Chapter 2

Use the following to answer questions 96-99:

The following data (in thousands of dollars) have been taken from the accounting records of
Karsten Corporation for the just completed year.
Sales ...................................................................... $990
Raw materials inventory, beginning ..................... $70
Raw materials inventory, ending ........................... $30
Purchases of raw materials .................................... $100
Direct labor ............................................................ $200
Manufacturing overhead ....................................... $160
Administrative expenses ....................................... $180
Selling expenses .................................................... $150
Work in process inventory, beginning .................. $40
Work in process inventory, ending ....................... $70
Finished goods inventory, beginning .................... $150
Finished goods inventory, ending ......................... $130
Use these data to answer the following series of questions.
96. The cost of the raw materials used in production during the year (in thousands of dollars)
was:
A) $130
B) $170
C) $140
D) $60
Level: Medium LO: 2,3,4
97. The cost of goods manufactured (finished) for the year (in thousands of dollars) was:
A) $530
B) $540
C) $470
D) $570
Level: Medium LO: 2,3,4
98. The cost of goods sold for the year (in thousands of dollars) was:
A) $490
B) $450
C) $620
D) $600
Level: Medium LO: 2,3,4
99. The net operating income for the year (in thousands of dollars) was:
A) $170
B) $140
C) $500
D) $200
Level: Medium LO: 2,3,4
Use the following to answer questions 100-103:
The following data (in thousands of dollars) have been taken from the accounting records
of Karstone Corporation for the just completed year.
Sales ......................................................................... $880
Raw materials inventory, beginning ........................ $20
Raw materials inventory, ending .............................. $30
Purchases of raw materials ....................................... $150
Direct labor ............................................................... $180
Manufacturing overhead .......................................... $230
Administrative expenses .......................................... $100
Selling expenses ....................................................... $130
Work in process inventory, beginning ..................... $80
Work in process inventory, ending .......................... $30
Finished goods inventory, beginning ....................... $120
Finished goods inventory, ending ............................ $100
Use these data to answer the following series of questions.
100. The cost of the raw materials used in production during the year (in thousands of
dollars) was:
 A) $180
B) $140
C) $160
D) $170
Level: Medium LO: 2,3,4
101. The cost of goods manufactured (finished) for the year (in thousands of dollars) was:
A) $580
B) $600
C) $500
D) $630
Level: Medium LO: 2,3,4
102. The cost of goods sold for the year (in thousands of dollars) was:
A) $620
B) $580
C) $720
D) $700
Level: Medium LO: 2,3,4
103. The net operating income for the year (in thousands of dollars) was:
A) $260
B) $30
C) $90
D) ($30)
Level: Medium LO: 2,3,4
Use the following to answer questions 104-105:
The manufacturing operations of QC Company had the following inventory balances for the
month of March:
Inventories March 1 March 31
 Raw materials .................... $10,000 $12,000
Work in process ................. $6,000 $7,000
Finished goods .................. $30,000 $22,000
104. If the company purchased $18,000 of raw materials during March, what was the cost
of raw materials used in production?
A) $16,000
B) $20,000
C) $41,000
D) $19,000
Level: Medium LO: 4
105. If the company transferred $38,000 of completed goods from work in process to
finished goods during March, what was the amount of the cost of goods sold?
A) $38,000 B) $43,000 C) $30,000 D) $46,000
Level: Medium LO: 3
Use the following to answer questions 106-107:
Servix, Inc., produces water pumps. Each water pump contains a small valve that costs $5.
During May, 600 valves were drawn from the supply room and installed in water pumps in
the production process. Eighty percent of these units were completed and transferred into
finished goods warehouses. Of the units completed, thirty percent were still unsold at the
end of the month. There were no beginning inventories.
106. The cost of valves in work in process at the end of May would be:
A) $2,400 B) $3,000 C) $600 D) $720
Level: Easy LO: 4
107. The cost of valves in cost of goods sold for May would be:
A) $1,680 B) $2,100 C) $900 D) $720
Level: Easy LO: 3
Use the following to answer questions 108-109:
The manufacturing operations of Jones Company had the following inventory balances for
the month of March:
 Inventories March 1 March 31
Raw materials .................... $12,000 $14,000
Work in process ................. $8,000 $9,000
Finished goods .................. $32,000 $25,000
108. If the company purchased $20,000 of raw materials during March, what was the cost
of raw materials used in production?
