41.Indirect costs are A.costs that are not worth the effort to trace to a specif
ID: 2488627 • Letter: 4
Question
41.Indirect costs are
A.costs that are not worth the effort to trace to a specific cost object.
B.costs that change, in total, indirect proportion to changes in activity levels.
C.always irrelevant
D.costs that remain constant no matter the activity level.
42.Fixed costs are
A.costs that are not worth the effort to trace to a specific cost object.
B.costs that change, in total, in direct proportion to changes in activity levels.
C.always irrelevant.
D.costs that remain constant no matter the activity level.
43.Prime costs are defined as
A.manufacturing costs plus non-manufacturing costs.
B.direct labor plus direct materials.
C.variable costs equal fixed costs.
D.manufacturing overhead plus direct labor
44.Southern Cross sells a product for $50 per unit. Variable costs per unit are $30, and monthly fixed costs are $150,000. Answer the following questions: (6 Points)
a. What is the break-even point in units?
b. What unit sales would be required to earn a target profit of $100,000?
45.Eastern Border had revenues of $900,000 in March. Fixed costs in March were $480,000 and profit was $60,000. Answer the following questions: (6 Points)
a. What was the contribution margin percentage?
b. What monthly sales volume (in dollars) would be needed to break-even?
Explanation / Answer
Q. 41 Indirect costs are
Answer:- Option A. Costs that are not worth the effort to trace to a specific cost object.
Q. 42 Fixed costs are
Answer:- Option D. Costs that remain constant no matter the activity level.
Q. 43 Prime costs are defined as
Answer:- Option B. Direct labor plus Direct materials.
Q. 44
a). Break-even point in units = Fixed costs / Contribution per unit
= 150000 / 50 -30
= 150000 / 20 = 7500 Units
b). Unit sales that would be required to earn a target profit of $100,000:-
Let A denotes number of units to be sold.
50A - 30A = 150000 + 100000
20A = 250000
A = 12500 Units
Conclusion:- Unit sales that would be required to earn a target profit of $100,000 = 12500 Units
Q. 45. Variable costs = Sales - Fixed costs - Profit
= 900000 - 480000 - 60000
= 360000
Contribution = Sales - Variable costs
= 900000 - 360000
= 540000
a) Contribution margin percentage = Contribution / sales * 100
= 540000 / 900000 * 100
= 60%
b) Break-even point (in dollars) = Fixed costs / Contribution margin percentage
= 480000 / 60%
= $ 800000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.