MGA BA03

Introduction to Managerial Accounting

Midterm Test Multiple Choice Prep Material

October 19, 2024

09:00 – 11:00

Mock Instructions:
Please read the instructions on top of the exam paper. Answer all questions in
the text booklet, including multiple choice questions (label each question #
clearly). Return your test paper and booklet when finished. You may use the
back pages of the test paper as scrap paper. If you need more scrap paper,
please ask the invigilators to provide you with some.

Aids Allowed: Calculator

Number of pages: 13
MCQ answers are on the last page

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SUPPLEMENTARY
PREP MATERIAL
1) Which of the following costs is considered a fixed cost?
a) Direct materials
b) Sales commissions
c) Rent for a factory building
d) Production supplies
2) In cost behaviour analysis, which of the following is true about variable costs?
a) They remain constant in total as production levels change.
b) They vary in total with changes in production levels.
c) They are not affected by production levels.
d) They are always considered direct costs.
3) Which of the following is an example of a direct cost?
a) Factory supervisor's salary
b) Depreciation on manufacturing equipment
c) Direct materials used in production
d) Utilities for the factory
4) If a product sells for $50 and has variable costs of $30, what is the contribution margin
per unit?
a) $20
b) $30
c) $50
d) $80
5) The formula for calculating the break-even point in units is:
a) Fixed Costs / Contribution Margin per Unit
b) Fixed Costs / Selling Price per Unit
c) Total Costs / Selling Price per Unit
d) Contribution Margin per Unit / Selling Price per Unit
6) Which of the following best describes the term "relevant range"?
a) The range of production levels where fixed costs vary.
b) The range of production levels where variable costs remain constant.
c) The range of production levels where cost behaviour assumptions are valid.
d) The range of production levels where total costs are minimised.
7) If a company has fixed costs of $200,000 and a contribution margin ratio of 40%, what
is the sales volume required to break even?
a) $500,000
b) $800,000
c) $1,000,000
d) $1,200,000
8) In a job costing system, which of the following costs is typically allocated to each job?
a) Direct materials and direct labour only
b) Direct materials, direct labour, and overhead
c) Only fixed manufacturing costs
d) Only variable manufacturing costs
9) Which of the following statements about mixed costs is true?
a) They contain both fixed and variable components.
b) They are always considered fixed costs.
 c) They are variable costs that do not change with production levels.
d) They are only relevant in the long run.
10) If a company has a selling price of $25, variable costs of $10, and fixed costs of
$100,000, how many units need to be sold to achieve a profit of $50,000?
a) 6,000 units
b) 8,000 units
c) 10,000 units
d) 12,000 units
11) Which of the following is a characteristic of job costing?
a) It is used for mass production of identical products.
b) It accumulates costs for each individual job or order.
c) It does not track direct materials or direct labour.
d) It is only applicable to service industries.
12) What is the primary purpose of cost estimation?
a) To determine the selling price of a product
b) To set budgets and control costs
c) To allocate overhead costs
d) To calculate taxes owed
13) If a company’s total fixed costs are $300,000 and the contribution margin per unit is
$15, how many units must be sold to break even?
a) 15,000 units
b) 20,000 units
c) 25,000 units
d) 30,000 units
14) In cost-volume-profit analysis, which of the following is assumed to be constant?
a) Total costs
b) Selling price per unit
c) Variable costs per unit
d) Both b and c
15) If a job requires $2,000 in direct materials, $1,500 in direct labour, and $500 in applied
overhead, what is the total cost of the job?
a) $3,000
b) $4,000
c) $2,500
d) $4,500
16) Which of the following would be considered a sunk cost?
a) The cost of materials purchased for a project
b) The salary of a worker currently employed
c) The cost of a machine purchased last year
d) The cost of utilities for the current month
17) If a company has a contribution margin ratio of 30% and fixed costs of $120,000, what
is the sales volume required to break even?
a) $300,000
b) $400,000
c) $500,000
d) $600,000
18) Which of the following is NOT a component of total manufacturing costs in job costing?