A) $24,000 B) $22,000 C) $32,000 D) $18,000
Level: Medium LO: 4
109. If the company transferred $40,000 of completed goods from work in process to
finished goods during March, what was the amount of the cost of goods sold?
A) $47,000 B) $40,000 C) $33,000 D) $44,000
Level: Medium LO: 4
Use the following to answer questions 110-111:
At a sales volume of 30,000 units, Carne Company's total fixed costs are $30,000 and total
variable costs are $45,000. The relevant range is 20,000 to 40,000 units.
110. If Carne Company were to sell 32,000 units, the total expected cost would be:
A) $75,000 B) $78,000 C) $80,000 D) $77,000
Level: Easy LO: 5
111. If Carne Company were to sell 40,000 units, the total expected cost per unit would be:
A) $2.50 B) $2.25 C) $2.13 D) $1.88
Level: Easy LO: 5

Chapter 3

Use the following to answer questions 57-60:

The accounting records of Omar Company contained the following information for last year:
Beginning Ending
Direct materials inventory ......................... $9,000 $7,000
Work in process inventory ........................ $17,000 $31,000
Finished goods inventory .......................... $10,000 $15,000
Manufacturing costs incurred:
Direct materials used ................................. $72,000
Overhead applied ...................................... $24,000
Direct labor cost (10,000 hours) ................ $80,000
Depreciation .............................................. $10,000
Rent ........................................................... $12,000
Taxes ......................................................... $8,000
Cost of goods sold ..................................... $157,000* *
Selling and administrative costs incurred:
Advertising ................................................ $35,000
Rent ........................................................... $20,000
Clerical ...................................................... $25,000
*Does not include over- or underapplied overhead.
57. The amount of direct material purchased during the year was:
A) $66,000
B) $70,000
C) $65,000
D) $74,000
Level: Medium LO: 6
58. The total costs added to Work in Process during the year were:
A) $206,000
B) $162,000
C) $176,000
D) $182,000
Level: Medium LO: 6
59. If Omar Company applies overhead to jobs on the basis of direct labor hours and Job 3
took 120 hours, how much overhead should be applied to that job?
A) $960
B) $360
C) $528
D) $288
Level: Medium LO: 3,5
60. The cost of goods manufactured for the year was:
A) $190,000
B) $162,000
C) $168,000
D) $135,000
Level: Medium LO: 6
Use the following to answer questions 74-76:
Dapper Company had only one job in process on May 1. The job had been charged with
$3,400 of direct materials, $4,640 of direct labor, and $9,200 of manufacturing overhead cost.
The company assigns overhead cost to jobs using the predetermined overhead rate of $23.00
per direct labor-hour.
During May, the activity was recorded:
Raw materials (all direct materials):
Beginning balance ....................................................... $8,500
Purchased during the month ........................................ $42,000
Used in production ...................................................... $48,500
Labor: Direct labor-hours worked during the month .............. 2,200
Direct labor cost incurred ............................................ $25,520
Actual manufacturing overhead costs incurred .............. $52,800
Inventories: Raw materials, May 30 ............................................... ?
Work in process, May 30 ............................................ $32,190
Work in process inventory on May 30 contains $7,540 of direct labor cost. Raw materials
consist solely of items that are classified as direct materials.
74. The balance in the raw materials inventory account on May 30 was:
A) $33,500
B) $2,000
C) $40,000
D) $6,500
 Level: Medium LO: 6
75. The cost of goods manufactured for May was:
A) $109,670
B) $124,620
C) $143,300
D) $126,820
Level: Hard LO: 6
Use the following to answer questions 77-80:
The direct labor rate in Brent Company is $9.00 per hour, and manufacturing overhead is
applied to products using a predetermined overhead rate of $6.00 per direct labor hour.
During May, the company purchased $60,000 in raw materials (all direct materials) and
worked 3,200 direct labor hours. The Raw Materials inventory (all direct materials) decreased
by $3,000 between the beginning and end of May. The Work in Process inventory on May 1
consisted of one job which had been charged with $4,000 in direct materials and on which
300 hours of direct labor time had been worked. There was no Work in Process inventory on
May 31.
77. The balance in the Work in Process inventory account on May 1 was:
A) $0
B) $6,700
C) $4,500
D) $8,500
Level: Medium LO: 4
78. The debit to Work in Process for the cost of direct materials used during May was:
A) $63,000
B) $61,000
C) $57,000
D) $67,000
Level: Medium LO: 4
79. The debit to Work in Process for direct labor cost during May was:
A) $21,000
B) $26,100
C) $28,800
D) $31,500
 Level: Medium LO: 4
80. If overhead was underapplied by $2,500 during May, the actual overhead cost for the
month must have been:
A) $16,700
B) $21,700
C) $18,500
D) $23,500
Level: Hard LO: 5,8
Use the following to answer questions 92-95:
Dillon Company applies manufacturing overhead to jobs using a predetermined overhead
rate of 75% of direct labor cost. Any under or overapplied overhead cost is closed out to Cost
of Goods Sold at the end of the month. During May, the following transactions were recorded
by the company:
Raw materials (all direct materials):
Purchased during the month ........................................ $38,000
Used in production ...................................................... $35,000
Labor: Direct labor hours worked during the month .............. 3,150
Direct labor cost incurred ............................................ $30,000
Manufacturing overhead cost incurred (total) ................ $24,500
Inventories: Raw materials (all direct), May 31 .............................. $8,000
Work in process, May 1 .............................................. $9,000
Work in process, May 31 ............................................ $12,000*
*Contains $4,400 in direct labor cost.
92. The balance on May 1 in the Raw Materials inventory account was:
A) $11,000
B) $5,000
C) $7,000
D) $9,000
Level: Medium LO: 6
93. The amount of direct materials cost in the May 31 Work in Process inventory account
was:
A) $7,600
B) $2,000
C) $6,300
D) $4,300
Level: Hard LO: 6
94. The entry to dispose of the under or overapplied overhead cost for the month would
include:
A) a debit of $2,000 to the Manufacturing Overhead account
B) a credit of $2,500 to the Manufacturing Overhead account
C) a debit of $2,000 to Cost of Goods Sold
D) a credit of $2,500 to Cost of Goods Sold
Level: Hard LO: 8
95. The Cost of Goods Manufactured for May was:
A) $84,500
B) $95,000
C) $75,500
D) $81,500
Level: Medium LO: 6
Use the following to answer questions 96-98:
Farber Corporation uses a job-order cost system. The information below is from the financial
records of the company for last year:
Total manufacturing costs ......................... $2,500,000
Cost of goods manufactured ...................... $2,425,000
Predetermined overhead rate ..................... 80% of direct labor cost
Applied overhead was 30% of total manufacturing costs. The Work in Process inventory at
January 1 was 75% of the Work in Process inventory at December 31.
96. Farber Company's total direct labor cost was:
A) $750,000
B) $600,000
C) $900,000
D) $937,500
Level: Hard LO: 6 Source: CMA, adapted
97. Total cost of direct material used by Farber Company was:
A) $750,000
B) $812,500
C) $850,000
D) $1,150,000
Level: Hard LO: 6 Source: CMA, adapted
98. The Work in Process inventory at December 31 was:
A) $300,000
B) $225,000
C) $100,000
D) $75,000
Level: Hard LO: 6 Source: CMA, adapted
Use the following to answer questions 99-101:
Killian Company began operations on January 1. The predetermined overhead rate was set at
$6.00 per direct labor-hour. Debits to Work in Process for the year totaled $550,000. Credits
to Work in Process totaled $480,000. Analysis of the Company's records indicates that direct
labor cost totaled $250,000 for the year, which represents 20,000 direct labor-hours.
