Exam 3: Cost Behaviour

Tyson Manufacturing Tyson Manufacturing has the following cost information available for 2009: Direct materials \ 6.00 per unit Direct labour \ 2.00 per unit Variable manufacturing overhead \ 1.50 per unit Variable selling and administrative costs \ 3.00 per unit Fixed manufacturing overhead \ 40000 Fixed selling and administrative costs \ 50000 During 2009, Tyson produced 10 000 units out of which 9100 units were sold for $50 each. -What is net income under variable costing?

You are given the following cost and volume information: $\begin{array} { c c } \begin{array} { c } \text { Volume } \\(\text { in units) }\end{array} & \begin{array} { c } \text { Cost per unit } \\( \text { in \$})\end{array} \\\hline 500&\$6 \\1000 &3\\1500 &2 \\\end{array}$ Which type of cost is given?

As production goes up,total fixed costs ____.

B & B Manufacturing B & B Manufacturing produces a single product. Last year, the company produced 10 000 units out of which 9500 were sold. There were no units in beginning inventory. The company had the following costs: Production \ 6.00 Selling and administrative \ 2.00 Production \ 15000 Selling and administrative \ 10000 -What is the unit product cost using absorption costing?

Reliable Movers Inc.documented the miles driven and total moving van costs for the past five months as follows: Number af miles Total vehicle costs January 3000 \ 4800 February 3500 5200 March 5000 6100 April 4000 5000 May 6000 6000 In order to budget total vehicle costs for the upcoming summer months,Reliable wishes to estimate total vehicle costs using the high/low method. Required: A. What is the equation to predict estimated total vehicle costs? B. If the company expects to drive 9000 miles in June, what will be the estimated total vehicle costs?

As production decreases,fixed costs per unit ____.

Which of the following types of costs is the least likely to be classified as variable?

Which of the following statements is false regarding absorption costing?

Chadwick Ski Lodge Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The following shows the budgeted housekeeping costs per month at various occupancies: Number of occupied rooms Housekeeping costs 0-25 \ 1500 26-40 3000 41-55 4500 -The number of occupied rooms during the month of January is expected to be between 41 and 55 at all times.For the month of January,what type of cost does housekeeping effectively become?

Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows: Number of miles Total vehicle costs January 800 \ 1095 February 1000 1440 March 750 1200 April 900 1380 May 1100 1410 -Using the high/low method,what is the cost equation to predict total vehicle costs?

Sabina and Associates has the following current year costs: Variable costs \ 4 per unit Fixed costs \2 0000 Next year,the company plans to enter into an arrangement with a supplier that will result in a 15 per cent decrease in variable costs.They also plan on reducing their rental space,which will decrease fixed costs by 10 per cent. Required: A. What will be the new equation to predict total costs? B. If next year's production is expected to be 10000 units, what will be total estimated costs?

As production increases,fixed costs per unit ____.

____ are costs that change in total when production volume increases or decreases within the relevant range.

Blossom Products is considering a special project that will increase sales revenue by $60 000 without affecting costs.If the company has a tax rate of 25 per cent,what will be the after-tax profit?

Assuming that the number of units produced is greater than the number of units sold,which of the following statements is true when comparing net income using absorption and variable costing?

As production decreases,variable costs per unit ____.

Which of the following statements is true regarding regression analysis?

Manning Inc.is contemplating the rental of a special tool for $3000 per month.If their tax rate is 35 per cent,what is the after-tax monthly cost of renting the tool?

You are trying to determine whether machine hours or direct labour dollars would be the best cost driver for overhead costs.You run two regression analyses and obtain the following results: Machine hours Multiple R .39429 R square .15547 Adjusted R square .14964 Standard error .44416 Direct labour dollars: Multiple R .89429 R square .79547 Adjusted R square .289647 Standard .44416 Which variable would be the best selection for a cost driver and why?

When using regression analysis to predict mixed cost behaviour,which of the following would be the dependent variable?