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Chapter 567 In class Review Questions w answers

Chapter 567 In class Review Questions w answers - Chapter 5...

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Chapter 5 Review In-Class Sample Exam 1. Carcia Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume ......................... 6,000 units 7,000 units Direct materials .............................. $89.40 per unit $89.40 per unit Direct labor .................................... $11.20 per unit $11.20 per unit Manufacturing overhead ................ $107.70 per unit $95.70 per unit The best estimate of the total cost to manufacture 6,300 units is closest to: B A) $1,274,490 B) $1,287,090 C) $1,312,290 D) $1,236,690 2. A company produces a single product. The following volume and average cost data for two accounting periods have been provided by management: Number of units ............................. 500 800 Direct materials .............................. $2.0 0 $2.00 Direct labor .................................... $1.5 0 $1.50 Manufacturing overhead ................ $2.5 0 $1.75 Other overhead .............................. $1.0 0 $0.625 The best estimate for the cost formula for the total cost of producing and selling the product (where X is the number of units produced and sold in a period) is: D 3. Larson Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost. According to the cost formula, the variable cost per unit of activity is $3 per machine-hour. Total electrical power cost at the high level of activity was $7,600 and at the low level of activity was $7,300. If the high level of activity was 1,200 machine hours, then the low level of activity was: D
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