99. The direct materials used in production during the year totaled:
A) $180,000
B) $240,000
C) $130,000
D) $120,000
Level: Hard LO: 7
100. If the actual manufacturing overhead cost for the year totaled $145,000, then overhead
was:
A) overapplied by $25,000
B) overapplied by $10,000
C) underapplied by $25,000
D) underapplied by $10,000
Level: Medium LO: 7,8
101. The Company's ending work in process inventory consisted of one job, Job 42. The job
had been charged with $28,000 of direct labor cost, which consisted of 2,000 actual labor-
hours. The direct materials cost in Job 42 totaled:
A) $33,000
B) $42,000
C) $17,000
D) $30,000
Level: Hard LO: 7
Use the following to answer questions 104-108:
The following partially completed T-accounts summarize transactions for Farwest Company
during the year:

104. The Cost of Goods Manufactured was:

A) $22,900
B) $26,300
C) $6,400
D) $49,200
Level: Medium LO: 7
105. The direct labor cost was:
A) $8,000
B) $12,300
C) $12,600
D) $11,000
Level: Hard LO: 7
106. The direct materials cost was:
A) $8,000
B) $10,000
C) $7,400
D) $4,600
Level: Hard LO: 7

107. The manufacturing overhead applied was:

A) $1,900
B) $6,800
C) $12,900
D) $3,000
Level: Medium LO: 7
108. The manufacturing overhead was:
A) $1,900 underapplied
B) $700 underapplied
C) $400 overapplied
D) $3,200 overapplied
Level: Medium LO: 7
Chapter 8
35. Ginger Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs and its activity based
costing system:
Costs:
Wages and salaries ............ $360,000
Depreciation ...................... 140,000
Utilities .............................. 160,000
Total ................................... $660,000
Distribution of resource consumption:
Activity Cost Pools Assembly Setting Up Other Total
Wages and salaries .............. 10% 80% 10% 100%
Depreciation ........................ 5% 50% 45% 100%
Utilities ................................ 15% 60% 25% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Setting Up
activity cost pool?
A) $528,000
B) $454,000
C) $418,000
D) $396,000
Level: Medium LO: 2
36. Grandolfo Corporation uses an activity-based costing system with three activity cost
pools. The company has provided the following data concerning its costs and its activity
based costing system:
Costs:
Wages and salaries ............ $300,000
Depreciation ...................... 200,000
Utilities .............................. 140,000
Total ................................... $640,000
Distribution of resource consumption:
Activity Cost Pools Assembly Setting Up Other Total
Wages and salaries .............. 45% 35% 20% 100%
Depreciation ........................ 20% 40% 40% 100%
Utilities ................................ 15% 55% 30% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Other activity
cost pool?
A) $192,000
B) $182,000
C) $128,000
D) $192,000
Level: Medium LO: 2
37. Futter Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs:
Wages and salaries ......... $440,000
Depreciation ................... 180,000
Occupancy ...................... 220,000
Total ................................ $840,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools Fabricating Order Processing Other Total
Wages and salaries ......... 55% 35% 10% 100%
Depreciation ................... 20% 35% 45% 100%
Occupancy ...................... 10% 50% 40% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Fabricating
activity cost pool?
A) $84,000
B) $300,000
C) $238,000
D) $462,000
Level: Medium LO: 2
38. Duerr Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs:
Wages and salaries ......... $400,000
Depreciation ................... 180,000
Occupancy ...................... 200,000
Total ................................ $780,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools Fabricating Order Processing Other Total
Wages and salaries ......... 55% 20% 25% 100%
Depreciation ................... 10% 50% 40% 100%
Occupancy ...................... 35% 40% 25% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Order
Processing activity cost pool?
A) $250,000
B) $286,000
C) $156,000
D) $312,000
Level: Medium LO: 2
39. Grammer Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs:
Wages and salaries ......... $240,000
Depreciation ................... 160,000
Occupancy ...................... 140,000
Total ................................ $540,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools Fabricating Order Processing Other Total
Wages and salaries ......... 30% 45% 25% 100%
Depreciation ................... 20% 35% 45% 100%
 Occupancy ...................... 5% 65% 30% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Other activity
cost pool?
