At a sales volume of 20,000 units, Choice Corporation's sales commmissions (a cost that is variable with respect to sales volume) total $132,000. To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 18,500 units? (Assume that this sales volume is within the relevant range.) $6.60 $6.87 $7.17 $7.14 9. Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. The salary that Mark earns at his present employ is: a variable cost a fixed cost a product cost an opportunity cost 10. Factory supplies in a manufacturing plant are most likely: sunk costs. period costs. variable costs. excluded from product costs. 11. Chezpere Company manufactures and sells washing machines. In order to make assembly of the machines faster and easier, some of the metal parts in the machines are coated with grease. How should the cost of this grease be classified? a. Direct Material Cost b. Fixed Cost a. Yes, b. Yes a. Yes, b. No a. No, b. Yes a. No, b. No 12. The fixed portion of the cost of electricity for a manufacturing plant is: a. Period cost b. Product cost a. Yes, b. No a. Yes, b. Yes a. No, b. Yes a. No, b. No 13. Mendoza, Inc. manufactures and sells aluminum dishes for camping and outdoor enthusiasts through a mail order catalog operation. Large rectangular sheets of aluminum are purchased by Mendoza. These sheets are cut down into smaller squares and are then fed into a machine where they are trimmed down into a circular shape. These aluminum circles are then fed into a stamping machine where they are formed into plates and bowls. After production, the dishes are shipped to warehouses where they are packed and then shipped to customers. Which of the following terms could be used to correctly describe the cost of electricity used to run the stamping machine? direct labor cost administrative cost opportunity cost manufacturing overhead cost 14. Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. Mark purchased a machine two years ago to make experimental boards. The machine will be used to manufacture the new board. The cost of this machine is: an opportunity cost a sunk cost a differential cost a period cost 15. At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed with respect to sales volume) total $733,400. To the nearest whole center, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.) $19.30 $19.66 $19.72 $19.48 16. At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed with respect to sales volume) total $733,400. To the nearest whole dollar, what should be the total property taxes at a sales volume of 37,200 units? (Assume that this sales volume is within the relevant range.) $725,680 $733,400 $749,172 $717,960 17. A manufacturing plant produces two product lines: football equipment and hockey equipment. Direct costs for the football equipment line are the: beverages provided daily in the plant break room monthly lease payments for a specialized piece of equipment needed to manufacture the football helmet salaries of the clerical staff that work in the company administrative offices utilities paid for the manufacturing plant 18. Haala Inc. is a merchandising company. Last month the company's cost of goods sold was $68,000. The company's beginning merchandise inventory was $11,000 and its ending merchandise inventory was $17,000. What was the total amount of the company's merchandise purchases for the month? $96,000 $62,000 $68,000 $74,000 19. A manufacturing plant produces two product lines: football equipment and hockey equipment. An indirect cost for the hockey equipment line is the: material used to make the hockey sticks labor to bind the shaft to the blade of the hockey stick shift supervisor for the hockey line plant supervisor 20. How much sunk cost is represented in the following list? Annual operating cost $80,000 Fixed operating costs other than depreciation $14,000 Resale value, if sold now $25,000 Original cost of current machine $68,000 $80,000 $14,000 $25,000 $68,000