29 Jun Question During June, Delta Co. experienced
Question
During June, Delta Co. experienced scrap, normal spoilage, and abnormal spoilage in its manufacturing process. The cost of units produced includes
a. Scrap, but not spoilage
b. Normal spoilage, but neither scrap nor abnormal spoilage
c. Scrap and normal spoilage, but not abnormal spoilage
d. Scrap, normal spoilage, and abnormal spoilage
Cuff Caterers quotes a price of $60 per person for a dinner party. This price includes the 6% sales tax andthe 15% service charge. Sales tax is computed on the food plus the service charge. The service charge is computed on the food only. At what amount does Cuff price the food?
a. $56.40
b. $51.00
c. $49.22
d. $47.40
Bartlett Company is considering a new product, Pear. Bartlett’s fixed costs are $200,000. Pear’s contribution margin is $200 per unit. Bartlett has a marginal tax rate of 25%. How many units of Pear would Bartlett have to sell to have after-tax net income of $1,000,000?
a. 2,250 units
b. 4,750 units
c. 5,000 units
d. 7,667 units
During May, Kern Co. produced and sold 10,000 units of a product. Manufacturing and selling costs incurred during May were as follows:
Direct materials and direct labor $200,000
Variable manufacturing overhead $45,000
Fixed manufacturing overhead $10,000
Variable selling costs $5,000
The product’s unit cost under direct (variable) costing was
a. $24.50
b. $25.00
c. $25.50
d. $26.00
Nonfinancial measures provide information about
A. the economic effect of operations and decisions
B. aspects of operations that cannot be measured in dollars
C. the dollar value of a particular cost containment strategy
D. the operating margin
Why is the evaluation of subunits and subunit managers important?
A. It helps determine whether or not to expand or contract operations.
B. It encourages manager motivation to take actions that maximize the value of the firm.
C. Both a and b.
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