Reference no: EM132559106

BT&T Corporation manufactures telephones. Recently, the company produced a batch of 530 defective telephones at a cost of $8,300. BT&T can sell these telephones as scrap for $8 each. It can also rework the entire batch at a cost of $5,800, after which the telephones could be sold for $19 per unit.

Question 1: If BT&T reworks the defective telephones, by how much will its operating income change?

A. Decrease by $4,270

B. Increase by $4,270

C. Increase by $5,830

D. Decrease by $4,030

Question 2: During the current year, Jules Company incurred the following product costs:

Direct materials used in production $264,000

Direct labor $129,750

Manufacturing overhead $194,500

Jules Company's beginning Work in Process Inventory was $23,000 and its ending Work in Process Inventory amounted to $31,500. What is the company's cost of finished goods manufactured for the year?

Multiple Choice

A. $611,250.

B. $579,750.

C. $324,250.

D. $596,750.

Question 3: Sherman has budgeted sales for the upcoming quarter as follows:

Units

April 1,850

May 2150

June 2000

The desired ending finished goods inventory for each month is one-half of next month's budgeted sales. Three pounds of direct material are required for each unit produced. If direct material costs $4 per pound, and must be paid for in the month of purchase, the budgeted direct materials purchases (in dollars) for April are:

A$24,000.

B $8,000.

C$24,900.

D. $16,000.

Question 4: Alton Company produces metal belts. During the current month, the company incurred the following product costs:

Raw materials $84,000;

Direct labor $52,000;

Electricity used in the Factory $22,000;

Factory foreperson salary $3,100; and

Maintenance of factory machinery $2,000.

Alton Company's direct product costs totaled:

Multiple Choice

A. $25,100.

B. $27,100.

C. $52,000.

D. $136,000.

Question 5: If unit sales prices are $12 and variable costs are $6 per unit, how many units would have to be sold to break-even if fixed costs equal $12,000?

Multiple Choice

A. 2,000 units

B. 12,000 units

C. 72,000 units

D. 24,000 units

Question 6: A company with monthly revenue of $140,000, variable costs of $55,000, and fixed costs of $42,000 has a contribution margin of:

A. $98,000.

B. $85,000.

C. $42,500.

D. $140,000.

Question 7: Ross Corporation makes all sales on account. The June 30th balance sheet balance in its accounts receivable is $490,000, of which $285,000 pertain to sales that were made during June. Budgeted sales for July are $1,340,000. Ross collects 70% of sales in the month of sale; 20% in the following month; and the final 10% in the second month after the sale.

What are Ross's budgeted collections for July?

Multiple Choice

A. $1,223,000

B. $1,333,000

C. $1,015,500

D. $1,200,000