A) $135,000
B) $174,000
C) $162,000
D) $180,000
Level: Medium LO: 2
41. Rosenbrook Corporation has provided the following data from its activity-based costing
system:
Activity Cost Pool Total Cost Total Activity
Assembly ..................... $710,770 37,000 machine-hours
Processing orders ......... $39,690 1,800 orders
Inspection .................... $119,116 1,940 inspection-hours
Data concerning one of the company’s products, Product H73N, appear below:
Selling price per unit .............................. $125.10
Direct materials cost per unit .................. $34.94
Direct labor cost per unit ........................ $49.21
Annual unit production and sales ........... 460
Annual machine-hours ........................... 510
Annual orders ......................................... 80
Annual inspections ................................. 10
According to the activity-based costing system, the product margin for product H73N is:
A) $7,275.90 per unit
B) $6,661.90 per unit
C) $18,837.00 per unit
D) $8,425.90 per unit
Level: Medium LO: 3,4,5
Use the following to answer questions 44-46:
Esmail Company is a wholesale distributor that uses activity-based costing for all of its
overhead costs. The company has provided the following data concerning its annual
overhead costs and its activity based costing system:
Overhead costs:
Wages and salaries ............ $380,000
Other expenses .................. 220,000
Total .................................. $600,000
Distribution of resource consumption:
Activity Cost Pools Filling Orders Customer Support Other Total
Wages and salaries .............. 55% 35% 10% 100%
Other expenses .................... 25% 55% 20% 100%
The “Other” activity cost pool consists of the costs of idle capacity and organizationsustaining
costs.
The amount of activity for the year is as follows:
Activity Cost Pool Activity Filling orders ..................... 4,000 orders
Customer support .............. 60 customers
44. What would be the total overhead cost per order according to the activity based costing
system? In other words, what would be the overall activity rate for the filling orders activity
cost pool? (Round to the nearest whole cent.)
A) $60.00
B) $66.00
C) $82.50
D) $37.50
Level: Medium LO: 2,3 Appendix: 8A
45. What would be the total overhead cost per customer according to the activity based
costing system? In other words, what would be the overall activity rate for the customer
support activity cost pool? (Round to the nearest whole dollar.)
A) $3,500
B) $5,500
C) $4,233
D) $4,500
 Level: Medium LO: 2,3 Appendix: 8A
46. To the nearest whole dollar, how much wages and salaries cost would be allocated to a
customer who made 6 orders in a year?
A) $2,264
B) $2,530
C) $1,998
D) $3,995
Level: Hard LO: 2,3,4,7 Appendix: 8A
52. What would be the total overhead cost per bouquet according to the activity based
costing system? In other words, what would be the overall activity rate for the making
bouquets activity cost pool? (Round to the nearest whole cent.)
A) $3.00
B) $3.20
C) $3.30
D) $3.60
Level: Medium LO: 2,3
53. What would be the total overhead cost per delivery according to the activity based
costing system? In other words, what would be the overall activity rate for the deliveries
activity cost pool? (Round to the nearest whole cent.)
A) $8.00
B) $5.00
C) $6.00
D) $2.00
Level: Medium LO: 2,3
Use the following to answer questions 54-56:
Dimaio Company uses an activity-based costing system with three activity cost pools. The
company has provided the following data concerning its costs and its activity based costing
system:
Costs:
Manufacturing overhead ....................................... $580,000
Selling and administrative expenses ..................... 240,000
Total ...................................................................... $820,000
Distribution of resource consumption:
Activity Cost Pools Order Customer Size Support Other Total
Manufacturing overhead ..................... 50% 40% 10% 100%
Selling and administrative expenses ... 5% 75% 20% 100%
The “Other” activity cost pool consists of the costs of idle capacity and organizationsustaining
costs.
You have been asked to complete the first-stage allocation of costs to the activity cost pools.
54. How much cost, in total, would be allocated in the first-stage allocation to the Order Size
activity cost pool?
A) $302,000
B) $41,000
C) $225,500
D) $410,000
Level: Easy LO: 2
55. How much cost, in total, would be allocated in the first-stage allocation to the Customer
Support activity cost pool?
A) $328,000
B) $412,000
C) $471,500
D) $615,000
Level: Easy LO: 2
56. How much cost, in total, should NOT be allocated to orders and products in the second
stage of the allocation process if the activity-based costing system is used for internal
decision-making?
A) $0
B) $106,000
C) $82,000
D) $164,000
Level: Medium LO: 2
Use the following to answer questions 57-59:
Dige Company uses an activity-based costing system with three activity cost pools. The
company has provided the following data concerning its costs and its activity based costing
system:
Costs:
Manufacturing overhead ....................................... $480,000
Selling and administrative expenses ..................... 220,000
Total ...................................................................... $700,000
Distribution of resource consumption:
Activity Cost Pools Order Customer Size Support Other Total
Manufacturing overhead ..................... 50% 40% 10% 100%
Selling and administrative expenses ... 30% 50% 20% 100%
The “Other” activity cost pool consists of the costs of idle capacity and organizationsustaining
costs.
You have been asked to complete the first-stage allocation of costs to the activity cost pools.
57. How much cost, in total, would be allocated in the first-stage allocation to the Order Size
activity cost pool?
A) $280,000
B) $306,000
C) $350,000
D) $210,000
Level: Easy LO: 2
58. How much cost, in total, would be allocated in the first-stage allocation to the Customer
Support activity cost pool?
A) $315,000
B) $280,000
C) $302,000
D) $350,000
Level: Easy LO: 2
59. How much cost, in total, should NOT be allocated to orders and products in the second
stage of the allocation process if the activity-based costing system is used for internal
decision-making?
A) $92,000
B) $0
C) $70,000
D) $140,000
Level: Medium LO: 2
Use the following to answer questions 71-72:
The controller of Kleyman Company estimates the amount of materials handling overhead
cost that should be allocated to the company's two products using the data that are given
below:
Wall Mirrors Specialty Windows
Total expected units produced .............. 4,000 3,000
Total expected material moves .............. 500 400
Expected direct labor-hours per unit ..... 7 6
The total materials handling cost for the year is expected to be $28,400.40.
71. If the materials handling cost is allocated on the basis of direct labor-hours, how much of
the total materials handling cost should be allocated to the wall mirrors? (Round off your
answer to the nearest whole dollar.)
A) $15,293
B) $16,176
C) $17,287
D) $14,200
Level: Easy LO: 6 Source: CMA, adapted
72. If the materials handling cost is allocated on the basis of material moves, how much of
the total materials handling cost should be allocated to the specialty windows? (Round off
your answer to the nearest whole dollar.)
A) $12,622
B) $13,108
C) $12,224
D) $14,200
Level: Easy LO: 3,4 Source: CMA, adapted
Use the following to answer questions 79-80:
Andry Corporation uses activity-based costing to determine product costs for external
financial reports. The company has provided the following data concerning its activity-based
costing system:
Activity Cost Pools (and Activity Measures) Estimated Overhead Cost
Machine related (machine-hours) ................... $177,000
Batch setup (setups) ........................................ $453,600
General factory (direct labor-hours) ................ $227,000
Expected Activity
Activity Cost Pools Total Product X Product Y
Machine related ........ 10,000 7,000 3,000
Batch setup ............... 7,000 5,000 2,000
General factory ......... 10,000 6,000 4,000
79. The activity rate for the batch setup activity cost pool is closest to:
A) $122.50
B) $226.80
C) $90.70
D) $64.80
Level: Medium LO: 3
80. Assuming that actual activity turns out to be the same as expected activity, the total
amount of overhead cost allocated to Product X would be closest to:
A) $613,000
B) $454,000
C) $428,800
D) $584,100
Level: Medium LO: 3,4
Use the following to answer questions 84-85:
Thoen Nuptial Bakery makes very elaborate wedding cakes to order. The company has an
activity-based costing system with three activity cost pools. The activity rate for the
SizeRelated activity cost pool is $0.96 per guest. (The greater the number of guests, the larger
the cake.) The activity rate for the Complexity-Related cost pool is $54.24 per tier. (Cakes
with more tiers are more complex.) Finally, the activity rate for the Order-Related activity
cost pool is $56.44 per order. (Each wedding involves one order for a cake.) The activity rates
include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity
rates do not include the costs of purchased decorations such as miniature statues and
wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:
Nie Wedding Strobl Wedding
Number of reception guests ...................... 67 129
Number of tiers on the cake ...................... 3 5
Cost of purchased decorations for cake .... $23.50 $31.31
84. Assuming that all of the costs listed above are avoidable costs in the event that an order is
turned down, what amount would the company have to charge for the Nie wedding cake to
just break even?
A) $56.44
B) $306.98
C) $23.50
D) $371.45
Level: Medium LO: 4
85. Assuming that the company charges $584.18 for the Strobl wedding cake, what would be
the overall margin on the order?
A) $157.83
B) $101.39
C) $132.70
D) $482.79
Level: Medium LO: 4,5