1) Aspen company produces widgets. August budgeted production costs are below:
Widgets to be produced 100,000
Direct material (variable) $30,000
Direct labor (variable) 50,000
Supplies (variable) 25,000
Supervision (fixed) 40,000
Depreciation (fixed) 30,000
Other (fixed) 10,000
Total $185,000

In September, Aspen expects to produce 120,000 widgets. Assuming no structural changes,

what is Aspen ’s budgeted production cost per widget for September?

A) $1.72
B) $1.85
C) $1.54
D) $1.95

2) Use cost information in 2) above. In August, the actual direct labor costs were $46,000 and Aspen produced and sold 90,000 widgets. The direct labor performance variance (difference) is?

A) $5,000 unfavorable
B) $5,000 favorable
C) $1,000 unfavorable
D) $1,000 favorable

Below is a performance report that compares budgeted and actual profit of Boyles Beer for the month of April:

Budget Actual Difference

Sales $200,000 $202,000 $2,000 Less:

Cost of ingredients: 162,000 166,000 4,000

Salaries: 31,000 31,200 200

Controllableprofit: $47,000 $44,800 ($2,200)

In evaluating the department in terms of its increases in sales and expenses, what will be most important to investigate?A) Sales B) Cost of ingredients C) Salaries D) All three components have equal importance. 3) Cara’s Pizza produced and sold 1,000 pizzas last month and had total variable ingredients that cost $4,345.If production and sales are expected to increase by 15% next month, which of the following statements is true?A) Total variable materials costs are expected to be $4,779.50B) Variable material cost per unit is expected to be $4.99 C) Total variable materials costs are expected to be $4,345 D) Total variable materials costs are expected to be $4,996.754) Capital Grill has budgeted the following costs for a month in which 2,500 Colby Steak dinners will be produced and sold: Materials, $5,580; hourly labor, $5,400; rent, $1,300; depreciation, $500; and other fixed costs, $1,000. Each Colby Steak dinner sells for $22.00 each. What is the budgeted total variable cost?A) $13,780B) $2,800

C) $10,980

D) $11,480

5)The New Product, Inc is looking to achieve a net income of 15 percent of sales. Here is the firms’s profile: Unit sales price is $10; Variable cost per unit is $ 6; Total fixed costs are $ 50,000. What is the level of sales (in units) required to achieve a net income of 15 percent of sales?

A) 12,000 units

B) 21,000 units

C) 16,000 units

D) 20,000 units

6) One Small Grill Company is a start up firm with the following profile: Unit selling price = $ 230; Variable cost per unit = $ 130; Fixed costs = $ 36,000; and Tax rate = 40%. What number of units should the firm sell to achieve an after tax target income of $ 6,000?

A) 200

B) 460

C) 230

D) 300

7)JingleGym, a best-selling toy, has a selling price of $15. If the contribution margin ratio is 40% and if the fixed costs are $60,000, how many JingleGyms must the company sell for a profit of $450,000?

A) 100,000

B) 30,000

C) 34,000

D) 85,000

E) None of the above

8) After a good 2011, JingleGym decides it needs to increase its sales by 10% in 2012. Which of the following is the most likely to stay the same in 2012:

A) Total Sales Revenue

B) Total Variable Costs

C) Total Fixed Costs

D) Total Contribution Margin

E) Both C as well as D

9) JingleGymApp, a new division of JingleGym will be responsible for creating and selling an app version of the very successful JingleGym. The company expects that the new division will be housed in a separate floor and will pay a rent of $20,000 to JinglyGym. Salaries for the developers and a manager will total $400,000. New computers will cost $300,000 and will be depreciated annually at the rate of 10% of cost. Advertising expenses are expected to be $50,000. The cost of producing an app is negligible at 4% of the selling price but Apple’s appstore charges a 30% commission for each app sold. With this data, JingleGym wants you to estimate the contribution margin (CM) and the break-even point (BEP) in dollars for the new division:

