Tampa Bay
The Tampa Bay Lightning captain
Who is: Steve Stamkos
Mosaic Tile Company has estimated the following amounts for its next fiscal year:
Total fixed costs $833,000
Sales price per unit $42
Variable costs per unit $25
What will happen to the breakeven point (in units) if Mosaic can reduce fixed costs by $23,000?
What is: The breakeven point will decrease by 1,353 units
Reduction in fixed costs $23,000
/ CM per unit 17
= 1,353 units
Period costs under the variable costing method include ________.
A. Variable overhead
B. Direct labor
C. Variable selling and administration
D. Fixed selling and administration
C and D both
An important part of budgeting is getting managers and employees to accept the budget so the company can benefit from the ____________________.
A. Control and feedback
B. Variance analysis
C. Budgetary slack
D. Benchmarking
Food that was likely invented in Tampa Bay
What is: Cuban sandwich
Mary Smith, a production supervisor at Verbo, Inc., uses variable costing for any cost control decisions that she has to make. Which of the following is the reason for his choice?
A. Absorption costing is not relevant for long-run decisions.
B. Fixed costs are not relevant in the long run.
C. Lower management usually does not have control over most fixed costs.
D. Only variable costs are controllable in the long and short run.
C. Mary would not have control over fixed costs.
The direct materials budget is prepared using information from the ________ budget.
C. Production
Who is: Salvadore Dali
Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $12 and total fixed costs are $11,750. How many units must be sold to earn income of $2,500?
How many: 750 harmonicas
Fixed costs + Target operating income
/ CM per unit
$11,750 + 2,500 = $14,250
/ 19
= 750 units
Last year, Dixon Company produced 11,400 units and sold 9,400 units. The company had no beginning inventory. Dixon incurred the following costs:
Direct materials per unit $49
Direct labor per unit $15
Variable overhead per unit $16
Total fixed manufacturing overhead $102,600
Total selling and administrative $15,000
Sales Price per unit $130
The cost per unit under absorption costing is _____.
What is: $89
DM $49
DL 15
VOH 16
FOH 9 (102,600 / 11,400 )
= $89
Kwanzan Industries expects to sell 420 units of Product A each day at an average sales price of $18. The expected cost for Product A is 40% of its selling price Kwanzan Industries has no beginning inventory, but it wants to have a five−day supply of ending inventory for the product. Compute the budgeted purchases for the next (seven−day) week.
$36,288
Quantity needed * cost per unit
Quantity needed: 420 units per day * 12 days (one week plus 5 days) = 5,040 units
Cost per unit = $18 * 40% = $7.20
Total purchases $36,288
Current mayor of St. Petersburg
Who is:
Ken Welch
Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis?
A. The sales price per unit changes as volume changes.
B. The only factor that affects total costs is a change in volume.
C. The sales price per unit does not change as volume changes.
D. Total fixed costs do not change.
What is:
A. This is false; the price per unit stays the same as volume changes.
Yazzie, Inc. reports the following information for the year ended December 31:
Units sold 610 units
Variable manufacturing overhead $16 per unit
Fixed manufacturing overhead$25 per unitVariable selling and administrative costs$4 per unit
The operating income calculated using variable costing and absorption costing amounted to $9,500 and $12,500, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year.
1. Absorption costing fixed overhead expense =
FOH /unit = $25 * # units sold 610 = $15,250
2. Variable less absorption income =
$9,500 - $12,500 = $3,000 (variable has more expense)
3. Add together to get variable expense $18,250
From the following details provided by Chambers, Inc., what is the total budgeted manufacturing overhead for the month of January?
Budgeted production in units 20,000
Variable overhead cost per unit $10
Fixed overhead costs:
Depreciation $7,000
Rent $23,000
Direct Labor Hours 11,000
$230,000
Variable OH = 20,000 units * $10/ unit=$200,000
Depreciation 7,000
Rent 23,000
Total $230,000
Viewed as one of the most haunted places in the world
What is: Ybor City
Isabellas, Inc., a local convenience store, sells soft drinks. It sells two large drinks for every small drink. A large drink sells for $2.50 with a variable cost of $0.80. A small drink sells for $1.25 with a variable cost of $0.50. The weighted average contribution margin is ________.
What is: $1.38
CM Large = $2.50 - .80 = $1.70 * 2/3 = 1.13
CM small = $1.25 - .50 = $.75 * 1/3 = .25
Total WACM $1.38
McFarlane, Inc. reports the following information:
Units produced 610 units
Units sold 460 units
Sales price $180 per unit
Direct materials $27 per unit
Direct labor $11 per unit
Variable manufacturing overhead $18 per unit
Fixed manufacturing overhead $16,900 per year
Variable selling and administrative costs $5 per unit
Fixed selling and admin costs $13,900 per year
There are no beginning inventories. What is the ending balance in Finished Goods Inventory using variable costing?
What is: $8,400
# units * cost/unit = Ending inventory
# units = Production - Sales
610 - 460 = 150 units in EI
Cost/unit = DM 27, DL 11, VOH 18 = 56
150 units * $56 per unit = $8,400
Ruby Company, Inc. has the following budgeted sales for the next quarter:
Month: April May June
Units 6,500 6,700 6,800
Inventory of finished goods on hand at the beginning of the quarter is 975 units. The company desires to maintain ending inventory each month equal to 15% of next month's sales plus an additional 100 units. How many units are to be produced during April?
What is: 6,630
Sales + Target ending inventory = Q needed
less: Beg inventory (already have)
= Quantity to be produced
Sales 6,500
TEI 1,105 (May sales 6700 * 15%) = 1,005 plus 100 extra)
less: Beg inv (975)
= Production 6,630