending inventory = 2000+3000*100% = 5000 units

Correct answer is D

53.

Activity based costing improves indirect manufacturing cost allocation.

Correct answer is B

54.

		Amount	cost driver	Amount per cost driver
	Assembly	780000	120000	6.5
	Materials management	120000	80000	1.5
	Testing	22500	5000	4.5
	Model A	cost driver	Amount per cost driver	Total
	Direct material	1	28	28
	Assembly	16	6.5	104
	Materials management	12	1.5	18
	Testing	1	4.5	4.5
	Total cost			154.5
	Correct answer is D
		actual	Increase by 10%	Total
55	Sales	777000	77700	854700
Less	Variable cost	504000	50400	554400
	Contribution margin	273000	27300	300300
Less	Fixed expense	212000	0	212000
	Net operating incomem	61000	27300	88300
	Correct answer is D
56		Large drink	Small drink
	Sales	1.5	1
	Variable cost	0.6	0.5
	Contribution margin	0.9	0.5
	For 2 lage drinks and 1 small	1.8	0.5
	Total contribution	2.3	Per drink
	Weighted average	0.77	(2.30/3)
	Correct answer is A