A) There is insufficient data to calculate either value

B) CM=66%; BEP= $757,576

C) CM=34%; BEP= $1,166,667

D) CM=66%; BEP = $1,166,667

E) CM=34%; BEP = $757,576

10) Cook’s Company sells two models of its product. The King sells for $140 and has variable costs of $100. The Queen sells for $80 and has variable costs of $60. Richter typically sells 3 Queen for every King sold. Fixed costs are $250,000. How many Queens will be sold at the break-even point? A) 10,000 B) 7,500 C) 6,500 D) 2,50011) Assume that NBD firm’s bicycle has fixed costs of $101,250. Each unit generates variable costs of $80 and sells for $125.00. What is the break-even point? A) 2,250 units B) 221,250 units C) 1,536 units D) 8,025 units12) The following are production and cost data for two products, X and Y. Product X Product YContribution margin per unit $450 $280Machine set-ups needed per unit 25 14The company can only perform 14,000 set-ups each period yet there is unlimited demand for each product. What is the maximum contribution margin for the year?A) $450,000B) $252,000C) $156,800D) $280,00013) Glendale Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data:Costs:Depreciation $225,000 Utilities 150,000 Wages and Salaries 314,000 ——— Total $689,000 =========Resources are consumed as follows: Activity Cost Pools —————————————————– Assembly Setting Up Other TotalDepreciation 30% 20% 50% 100%Utilities 20% 40% 40% 100%Wages and salaries 40% 45% 15% 100%How much total cost would be allocated to the Assembly cost pool?A) $223,100B) $246,300 C) $347,900D) $215,70014) Koreen Manufacturing Co. has three production departments. Koreen allocates maintenance costs to the departments based on their use of machine hours. The maintenance cost for March was $180,000. The departments useage of labour and machine hours in March were:Department Machine hours Labor hours A 500 3,000 B 500 5,000 C 800 2,000How much maintenance cost should be allocated to the department B for March?A) $50,000 B) $90,000 C) $60,000 D) $64,28515) Santa Company has $27 per unit in variable costs and $1,000,000 per year in fixed costs. Demand is estimated to be 100,000 units annually. What is the price if a markup of 40% on total cost is used to determine the price? A) $27.00 B) $37.80 C) $37.00 D) $51.8016) Sanai manufacturing company produces and sells 40,000 units of a single product. Variable costs total $80,000 and fixed costs total $120,000. If each unit is sold for $8, what markup percentage is the company using? A) 60% B) 160% C) 75% D) 133) A General Motors executive is considering how to price the 2013 Chevy Volt electric car in order to maximize profits for the company. Manufacturing each Volt involves $9,500 of materials, $12,500 of labor, $3,800 of shipping, and $4,000 of other supplies. The Detroit facility where the Volt is manufactured has $12.5 million of fixed costs. The marketing department says that adding a Bose sound system would boost demand, but it would cost an additional $750 per unit.The quantity demanded at each per unit price is as follows:

Demanded Demanded
Price (No Bose) (With Bose)
$29,000 14,000 16,800
$30,000 11,200 13,440
$31,000 8,960 10,752
$32,000 7,168 8,602
$33,000 5,734 6,881
$34,000 4,588 5,505
$35,000 3,670 4,404
$36,000 2,936 3,523
$37,000 2,349 2,819
$38,000 1,879 2,255
$39,000 1,503 1,804
$40,000 1,203 1,443

What profit-maximizing strategy should she choose? A)$34,000 price without Bose sound system. B)$40,000 price with Bose sound system. C) $35,000 price with Bose sound system. D)$32,000 price without Bose sound system.18) Sarker manufacturing company produces and sells 40,000 units of a single product. Variable costs total $80,000 and fixed costs total $120,000. If each unit is sold for $8, what markup percentage is the company using? A. 60% B. 160% C. 75% D. 133% 19) Troto company has total fixed costs of $6,000,000 and total variable cost of $3,000,000 at a volume level of 300,000 units. What price would be charged if the company used cost plus pricing and a markup of 30%? A) $30.00 B) $37.50 C) $39.00 D) $28.00 20) The Mermaid Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand. If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged in order to maximize profits?Units Sold Price 30,000 $10 40,000 $9 50,000 $8 60,000 $7 A) $10 B) $9 C) $8 D) $7