Question 1

Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Accepted Answer

A) $18,000 
B) $45,000 
C) $50,000 
D) $90,000 
A) $18,000 
B) $45,000 
C) $50,000 
D) $90,000 C

Question 2

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

Accepted Answer

A) $40,500 
B) $90,000 
C) $111,111 
D) $200,000 
A) $40,500 
B) $90,000 
C) $111,111 
D) $200,000 D

Question 3

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Accepted Answer

A) $100,800 
B) $115,200 
C) $129,600 
D) It cannot be determined from the information given. 
A) $100,800 
B) $115,200 
C) $129,600 
D) It cannot be determined from the information given. C

Question 4

Which of the following statements is true?

Accepted Answer

A) Fixed costs are constant on a per unit basis. 
B) Variable costs per unit decrease as activity volume increases. 
C) Variable costs are constant in total dollars. 
D) Fixed costs are constant in total dollars. 
A) Fixed costs are constant on a per unit basis. 
B) Variable costs per unit decrease as activity volume increases. 
C) Variable costs are constant in total dollars. 
D) Fixed costs are constant in total dollars.

Question 5

The slope of the cost line on a scattergraph represents

Accepted Answer

A) fixed cost per unit. 
B) total fixed cost. 
C) variable cost per unit. 
D) sales price per unit. 
A) fixed cost per unit. 
B) total fixed cost. 
C) variable cost per unit. 
D) sales price per unit.

Question 6

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Accepted Answer

A) Total cost = $175,003 + ($11.57 × Production) 
B) Total cost = $61,603 + ($0.92 × Production) 
C) Total cost = $175,003 + ($61,603 × Production) 
D) Total cost = $11.57 + ($0.9213 × Production) 
A) Total cost = $175,003 + ($11.57 × Production) 
B) Total cost = $61,603 + ($0.92 × Production) 
C) Total cost = $175,003 + ($61,603 × Production) 
D) Total cost = $11.57 + ($0.9213 × Production)

Question 7

Which of the following is a mixed cost?

Accepted Answer

A) A cost that is $32.00 per unit when production is 80,000,and $32.00 per unit when production is 128,000. 
B) A cost that is $32.00 per unit when production is 80,000,and $40.00 per unit when production is 128,000. 
C) A cost that is $32.00 per unit when production is 80,000,and $26.00 per unit when production is 128,000. 
D) A cost that is $64.00 per unit when production is 80,000,and $64.00 per unit when production is 128,000. 
A) A cost that is $32.00 per unit when production is 80,000,and $32.00 per unit when production is 128,000. 
B) A cost that is $32.00 per unit when production is 80,000,and $40.00 per unit when production is 128,000. 
C) A cost that is $32.00 per unit when production is 80,000,and $26.00 per unit when production is 128,000. 
D) A cost that is $64.00 per unit when production is 80,000,and $64.00 per unit when production is 128,000.

Question 8

McNeil uses the high-low method of estimating costs.McNeil had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.What would McNeil estimate its total cost to be if sales equaled 8,000 units?

Accepted Answer

A) $32,000 
B) $52,000 
C) $62,000 
D) $80,000 
A) $32,000 
B) $52,000 
C) $62,000 
D) $80,000

Question 9

Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Accepted Answer

A) $40,000 
B) $100,000 
C) $60,000 
D) $300,000 
A) $40,000 
B) $100,000 
C) $60,000 
D) $300,000

Question 10

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Accepted Answer

A) $5.00 
B) $12.50 
C) $15.00 
D) $17.08 
A) $5.00 
B) $12.50 
C) $15.00 
D) $17.08

Question 11

Profit will be the same under variable costing as under full absorption costing whenever

Accepted Answer

A) production is greater than sales. 
B) production is the same as sales. 
C) production is less than sales. 
D) variable costing is chosen for external reporting purposes. 
A) production is greater than sales. 
B) production is the same as sales. 
C) production is less than sales. 
D) variable costing is chosen for external reporting purposes.

Question 12

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Accepted Answer

A) $60,000 
B) $315,000 
C) $340,000 
D) $400,000 
A) $60,000 
B) $315,000 
C) $340,000 
D) $400,000

Question 13

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Accepted Answer

A) It is impossible to determine. 
B) 4.83% 
C) 95.17% 
D) 97.55% 
A) It is impossible to determine. 
B) 4.83% 
C) 95.17% 
D) 97.55%

Question 14

Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

Accepted Answer

A) $30.00. 
B) $82.50. 
C) $17,500. 
D) $35,000. 
A) $30.00. 
B) $82.50. 
C) $17,500. 
D) $35,000.

Question 15

The contribution margin ratio is

Accepted Answer

A) the difference between sales revenue and variable costs. 
B) the difference between variable costs and fixed costs. 
C) variable costs divided by fixed costs. 
D) contribution margin per unit divided by sales price per unit. 
A) the difference between sales revenue and variable costs. 
B) the difference between variable costs and fixed costs. 
C) variable costs divided by fixed costs. 
D) contribution margin per unit divided by sales price per unit.

Question 16

Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Accepted Answer

A) $9. 
B) $6. 
C) negative $9. 
D) negative $0.0009. 
A) $9. 
B) $6. 
C) negative $9. 
D) negative $0.0009.

Question 17

Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Accepted Answer

A) $2.00 
B) $5.00 
C) $7.00 
D) $10.00 
A) $2.00 
B) $5.00 
C) $7.00 
D) $10.00

Question 18

Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Accepted Answer

A) True 
 B)False

Question 19

Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Accepted Answer

A) fixed cost. 
B) mixed cost. 
C) variable cost. 
D) step cost. 
A) fixed cost. 
B) mixed cost. 
C) variable cost. 
D) step cost.

Question 20

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Accepted Answer

A) $28,000. 
B) $30,000. 
C) $64,000. 
D) $128,000. 
A) $28,000. 
B) $30,000. 
C) $64,000. 
D) $128,000.

Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Which of the following statements is true?

The slope of the cost line on a scattergraph represents

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Which of the following is a mixed cost?

Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Profit will be the same under variable costing as under full absorption costing whenever

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

The contribution margin ratio is

Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 5: Cost Behavior

Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Which of the following statements is true?

The slope of the cost line on a scattergraph represents

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Which of the following is a mixed cost?

Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Profit will be the same under variable costing as under full absorption costing whenever

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

The contribution margin ratio is

Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters