Question 1

What term represents the total cost in the equation: y = vx + f?

Accepted Answer

A) f 
B) v 
C) vx 
D) y 
A) f 
B) v 
C) vx 
D) y

Question 2

Your boss wants you to analyze the relationship between the company's monthly operating costs and the current cost driver she has chosen.You run a regression analysis and receive the following information:
Intercept Coefficient = 653,434
X Variable 1 Coefficient = 5.76
R-square = 0.3784
What is your company's monthly cost equation?

Accepted Answer

A) y = $653,434x + $5.76 
B) y = $0.38x + $653,434 
C) y = $5.76x + $653,434 
D) y = $0.38x + $576 
A) y = $653,434x + $5.76 
B) y = $0.38x + $653,434 
C) y = $5.76x + $653,434 
D) y = $0.38x + $576

Question 3

The controller for Andy's Bicycles has gathered the following cost and activity level information:
   
a.What is the total cost of producing 1,000 racing bicycles?
b.What is the variable cost of producing each racing bicycle?
c.Suppose the controller uses the average cost to predict total costs.What total cost would the controller calculate for 2,500 racing bicycles?
d.If the controller uses the cost equation to predict total costs,what total cost would the controller calculate for 2,500 racing bicycles?
e.Is there a difference between the forecasted total cost using average cost versus the cost equation? If there is a difference,what creates the difference? If there is no difference,when would there be a difference?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& Part e.
There is a difference between

Question 4

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece.Homer pays a sales commission of 5% of sales revenue to his sales staff.Homer also pays $12,000 a month rent for his factory and store,and also pays $75,000 a month to his staff in addition to the commissions.Homer sold 67,500 baseballs in June.If Homer prepares a traditional income statement for the month of June,what would be his operating income?

Accepted Answer

A) $270,000 
B) $319,875 
C) $219,375 
D) $118,875 
A) $270,000 
B) $319,875 
C) $219,375 
D) $118,875

Question 5

Manufacturing overhead (consisting of costs like factory rent,factory utilities,factory maintenance,and other similar costs)is usually what type of cost?

Accepted Answer

A) Variable 
B) Fixed 
C) Step 
D) Mixed 
A) Variable 
B) Fixed 
C) Step 
D) Mixed

Question 6

Jones Ice Cream Stand is operated by Mr.Jones and experiences different sales patterns throughout the year.To plan for the future,Mr.Jones wants to determine its cost behavior patterns.He has the following information available about the ice cream stand's operating costs and the number of soft serve cones served.
 
The variable cost per ice cream cone using the high-low method is

Accepted Answer

A) $0.25. 
B) $4.00. 
C) $0.63. 
D) $1.19. 
A) $0.25. 
B) $4.00. 
C) $0.63. 
D) $1.19.

Question 7

In a manufacturing company,fixed costs remain the same at many different production levels within the relevant range.

Accepted Answer

A) True 
 B)False

Question 8

If a scatter plot reveals a fairly weak relationship between cost and volume,the cost equation based on that data would not be very useful for predicting future costs.

Accepted Answer

A) True 
 B)False

Question 9

If a regression analysis shows an R factor of .89 exists,it is safe to assume

Accepted Answer

A) a strong negative relationship between cost and volume. 
B) a strong positive relationship between cost and volume. 
C) no relationship between cost and volume. 
D) a perfect positive relationship between cost and volume. 
A) a strong negative relationship between cost and volume. 
B) a strong positive relationship between cost and volume. 
C) no relationship between cost and volume. 
D) a perfect positive relationship between cost and volume.

Question 10

Which type of costing system is the only acceptable costing system for external financial reporting?

Accepted Answer

A) Prime costing 
B) Out-of-pocket costing 
C) Variable costing 
D) Absorption costing 
A) Prime costing 
B) Out-of-pocket costing 
C) Variable costing 
D) Absorption costing

Question 11

When using the high-low method,fixed costs and variable costs appear in the same cost equation.

Accepted Answer

A) True 
 B)False

Question 12

Stanley's Bicycles store buys bicycles on average for $600 and sells them on average for $750.He pays a sales commission of 15% of sales revenue to his sales staff.Stanley pays $1,400 a month rent for his store,and also pays $3,000 a month to his staff in addition to the commissions.Stanley sold 120 bicycles in June.If Stanley prepares a contribution margin income statement for the month of June,what would be his operating income?

