4/18 PAL Session: Chapter 11 and 13

Is the following direct labor, direct materials, manufacturing overhead or period costs for a skateboard company?

A. Sales workers get a $7 commission for each skateboard they sell.

• Direct labor

• Direct Materials

• Manufacturing overhead

• Period costs

B. There are $4 dollars worth of material costs for each skateboard.

• Direct labor

• Direct materials

• Manufacturing overhead

• Period costs

C. Depreciation on the factory is $20,000 a year.

• Direct labor

• Direct materials

• Manufacturing overhead

• Period costs

D. Labor costs of $6 for each skateboard

• Direct Labor

• Direct Materials

• Manufacturing overhead

• Period costs

E. Factory manager receives a yearly salary of $60,000

• Direct labor

• Direct materials

• Manufacturing overhead

• Period costs

F. There is a delivery fee of $5 on each skateboard

• Direct labor

• Direct Materials

• Manufacturing overhead

• Period costs

G. The salary of the sales manager is $55,000 a year.

• Direct labor

• Direct materials

• Manufacturing overhead

• Period costs

A company sells a product with a unit sales price of $14, unit variable costs of $9, and have total fixed costs of $100,000 for the product. What is their breakeven point in units?

• $11,111.11

• $7,142.86

• $4,347.83

• $20,000

A company’s target net income is $340,000. Their product has a selling price per unit of $150, a variable cost per unit of $115 and total fixed costs of $210,000. How many units do they have sell to reach their target net income? Round to the first two decimal places.

• 9,714

• 15,714

• 6,000

• 4,783

A company has a unit contribution margin of $90 and a contribution margin ratio of 45%. What is the unit selling price?

• $50

• $40.5

• $200

• $450