Exam 5: Cost Behavior and Estimation

Bayshore, Inc., has collected the following cost data for various levels of activity: Using the high-low method, determine the variable cost per client served and the total fixed cost.

If a firm uses absorption costing, which of the following actions taken by management would increase gross profit even if sales do not increase?

Total contribution margin is defined as:

What is the difference between full absorption costing and variable costing?

The unit contribution margin:

Jasmine Corp. has a selling price of $15, variable costs of $10 per unit, and fixed costs of $25,000. Contribution margin is $85,000. How many units did Jasmine sell?

Which of the following is a variable cost?

A statistical method for finding the best-fitting cost equation to a set of data is the:

Cypress, which uses the high-low method, had an average cost per unit of $5 at its lowest level of activity when sales equaled 10,000 units and an average cost per unit of $3.25 at its highest level of activity when sales equaled 24,000 units. Cypress would estimate fixed costs as:

Which of the following statements is correct about the difference between contribution margin and gross margin?

A variable cost increases in total as the volume increases

The cost estimating approach that involves "eye-balling" the closest fitting line to the data is the:

The per-unit amount of three different production costs for Thunderbird, Inc., are as follows: What type of cost is each?

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?

Regression analysis is a cost-estimating approach that uses _______________ to find the cost line.

Stella, Inc. must perform maintenance on its production machinery after every 10,000 units produced. Production varies between 12,000 and 30,000 units a year. The cost of this maintenance would be classified as a

Fixed costs are expressed _____________ because that is the amount of cost that is truly fixed.

Aspen Inc has the following information for its first year of operations: a. Prepare Aspen's full absorption costing income statement. b. Prepare Aspen's variable costing income statement.

Which of the following statements is correct about relevant range?

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?