ACCT 2170: Chapters 5 & 6

James Company incurred a total cost of $8,500 to produce 400 units. Each unit required six direct labor hours to complete. What is the total fixed cost if the variable cost was $2.00 per direct labor hour?

• $800

• $7,700

• $3,700

• $8,100

Machine operators $120,000

Factory foreman $60,000

Equipment mechanics $40,000

What is the amount of direct labor?

• $120,000

• $160,000

• $180,000

• $220,000

Which method uses only two data points, which may not be representative of normal conditions?

• Engineering Estimates

• Account Analysis

• Scattergraph

• High-Low Method

Actual manufacturing overhead costs: $ 280,000

Estimated manufacturing overhead costs: $ 260,000

Estimated direct labor hours: 80,000

• $3.50

• $6.75

• $3.25

A causal factor that increases the total cost of a cost object is called

• an engineering estimate.

• a cost driver.

• a regression.

• an outlier.

Which costs are included when calculating product costs? Select all that apply.

• Direct Materials

• Variable Manufacturing Overhead

• Administrative Expenses

• Direct Labor

Which of the following would be classified as variable? Select all that apply.

• Indirect Materials

• Manager Salaries

• Rent

• Indirect Labor

Beginning Balance $43,000

Ending Balance $39,200

Transferred In $117,700

What amount was transferred out?

• $121,500

• $113,900

• $35,500

In the cost equation (TC = F + VX), which letter represents the activity level?

• F

• V

• X

• TC

Units Produced 1

Time 100 hours

Units Produced 2

Time 80 hours

How much time is needed to complete the 4th unit?

• 60 hours

• 64 hours

• 75 hours

• 51.2 hours