Managerial Test 1 Review Problems: Things to Remember

Total Fixed Manufacturing Overhead

The average Total Fixed Manufacturing Overhead per cost unit of x is only valid at one price level. Multiply cost per unit by number at top of problem

Traditional Income Statement

Sales
- COGS
Gross Margin
Total Expenses
Sales Expenses (Mix)
Admin Expenses (Mix)

NET OPERATING INCOME

Contribution Income Statement

Sales

Variable Expenses
COGS
Sales Exp.
Admin. Exp.

Contribution Margin
Fixed Expenses
Sales Expenses
Admin. Expenses
NET OPERATING INCOME

Property taxes, factory

Fixed, Indirect

Boxes used for packaging detergent produced by the company

Variable, Direct

Salesperson’s Commissions

Variable, Selling Cost

Supervisor’s Salary, Factory

Fixed, Indirect

Depreciation, Executive Autos

Fixed, Administrative

Wages of workers assembling computers

Variable, Direct

Insurance, finished goods warehouses

Fixed, Selling

Lubricants for production equipment

Variable, Indirect

Advertising Costs

Fixed, Selling

Microchips used in producing calculators

Variable, Direct

Shipping Costs on Merchandise Sold

Variable, Selling

Magazine Subscriptions, factory lunchroom

Fixed, Indirect

Thread in a garment factory

Variable, Indirect

Executive Life Insurance

Fixed, Administrative

Ink used in textbook production

Variable, Indirect

Fringe benefits, materials handling workers

Variable, Indirect

Yarn used in sweater production

Variable, Direct

Wages of receptionist, executive office

Fixed, Administrative