a) Direct materials
b) Direct labour
c) Selling and administrative expenses
d) Applied overhead
19) In cost behaviour analysis, which term refers to costs that remain unchanged regardless
of the level of production?
a) Variable costs
b) Fixed costs
c) Mixed costs
d) Step costs
20) When calculating the total cost for a job, which of the following costs is typically NOT
included?
a) Direct materials
b) Selling expenses
c) Allocated overhead
d) Marketing expenses
21) Which of the following is a characteristic of variable costs?
a) They do not change with production levels.
b) They vary in total as the level of activity changes.
c) They are always direct costs.
d) They are incurred only when production is at full capacity.
22) If a company sells a product for $80 and incurs variable costs of $50, what is the
contribution margin ratio?
a) 37.5%
b) 40%
c) 50%
d) 62.5%
23) In job costing, which of the following is typically allocated based on the number
of direct labour hours worked?
a) Direct materials
b) Direct labour
c) Overhead
d) Selling expenses
24) If a company has total fixed costs of $250,000 and a contribution margin per unit
of $25, how many units must be sold to earn a profit of $75,000?
a) 10,000 units
b) 15,000 units
c) 12,500 units
d) 13,000 units
25) Which of the following statements about direct costs is true?
a) They cannot be traced directly to a specific cost object.
b) They are always fixed costs.
c) They can be easily identified with a specific product or service.
d) They are incurred only in manufacturing.
26) What is the primary purpose of conducting a cost-volume-profit analysis?
a) To determine the selling price of a product
b) To assess the financial performance of a company
c) To evaluate the impact of changes in costs and volume on profits
d) To prepare the budget for the upcoming period
27) If a company has a selling price of $100, variable costs of $60, and fixed costs of
$200,000, what is the break-even point in sales dollars?
a) $500,000
b) $600,000
c) $400,000
d) $300,000
28) In a job costing system, how is overhead typically allocated to jobs?
a) Based on the number of units produced
b) Based on direct labour hours or machine hours
c) Based on total sales
d) Based on fixed costs
29) Which of the following would be classified as a period cost?
a) Direct materials used in production
b) Factory rent
c) Advertising expenses
d) Direct labour
30) If a company incurs $150,000 in fixed costs and has a contribution margin ratio
of 20%, what is the required sales volume to break even?
a) $300,000
b) $750,000
c) $600,000
d) $150,000
31) Which of the following costs would typically be considered a sunk cost?
a) Cost of raw materials purchased for production
b) Cost of machinery purchased last year
c) Cost of utilities for the current month
d) Salaries for employees working on a current project
32) If a company’s contribution margin is $200,000 and fixed costs are $150,000,
what is the net income?
a) $50,000
b) $150,000
c) $200,000
d) $350,000
33) In cost behaviour analysis, which of the following describes a step cost?
a) Costs that remain fixed over a wide range of activity
b) Costs that increase in a linear manner with production
c) Costs that remain constant until a certain level of activity is reached, then increase
d) Costs that vary directly with production levels
34) If a company has a selling price of $30, variable costs of $15, and fixed costs of
$120,000, how many units must be sold to achieve a profit of $30,000?
a) 10,000 units
 b) 15,000 units
c) 12,000 units
d) 8,000 units
35) Which of the following is true regarding job costing?
a) It is used for products that are mass-produced.
b) It accumulates costs for each specific job or order.
c) It does not consider direct labour costs.
d) It is only applicable to manufacturing companies.
36) What is the formula for calculating the total cost of a job in job costing?
a) Direct materials + Direct labour + Selling expenses
b) Direct materials + Direct labour + Allocated overhead
c) Direct materials + Fixed costs + Variable costs
d) Direct labour + Selling expenses + Marketing costs
37) If a company expects to produce 10,000 units and incurs total costs of $500,000,
what is the average cost per unit?
a) $50
b) $100
c) $25
d) $75
38) In a cost-volume-profit graph, the point where total revenue and total costs
intersect is known as the:
a) Profit point
b) Loss point
c) Break-even point
d) Contribution margin point
39) Which of the following is NOT a characteristic of fixed costs?
a) They remain constant in total regardless of production levels.
b) They can be variable in the long run.
c) They are incurred even when production is zero.
d) They vary directly with the level of production.
