Exam 5: Cost Behavior and Estimation

Kent Corp. has fixed costs of $25,000. Kent expects net operating income of $300,000 at its anticipated level of production, 65,000 units. What is Kent's unit contribution margin?

Contribution margin is defined as sales revenue less variable costs

The difference between variable costing and full absorption costing is due to differences in the treatment of:

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

Full absorption costing divides fixed overhead between Cost of Goods Sold and period expenses

Which of the following is a mixed cost?

Sugarloaf Enterprises has presented the following information for the past three months operations: a. Using the high-low method, calculate the fixed cost per month and variable cost per unit. b. What would total costs be for a month with 3,000 units produced?

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?

Holly Co. uses the high-low method. It had an average cost per unit of $10 at its lowest level of activity when sales equaled 10,000 units and an average cost per unit of $6.50 at its highest level of activity when sales equaled 20,000 units. Holly would estimate fixed costs as:

Vaughn, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $15 for direct materials, $15 for direct labor, and $10 for variable overhead. Fixed costs were $10,000 in manufacturing overhead and $50,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 5,000 units, by how much will profits increase?

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?

Flint Enterprises had the following cost and production information for April: Inventory increased by 3,000 units during April. What is Flint Enterprise's income under absorption costing?

A cost that changes, in total, in direct proportion to changes in activity levels is a(n):

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?

A scattergraph is a graph with:

Onini, Inc. produces one product with two production levels: 20,000 units and 80,000 units. At each production level, Onini's per-unit costs for Costs A, B, and C are: What type of cost is each?

The high-low method requires three observations of costs to calculate the cost formula

The contribution margin ratio is:

The y-intercept of the cost line on a scattergraph represents:

Georgia uses the high-low method of estimating costs. Georgia 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 10,000 units, total costs were $78,000. Georgia would estimate variable cost per unit as: