Question 1

If output decreases

Accepted Answer

A) total fixed costs will remain the same. 
B) total variable costs will increase. 
C) per-unit fixed costs will decrease. 
D) all of these are correct 
A) total fixed costs will remain the same. 
B) total variable costs will increase. 
C) per-unit fixed costs will decrease. 
D) all of these are correct

Question 2

Which of the following would be an example of a fixed cost?

Accepted Answer

A) wages for an assembly line worker 
B) electric bill 
C) depreciation on equipment 
D) materials used 
A) wages for an assembly line worker 
B) electric bill 
C) depreciation on equipment 
D) materials used

Question 3

A cost __________ is a casual factor that measures the output of the activity that leads costs to change.

Accepted Answer

The answer of A cost __________ is a casual factor...

Question 4

As output decreases fixed costs per unit will increase.

Accepted Answer

A) True 
 B)False

Question 5

A variable cost increases in total when output increases but the per-unit costs remains the same.

Accepted Answer

The answer of A variable cost increases in total when...

Question 6

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output)
Refer to Figure 3-1.In the cost formula above which element would be the independent variable?

Accepted Answer

A) fixed cost 
B) total cost 
C) output 
D) variable rate 
A) fixed cost 
B) total cost 
C) output 
D) variable rate

Question 7

Figure 3-12. The method of least squares was used to develop a cost equation to predict the cost of monthly equipment maintenance.The following computer output was received:
  The driver used was the number of machine hours.
Refer to Figure 3-12.What is the independent variable of the cost formula for equipment maintenance?

Accepted Answer

A) number of machine hours 
B) the variable rate 
C) the fixed cost 
D) the total cost 
A) number of machine hours 
B) the variable rate 
C) the fixed cost 
D) the total cost

Question 8

The slope of a mixed cost line is equal to the fixed element of the cost.

Accepted Answer

A) True 
 B)False

Question 9

Spangle Company constructed the following cost formula for its monthly maintenance cost.
Total monthly maintenance cost = $9,000 + ($1.75 ´ no.machine hours)
Required:

Accepted Answer

The answer of Spangle Company constructed the following cost formula...

Question 10

The controller at Speedy Delivery wants to break-out the cost of deliveries into fixed and variable components so that they will be better able to predict costs for next year.Below are the delivery cost incurred each month and the number of deliveries.
   Required: Using the high-low method:
1.)Calculate the fixed cost of overhead.
2.)Calculate the variable rate per labor hour.
3.)Construct the cost formula for total overhead cost.
4.)The company is estimating that in January the number of deliveries will be 125.How much should they estimate to have in total delivery costs for January?

Accepted Answer

$4,000-1,600/200-75 = $19.20 variable ra

Question 11

Below are the overhead costs and labor hours for Smith & Co.
   Required: Using the high-low method:
1.)Calculate the fixed cost of overhead.
2.)Calculate the variable rate per labor hour.
3.)Construct the cost formula for total overhead cost.
4.)The company is estimating that in September the labor hours will be 600.How much should they estimate to have in total overhead cost for September?

Accepted Answer

The answer of Below are the overhead costs and labor...

Question 12

Hipcuts Company operates a chain of trendy beauty salons.The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company.You have been asked to analyze the following six months worth of data.
   A regression analysis produced the following coefficients.
   Required:

Accepted Answer

The answer of Hipcuts Company operates a chain of trendy...

Question 13

Which of the following would probably be a fixed cost in a fast-food restaurant?

Accepted Answer

A) cost of hamburger 
B) cost of french fries 
C) shift manager's salary 
D) utility cost 
A) cost of hamburger 
B) cost of french fries 
C) shift manager's salary 
D) utility cost

Question 14

_______________________ are costs that have both a fixed and a variable component.

Accepted Answer

The answer of _______________________ are costs that have both a...

Question 15

Machine hours and electricity costs for Wells Industries for 2011 were as follows:
   Required:

Accepted Answer

The answer of Machine hours and electricity costs for Wells...

Question 16

Laconic Company manufactures ultra sound equipment.Based on past experience,Laconic has found that total annual repair and maintenance cost can be represented by the following formula: total annual repair and maintenance cost = $205,000 + $7.50x,where x = machine hours.Last year,Laconic incurred 145,000 machine hours.
Required:

Accepted Answer

The answer of Laconic Company manufactures ultra sound equipment.Based on...

Question 17

Grindgood Company operates a chain of cozy coffee shops.The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company.You have been asked to analyze the following six months worth of data.
   Required:

Accepted Answer

The answer of Grindgood Company operates a chain of cozy...

Question 18

Per-unit fixed costs

Accepted Answer

A) can be misleading and lead to poor decisions. 
B) stay the same as output changes. 
C) decrease as output decreases. 
D) increase as output increases. 
A) can be misleading and lead to poor decisions. 
B) stay the same as output changes. 
C) decrease as output decreases. 
D) increase as output increases.

Question 19

Total variable costs = Variable rate ´ amount of output.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an example of a discretionary fixed cost?

Accepted Answer

A) depreciation of equipment 
B) advertising costs 
C) rental of machinery 
D) insurance on automobiles 
A) depreciation of equipment 
B) advertising costs 
C) rental of machinery 
D) insurance on automobiles

If output decreases

Which of the following would be an example of a fixed cost?

A cost __________ is a casual factor that measures the output of the activity that leads costs to change.

As output decreases fixed costs per unit will increase.

A variable cost increases in total when output increases but the per-unit costs remains the same.

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the independent variable?

The slope of a mixed cost line is equal to the fixed element of the cost.

Spangle Company constructed the following cost formula for its monthly maintenance cost. Total monthly maintenance cost = $9,000 + ($1.75 ´ no.machine hours) Required:

Which of the following would probably be a fixed cost in a fast-food restaurant?

_______________________ are costs that have both a fixed and a variable component.

Machine hours and electricity costs for Wells Industries for 2011 were as follows: Required:

Grindgood Company operates a chain of cozy coffee shops.The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company.You have been asked to analyze the following six months worth of data. Required:

Per-unit fixed costs

Total variable costs = Variable rate ´ amount of output.

Which of the following is an example of a discretionary fixed cost?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: Cost Behavior

If output decreases

Which of the following would be an example of a fixed cost?

A cost __________ is a casual factor that measures the output of the activity that leads costs to change.

As output decreases fixed costs per unit will increase.

A variable cost increases in total when output increases but the per-unit costs remains the same.

Figure 3-1. Total cost = Fixed cost + (Variable Rate ´ Output) Refer to Figure 3-1.In the cost formula above which element would be the independent variable?

The slope of a mixed cost line is equal to the fixed element of the cost.

Spangle Company constructed the following cost formula for its monthly maintenance cost. Total monthly maintenance cost = $9,000 + ($1.75 ´ no.machine hours) Required:

Which of the following would probably be a fixed cost in a fast-food restaurant?

_______________________ are costs that have both a fixed and a variable component.

Machine hours and electricity costs for Wells Industries for 2011 were as follows: Required:

Grindgood Company operates a chain of cozy coffee shops.The company's chief executive officer is interested in accumulating some information on the overhead costs incurred by the company.You have been asked to analyze the following six months worth of data. Required:

Per-unit fixed costs

Total variable costs = Variable rate ´ amount of output.

Which of the following is an example of a discretionary fixed cost?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters