Exam (elaborations) Quiz Submissions - Final Exam Part 1 100% (MGMT640)

Exam (elaborations) Quiz Submissions - Final Exam Part 1 100% (MGMT640) Question 1 1 / 1 point A typical use of managerial accounting is to: help investors and creditors assess the financial position of the company. help management get a clean audit report help the marketing manager decide which product promotion to implement help the SEC decide whether management is in compliance of its policies. Question 2 1 / 1 point Three costs incurred by Pitt Company are summarized below: 1,000 units 2,000 units Cost A $10,000 $15,000 Cost B $21,000 $21,000 Cost C $16,000 $32,000 Which of these costs are variable? A, B, and C A and B A only C only Hide Feedback SOLUTION: Variable costs increase or decrease in proportion to increases or decreases in level of business activity. Cost Per Unit (1,000 Units) Formula Cost t 2,000 Units Formula Cost A $ 10.00 $10,000/1,000 $ 20,000 $10*2,000 Cost B $ 21.00 $21,000/1,000 $ 42,000 $21*2,000 Cost C $ 16.00 $16,000/1,000 $ 32,000 $16*2,000 Question 3 1 / 1 point True or False: Revenues and costs that differ are relevant and should be considered in incremental analysis. True False Question 4 Bellfont Company produces door stoppers. August production costs are below: Door Stoppers produced 78,000 Direct material (variable) $20,000 Direct labor (variable) 40,000 Supplies (variable) 20,000 Supervision (fixed) 27,300 Depreciation (fixed) 24,300 Other (fixed) 5,300 In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont’s production cost per door stopper for September? Answer: 1.6 Hide Feedback 1 / 1 point SOLUTION: 1) Divide variable costs (material, labor, supplies) by the original qty of door stoppers produced to get per unit costs of material, labor, and supplies. (20000+40000+20000)/78000) = 1.02564 2) Multiply per unit costs of material, labor, and supplies by 100,000 for each to arrive at total material, labor, and supply costs. 1.02564 * = 3) Add fixed costs to variable costs to arrive at total costs for 100,000 door stoppers. + 27300 + 24300 + 5300 = 3) Divide total costs by 100,000 to arrive at per unit cost of door stopper. / = 1.59464