1) Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit $ 800 per unit Fixed costs: Marketing and administrative $ 400,000 per period Manufacturing overhead $ 200,000 per period Variable costs: Marketing and administrative $ 50 per unit Manufacturing overhead $ 80 per unit Direct labor $ 100 per unit Direct materials $ 200 per unitWhat is the total manufacturing cost per unit? a) $380 b) $480 c) $730 d) $430 2) Vegas Company has the following unit costs: Variable manufacturing overhead $ 25 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Variable marketing and administrative 7 Vegas produced and sold 10,000 units. If the product sells for $100, what is the gross margin? a) $170,000 b) $360,000 c) $290,000 d) $240,000 3) Bolka Corporation, a merchandising company, reported the following results for October: Sales $ 413,000 Cost of goods sold (all variable) $ 173,100 Total variable selling expense $ 23,000 Total fixed selling expense $ 19,300 Total variable administrative expense $ 17,400 Total fixed administrative expense $ 31,000 The contribution margin for October is: a) $199,500 b) $239,900 c) $149,200 d) $213,500
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Subject: Cost management & accounting
MCQs:
1) Grover Company has the following data for the production and sale of 2,000 units.
Sales price per unit $ 800 per unit
Fixed costs:
Marketing and administrative $ 400,000 per period
Manufacturing
Variable costs:
Marketing and administrative $ 50 per unit
Manufacturing overhead $ 80 per unit
Direct labor $ 100 per unit
Direct materials $ 200 per unitWhat is the total
a) $380
b) $480
c) $730
d) $430
2) Vegas Company has the following unit costs:
Variable manufacturing overhead $ 25
Direct materials 20
Direct labor 19
Fixed manufacturing overhead 12
Variable marketing and administrative 7 Vegas produced and sold 10,000 units. If the product sells for $100, what is the gross margin?
a) $170,000
b) $360,000
c) $290,000
d) $240,000
3) Bolka Corporation, a merchandising company, reported the following results for October:
Sales $ 413,000
Cost of goods sold (all variable) $ 173,100
Total variable selling expense $ 23,000
Total fixed selling expense $ 19,300
Total variable administrative expense $ 17,400
Total fixed administrative expense $ 31,000
The contribution margin for October is:
a) $199,500
b) $239,900
c) $149,200
d) $213,500
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