40) If a company has a direct labour cost of $20,000 and applies overhead at a rate of
150% of direct labour cost, what is the total manufacturing cost?
a) $50,000
b) $20,000
c) $30,000
d) $80,000
41) A company has a selling price of $100 and variable costs of $60. What is the
contribution margin per unit?
a) $40
b) $60
c) $100
d) $20
42) If a company has fixed costs of $150,000 and a contribution margin per unit of
$25, how many units must be sold to achieve a profit of $75,000?
a) 9,000 units
b) 6,000 units
 c) 12,000 units
d) 15,000 units
43) A mixed cost consists of a fixed component of $12,000 and a variable component
of $4 per unit. What will be the total cost if 2,000 units are produced?
a) $20,000
b) $24,000
c) $28,000
d) $32,000
44) In a job costing system, if Job B incurs $2,000 in direct materials, $1,500 in direct
labour, and $700 in applied overhead, what is the total cost of Job B?
a) $4,200
b) $4,000
c) $3,500
d) $3,200
45) If a product has a selling price of $40 and variable costs of $28, what is the
contribution margin ratio?
a) 37.5%
b) 43.75%
c) 30%
d) 62.5%
46) If the break-even point in sales dollars is $300,000 and the contribution margin
ratio is 40%, what are the fixed costs?
a) $120,000
b) $180,000
c) $240,000
d) $300,000
47) If a company has a total fixed cost of $200,000 and a contribution margin of $50
per unit, how many units must be sold to break even?
a) 3,000 units
b) 4,000 units
c) 5,000 units
d) 6,000 units
48) A company has a direct labour cost of $30,000 and applies overhead at a rate of
120% of direct labour cost. What is the total manufacturing overhead cost?
a) $36,000
b) $54,000
c) $66,000
d) $72,000
49) If a company has a contribution margin ratio of 25% and total sales of $400,000,
what are the total variable costs?
a) $100,000
b) $200,000
c) $300,000
d) $400,000
50) If a company sells 10,000 units at a selling price of $15 per unit and incurs total
variable costs of $40,000 and total fixed costs of $80,000, what is the break-even
 point?
a) 5152.5252
b) 7172.2727
c) 7272.7272
d) 5272.2727
51) If a company has actual sales of $600,000 and a break-even sales level of
$500,000, what is the margin of safety?
a) $50,000
b) $100,000
c) $150,000
d) $200,000
52) Which of the following costs would be classified as a direct cost?
a) Factory supervisor's salary
b) Depreciation on manufacturing equipment
c) Direct materials used in production
d) Utilities for the factory
53) If a company incurs $100,000 in fixed costs and has a contribution margin ratio
of 40%, what is the sales volume required to break even?
a) $200,000
b) $300,000
c) $250,000
d) $500,000
54) In a job costing system, which of the following is true regarding overhead costs?
a) They are not allocated to individual jobs.
b) They are applied based on a predetermined rate.
c) They are considered fixed costs only.
d) They are the same for every job.
55) If a product has a selling price of $75 and variable costs of $45, what is the
contribution margin per unit?
a) $20
b) $30
c) $40
d) $50
56) If a company has fixed costs of $250,000 and sells its product for $50 with
variable costs of $30, how many units must it sell to achieve a profit of $50,000?
a) 10,000 units
b) 12,500 units
c) 15,000 units
d) 20,000 units
57) In a cost-volume-profit graph, the slope of the total revenue line represents:
a) Fixed costs
b) Contribution margin per unit
c) Total costs
d) Variable costs
58) A company has a selling price of $150 per unit and variable costs of $90 per unit.