Accepted Answer

A) $8,900 
B) $90,000 
C) $85,500 
D) $100 
A) $8,900 
B) $90,000 
C) $85,500 
D) $100

Question 13

Using account analysis,what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

Accepted Answer

A) Mixed 
B) Fixed 
C) Step 
D) Variable 
A) Mixed 
B) Fixed 
C) Step 
D) Variable

Question 14

Selected financial data for Spark Enterprises follows for a production level of 120,000 units:
   
a.Calculate the variable cost per unit.
b.If Flash Corporation makes 75,000 units,calculate the fixed cost per unit.
c.If Flash Corporation makes 160,000 units,calculate the total variable costs.
d.If Flash Corporation makes 180,000 units,calculate the total costs.

Accepted Answer

The answer of Selected financial data for Spark Enterprises follows...

Question 15

An equation of a line for total costs is

Accepted Answer

A) y = vx - f. 
B) y = fx + v. 
C) y = f. 
D) none of the above. 
A) y = vx - f. 
B) y = fx + v. 
C) y = f. 
D) none of the above.

Question 16

Describe the scatter plot method.Discuss the advantages and disadvantages of using the scatter plot method.

Accepted Answer

The scatter plot method involves plottin

Question 17

The representation for total variable costs is

Accepted Answer

A) vx + f. 
B) vx. 
C) vx - f. 
D) y = vx + f. 
A) vx + f. 
B) vx. 
C) vx - f. 
D) y = vx + f.

Question 18

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

Accepted Answer

A) Mixed cost 
B) Fixed cost 
C) Conversion cost 
D) Variable cost 
A) Mixed cost 
B) Fixed cost 
C) Conversion cost 
D) Variable cost

Question 19

Which type of cost behavior is indicated by the following graph?

Accepted Answer

A) Fixed 
B) Step 
C) Mixed 
D) Variable 
A) Fixed 
B) Step 
C) Mixed 
D) Variable

Question 20

At Dwight Incorporated,total fixed and variable costs are $400,000 at a production level of 100,000 units.The company has total fixed costs of $225,000.The fixed cost per unit at a production level of 150,000 units is

Accepted Answer

A) $4.00. 
B) $2.25. 
C) $2.67. 
D) $1.50. 
A) $4.00. 
B) $2.25. 
C) $2.67. 
D) $1.50.

What term represents the total cost in the equation: y = vx + f?

Manufacturing overhead (consisting of costs like factory rent,factory utilities,factory maintenance,and other similar costs)is usually what type of cost?

In a manufacturing company,fixed costs remain the same at many different production levels within the relevant range.

If a scatter plot reveals a fairly weak relationship between cost and volume,the cost equation based on that data would not be very useful for predicting future costs.

If a regression analysis shows an R factor of .89 exists,it is safe to assume

Which type of costing system is the only acceptable costing system for external financial reporting?

When using the high-low method,fixed costs and variable costs appear in the same cost equation.

Using account analysis,what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

An equation of a line for total costs is

Describe the scatter plot method.Discuss the advantages and disadvantages of using the scatter plot method.

The representation for total variable costs is

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

Which type of cost behavior is indicated by the following graph?

At Dwight Incorporated,total fixed and variable costs are $400,000 at a production level of 100,000 units.The company has total fixed costs of $225,000.The fixed cost per unit at a production level of 150,000 units is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

What term represents the total cost in the equation: y = vx + f?

Manufacturing overhead (consisting of costs like factory rent,factory utilities,factory maintenance,and other similar costs)is usually what type of cost?

In a manufacturing company,fixed costs remain the same at many different production levels within the relevant range.

If a scatter plot reveals a fairly weak relationship between cost and volume,the cost equation based on that data would not be very useful for predicting future costs.

If a regression analysis shows an R factor of .89 exists,it is safe to assume

Which type of costing system is the only acceptable costing system for external financial reporting?

When using the high-low method,fixed costs and variable costs appear in the same cost equation.

Using account analysis,what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

An equation of a line for total costs is

Describe the scatter plot method.Discuss the advantages and disadvantages of using the scatter plot method.

The representation for total variable costs is

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

Which type of cost behavior is indicated by the following graph?

At Dwight Incorporated,total fixed and variable costs are $400,000 at a production level of 100,000 units.The company has total fixed costs of $225,000.The fixed cost per unit at a production level of 150,000 units is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters