5) Which of the following costs would be classified as a direct cost for a a dir

Question

5) Which of the following costs would be classified as a direct cost for a a direct cost for a company that produces motorcycles? A) Seats used in the motorcycles B) Rent of manufacturing facility that produces motorcycles Q Wages of motorcycle assembly workers DBoth Seats used in the motorcycles and Wages of motorcycle assembly workers are correct 6) Select the correct statement regarding the selling and administrative (.&A;) expense budget. A) The S&A; budget is prepared before the cash budget. B) The S&A; budget is prepared after the sales budget Q The SRA budget is prepared before the pro forma income statement (DjAll of these answers are correct. SHORT ANSWER Wite the wond or phrase that beet completes each statement or anewers the quetion 7) Based on the information given for a variance, indicate whether the variance is favorable or unfavorable oem to claity Plawbic Cost of direct materials $8,500 Flesible budget Actual Unfavorable? 350 MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 8) Frazier Company sells women's ski jackets. The average sales price is $275 and the variable cost per jacket is $175. Fixed Costs are $1,350,000. If Frazier sells 15,000 jackets, the contribution margin will be: A) $2,775,000 B) $2,250,000 C) $150,000 1,500,000 9) The following information is provided for Southall Company Sales revenue Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs pol 15,000 Fixed selling and administrative costs(ooroun 12,500 S 125,000 2,500 37,500 nalgin What is this company's contribution margin? A)S67,500 B) $45,000 C) $30,000 D) $17,500

Explanation / Answer

9. Sales - variable cost = contribution margin

Sales = 1,25, 000

Variable cost = 57,500

{42,500+ 15,000}

Contribution = 67,500

Correct answer is A) $ 67,500

8. Selling price per jacket = $ 275

Variable cost per jacket = $ 175

Contribution per jacket(Cpj) = $ (275 - 175)=$100

No.of jackets selling (N) = 15000

Then contribution margin = Cpj × N

= $100×1500=$15,00,000

Correct answer is (D)

7 . Actual cost < Budgeted cost then the variance become

favorable .

Budgeted cost of direct material = $ 8,500

( - ) Actual cost of direct material = $ 8,350

_______

Favorable Variance $ 150

________

6. Selling and administration expenses budget is prepared before cash budget , after sales budget & before the pro forma income statement is prepared.

Correct answer is D) all of these answers are correct.

5. Direct costs are traceable to the manufacturing or production of specific goods or services. Correct answer is D). Both seats used in the motorcycles and wages of motorcycle assembly workers are correct .

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