If fixed costs are $300,000, what is the break-even point in units?
 a) 2,000 units
b) 1,500 units
c) 3,000 units
d) 5,000 units
59) If a product has a contribution margin of $40 per unit and the company wants to
achieve a profit of $200,000, how many units must be sold if fixed costs are
$100,000?
a) 5,000 units
b) 7,500 units
c) 10,000 units
d) 12,500 units
60) A company has fixed costs of $250,000 and a contribution margin ratio of 20%.
What is the sales volume required to break even?
a) $1,000,000
b) $1,250,000
c) $1,500,000
d) $2,000,000
61) If a company sells a product for $60 and has variable costs of $36, what is the
contribution margin ratio?
a) 40%
b) 60%
c) 50%
d) 30%
62) A job costing system indicates that Job C incurred $15,000 for direct materials,
$10,000 for direct labour, and $5,000 for applied overhead. What is the total cost
of Job C?
a) $30,000
b) $25,000
c) $20,000
d) $15,000
63) If a company has total sales of $500,000 and variable costs of $350,000, what is
the contribution margin?
a) $150,000
b) $200,000
c) $350,000
d) $500,000
64) A company has a selling price of $80, variable costs of $50, and fixed costs of
$120,000. What is the break-even point in units?
a) 3,000 units
b) 2,400 units
c) 4,000 units
d) 1,500 units
65) If a company incurs $200,000 in fixed costs and has a contribution margin of $25
per unit, how many units must be sold to achieve a profit of $50,000?
a) 10,000 units
b) 12,000 units
 c) 8,000 units
d) 6,000 units
66) If a product has a selling price of $45 and a contribution margin ratio of 30%,
what are the variable costs per unit?
a) $31.50
b) $30
c) $35
d) $40.50
67) A company has actual sales of $400,000 and a break-even sales level of $300,000.
What is the margin of safety in dollars?
a) $100,000
b) $200,000
c) $300,000
d) $400,000
68) If a job incurs $5,000 in direct materials, $3,000 in direct labour, and $2,000 in
overhead, what is the total cost of the job?
a) $8,000
b) $10,000
c) $7,000
d) $9,000
69) If a company has a variable cost ratio of 40% and total sales of $500,000, what
are the total variable costs?
a) $200,000
b) $250,000
c) $300,000
d) $400,000
70) If a company’s actual overhead costs are $180,000 and it has overapplied
overhead of $20,000, what is the applied overhead?
a) $200,000
b) $160,000
c) $180,000
d) $220,000
71) A company has a contribution margin of $60 per unit and sells 1,500 units. What
is the total contribution margin?
a) $90,000
b) $100,000
c) $80,000
d) $70,000
72) If a company has fixed costs of $120,000 and a contribution margin ratio of 25%,
what is the required sales volume to break even?
a) $400,000
b) $480,000
c) $600,000
d) $800,000
73) If a company has a selling price of $70 and variable costs of $42, what is the
contribution margin per unit?
 a) $28
b) $30
c) $32
d) $38
74) If a company sells a product for $100 and has fixed costs of $250,000 with a
contribution margin of $40 per unit, how many units must be sold to break even?
a) 6,250 units
b) 5,000 units
c) 7,500 units
d) 8,000 units
75) If a company has a total sale of $300,000 and a variable cost ratio of 70%, what is
the contribution margin in dollars?
a) $90,000
b) $60,000
c) $150,000
d) $30,000
76) If a company has fixed costs of $180,000 and wants to achieve a profit of $60,000
with a contribution margin of $30 per unit, how many units must it sell?
a) 8,000 units
b) 12,000 units
c) 10,000 units
d) 14,000 units
77) A company’s fixed costs are $500,000, and its contribution margin per unit is $75.
If the company wants to achieve a target profit of $225,000, how many units must
it sell?
a) 9,600 units
b) 10,000 units
c) 10,500 units
d) 11,000 units
78) A product sells for $120, and its variable costs are $80. If the company has fixed
costs of $400,000, what is the margin of safety in dollars when sales are
$1,500,000?
a) $300,000
b) $200,000
c) $150,000
d) $250,000
79) If a company has a contribution margin ratio of 40% and fixed costs of $200,000,
what is the required sales revenue to break even?
a) $400,000
b) $500,000
c) $600,000
d) $700,000
80) A job costing system shows that Job F incurred $15,000 for direct materials,
$10,000 for direct labour, and $4,500 for applied overhead. If the company has a
markup rate of 20% on total job costs, what is the selling price of Job F?
a) $30,600
 b) $28,500
c) $35,400
d) $32,700
81) A company has fixed costs of $300,000 and total sales of $600,000. If it wants to
achieve a net income of $100,000, what is the required contribution margin?
a) $400,000
b) $500,000
c) $600,000
d) $700,000
82) If a company’s fixed costs are $250,000 and its contribution margin per unit is
$50, how many units must be sold to achieve a profit of $100,000?
a) 7,000 units
b) 8,000 units
c) 9,000 units
d) 10,000 units
83) A company has a selling price of $200, variable costs of $120, and fixed costs of
$300,000. What is the break-even point in units?
a) 3,000 units
b) 2,500 units
c) 3,750 units
d) 1,500 units
84) If a company has a contribution margin of $150,000 and fixed costs of $90,000,
what is the degree of operating leverage at the current sales level?
a) 1.67
b) 1.50
c) 1.75
d) 2.50
85) A company incurs $45,000 in direct materials, $30,000 in direct labour, and
$15,000 in overhead for Job G. If the company applies overhead at a rate of 50%
of direct labour costs, what is the total cost of Job G?
a) $90,000
b) $75,000
c) $60,000
d) $55,000
86) If a product has a selling price of $150, variable costs of $90, and fixed costs of
$180,000, what is the contribution margin ratio?
a) 40%
b) 50%
c) 60%
d) 70%
87) A company has a variable cost ratio of 60%. If total sales are $500,000, what is
the contribution margin in dollars?
a) $200,000
b) $300,000
c) $400,000
d) $500,000
88) If a company has a selling price of $70, variable costs of $42, and fixed costs of
$210,000, what is the break-even point in sales dollars?
a) $300,000
b) $350,000
c) $400,000
d) $525,000
89) A job costing system shows that Job H incurred $8,000 in direct materials, $5,000
in direct labour, and $3,000 in applied overhead. If the company has a markup
rate of 25%, what is the selling price of Job H?
a) $16,250
b) $20,000
c) $14,000
d) $13,000
90) If a company has total sales of $800,000 and total variable costs of $480,000, what
is the contribution margin ratio?
a) 40%
b) 50%
c) 60%
d) 70%
91) If a company has fixed costs of $150,000 and a contribution margin of $25 per
unit, how many units must it sell to achieve a profit of $75,000?
a) 9,000 units
b) 6,000 units
c) 12,000 units
d) 15,000 units
92) A company has a direct labour cost of $60,000 and applies overhead at a rate of
150% of direct labour cost. What is the total manufacturing cost if direct
materials are $40,000?
a) $130,000
b) $150,000
c) $180,000
d) $190,000
93) If a job incurs $10,000 in direct materials, $6,000 in direct labour, and $4,000 in
overhead, what is the total cost of the job?
a) $18,000
b) $20,000
c) $22,000
d) $24,000
94) If a company has a selling price of $90, variable costs of $54, and fixed costs of
$180,000, what is the break-even point in units?
a) 3,000 units
b) 2,500 units
c) 5,000 units
d) 1,500 units
95) A company has a contribution margin of $500,000 and fixed costs of $350,000.
What is the net income?
 a) $250,000
b) $200,000
c) $150,000
d) $300,000
96) If a company’s variable cost ratio is 75% and it has total sales of $300,000, what
is the contribution margin in dollars?
a) $75,000
b) $100,000
c) $150,000
d) $225,000
97) Explain how cost behaviour analysis can help in making strategic decisions for a
company planning to enter a new market.
a) By predicting future profits
b) By understanding variable and fixed costs
c) By analysing customer behaviour
d) By identifying market trends
98) Explain how mixed costs are analysed using the high-low method.
a) Using average costs
b) By taking the highest and lowest activity levels
c) By plotting cost functions
d) By linear regression analysis
99) Given the sales mix for a company that sells products A and B is 60% and 40%
respectively, calculate the weighted average contribution margin if the contribution
margin for A is $50 and for B is $30.
a) $45
b) $40
c) $35
d) $30
100) A company has fixed costs of $500,000 and sells two products, X and Y. If the
contribution margin ratio is 35% for X and 50% for Y, and the sales mix is 70% X and
30% Y, what is the break-even point in dollars (choose the closest figure)?
a) $1,200,000
b) $1,000,000
c) $1,400,000
d) $1,500,000
101) Discuss how regression analysis can be used for cost estimation
a) By plotting scatter plots
b) By determining cost behaviour patterns
c) By using historical data
d) All of the above
102) If a company wants to achieve a 25% increase in net income next year, how should it
adjust its sales volume, given the current contribution margin ratio is 40% and fixed
costs are unchanged?
a) Increase sales by 62.5%
b) Increase sales by 25%
c) Increase sales by 40%
 d) Increase sales by 50%
103) A manufacturing company uses job costing for custom orders. Explain how the
company should treat indirect costs.
a) Directly allocate to jobs
b) Use a predetermined overhead rate
c) Ignore indirect costs
d) Allocate based on material costs
104) Degree of operating leverage involves what components
a) Contribution margin / Net operating income
b) Variable costs / Fixed costs
c) Total sales / Fixed costs
d) Net profit / Contribution margin
105) A company applies overhead based on direct labour hours. If the estimated
overhead is $600,000 and the estimated direct labour hours are 30,000, what is the
overhead rate per direct labour hour?
a) $20/hr
b) $15/hr
c) $25/hr
d) $30/hr
106) A company incurs total fixed costs of $240,000 and sells three products with the
following contribution margins per unit: Product A - $12, Product B - $18, Product C -
$25. The sales mix is 40% A, 30% B, and 30% C. What is the break-even point in total
units (choose the closest answer)?
a) 8,000 units
b) 10,000 units
c) 14,000 units
d) 13,000 units
107) If a company incurs total fixed costs of $180,000 and sells three products with the
following contribution margins per unit: Product A - $10, Product B - $15, Product C -
$20. The sales mix is 30% A, 50% B, and 20% C. What is the break-even point in total
units (choose the closest answer)?
a) 14,000 units
b) 12,400 units
c) 12,300 units
d) 12,000 units
108) A firm uses a flexible budget to adjust for changes in activity levels. If the firm's
budgeted fixed costs are $250,000 and variable costs are $8 per unit, what is the total
cost at an activity level of 15,000 units?
a) $120,000
b) $370,000
c) $380,000
d) $450,000
109) A company's fixed costs are $360,000, and the variable cost per unit is $30. If the
selling price per unit is $50, what is the break-even point in units?
a) 15,000 units
b) 18,000 units
 c) 12,000 units
d) 20,000 units
110) A company's fixed costs are $400,000, and the variable cost per unit is $25. If the
selling price per unit is $50, what is the break-even point in units?
a) 10,000 units
b) 12,000 units
c) 14,000 units
d) 16,000 units
111) Explain the impact of changes in variable costs on the break-even point of a compan
y.
a) Increased variable costs decrease the break-even point
b) Decreased variable costs increase the break-even point
c) Increased variable costs increase the break-even point
d) Changes in variable costs have no impact on the break-even point
112) A company has sales of $500,000, variable costs of $300,000, and fixed costs of
$150,000. Calculate the margin of safety in dollars.
a) $50,000
b) $100,000
c) $150,000
d) $125,000
113) A company has fixed costs of $500,000, a selling price of $100 per unit, and variable
costs of $60 per unit. If the company wants to achieve a target profit of $100,000, how
many units must it sell?
a) 10,000 units
b) 12,000 units
c) 15,000 units
d) 20,000 units
114) Discuss the impact of changes in fixed and variable costs on the operating leverage
of a company.
a) Increased fixed costs increase operating leverage
b) Decreased fixed costs increase operating leverage
c) Increased variable costs increase operating leverage
d) Changes in fixed and variable costs have no impact on operating leverage
115) A company's budgeted overhead is $750,000, and the estimated direct labour hours
are 50,000. What is the predetermined overhead rate? If Job K used 600 direct labour
hours, how much overhead should be applied to Job K?
a) $10/hr, $6,000
b) $15/hr, $9,000
c) $12/hr, $7,200
d) $20/hr, $12,000
116) In a job costing system, Job S incurred $5,000 in direct materials, $4,000 in direct
labour, and applied overhead based on 200 machine hours. If the predetermined
overhead rate is $25 per machine hour, what is the total cost of Job S? What would be
the impact on the total cost if the actual overhead rate turned out to be $28 per machine
hour?
a) $10,000 and $10,600
 b) $12,000 and $12,600
c) $14,000 and $14,600
d) $16,000 and $16,600
117) A company uses job costing and has estimated overhead of $1,200,000 for the year.
If the company plans to use 60,000 direct labour hours, what is the predetermined
overhead rate? If Job T used 800 direct labour hours, how much overhead should be
applied to Job T? Calculate the total cost of Job T if it incurred $5,500 in direct
materials and $4,000 in direct labour.
a) $20/hr, $16,000, $25,500
b) $15/hr, $12,000, $21,500
c) $25/hr, $20,000, $29,500
d) $30/hr, $24,000, $33,500
118) Job U incurred $7,500 for direct materials, $6,000 for direct labour, and used 300
machine hours. The company applies overhead at a rate of $40 per machine hour.
Calculate the total cost of Job U. How would the total cost change if the actual number
of machine hours used was 350 instead of 300?
a) $25,500 and $27,500
b) $18,000 and $20,000
c) $25,000 and $27,000
d) $22,500 and $24,500
119) A company's budgeted overhead is $750,000, and the estimated direct labour hours
are 50,000. What is the predetermined overhead rate? If Job K used 600 direct labour
hours, how much overhead should be applied to Job K?
a) $10/hr, $6,000
b) $15/hr, $9,000
c) $12/hr, $7,200
d) $20/hr, $12,000
120) A company has fixed costs of $350,000, a selling price of $80 per unit, and variable c
osts of $50 per unit. If the company wants to achieve a target profit of $150,000, how ma
ny units must it sell to reach its goal? Also, calculate the break-even point in units.
a) 10,000 units, 7,500 units
b) 11,667 units, 10,000 units
c) 12,000 units, 11,000 units
d) 16,667 units, 8,750 units
 Multiple-choice answers
44. A 88. D
1. C 45. C 89. B
2. B 46. A 90. A
3. C 47. B 91. A
4. A 48. A 92. D
5. A 49. C 93. B
6. C 50. C 94. C
7. A 51. B 95. C
8. B 52. C 96. A
9. A 53. C 97. B
10. C 54. B 98. B
11. B 55. B 99. B
12. B 56. C 100. A
13. B 57. B 101. D
14. D 58. D 102. A
15. B 59. B 103. B
16. C 60. B 104. A
17. B 61. A 105. A
18. C 62. A 106. C
19. B 63. A 107. B
20. D 64. C 108. B
21. B 65. A 109. B
22. A 66. A 110. D
23. C 67. A 111. C
24. D 68. B 112. D
25. C 69. A 113. C
26. C 70. A 114. A
27. A 71. A 115. B
28. B 72. B 116. C
29. C 73. A 117. A
30. B 74. A 118. A
31. B 75. A 119. B
32. A 76. A 120. B
33. C 77. A
34. A 78. A
35. B 79. B
36. B 80. C
37. A 81. A
38. C 82. A
39. D 83. C
40. A 84. D
41. A
42. A 85. A
86. A
43. A 87. A