The grinch who stole christmas poem analysis

If the company uses the absorption costing approach to cost-plus pricing described in the text and desires a 24.5% rate of return on investment (ROI), the required markup on absorption cost for Product A would be closest to:

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17%

24%

12%

15%

13.

TB MC Qu. 05-150 Kilihea Corporation produces a...

Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows:

Kilihea Corporation Income Statement For the month ended July 31

Sales (9,700 units)

$523,800

Cost of goods sold

295,850

Gross margin

227,950

Selling and administrative expenses:

Fixed

116,400

Variable

58,200

174,600

Net operating income

$53,350

During July, the company's variable production costs were $23.50 per unit and its fixed manufacturing overhead totaled $73,400.

Net operating income under the variable costing method for July would be:

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$53,350

$58,850

$47,850

$44,650

14.

TB MC Qu. 10-125 Shelby Boat Wash's cost formula for...

Shelby Boat Wash's cost formula for its cleaning equipment and supplies is $2,940 per month plus $35 per boat. For the month of September, the company planned for activity of 73 boats, but the actual level of activity was 29 boats. The actual cleaning equipment and supplies for the month was $4,010. The activity variance for cleaning equipment and supplies in September would be closest to:

$1,540 F

$1,485 U

$1,540 U

$1,485 F

15.

TB MC Qu. 07-108 The Talbot Corporation makes wheels that it…

The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 270,000 wheels annually are:

Direct materials

$54,000

Direct labor

$81,000

Variable manufacturing overhead

$40,500

Fixed manufacturing overhead

$77,000

An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $32,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $94,900 per year. Direct labor is a variable cost.

If Talbot chooses to buy the wheel from the outside supplier, then annual net operating income would:

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increase by $72,100

increase by $54,000

increase by $86,400

decrease by $8,500

16.

TB MC Qu. 03-76 Puchalla Corporation sells a product for...

Puchalla Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales are 10,614 units. The margin of safety as a percentage of sales is closest to:

rev: 07_14_2016_QC_CS-55471

13%

87%

85%

15%

17.

TB MC Qu. 11-85 Ortman Corporation makes a product...

Ortman Corporation makes a product with the following standard costs:

Standard Quantity or Hours

Standard Price or Rate

Direct materials

6.6

liters

$11.00

per liter

Direct labor

1.0

hours

$16.00

per hour

Variable overhead

1.0

hours

$1.00

per hour