Exam 6: Cost Behavior

Joe,Jeff and Jerry Frank own Frank Brothers Farm,a seed company specializing in seed corn.At their weekly meeting they tried to calculate the portion of the farm's overhead expenses that is fixed and the portion that is variable.Over the past twelve months,the number of bushels of seed corn that has been sold reached its peak in May,when the total monthly overhead costs totaled $250,000 for 95,000 bushels of seed corn sold.The lowest number of bushels sold in the last twelve months occurred in December,when total overhead costs were $75,000 for 7,500 bushels sold.What was the variable cost per yard?

On a regression analysis output generated with Excel,the slope of a mixed cost line is represented by the

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,her forecast for 8,500 bats will be

With respect to total variable costs,which of the following statements is true?

The equation for total fixed costs is

Management has little or no control over

The contribution margin income statement presents ________ below the contribution margin line.

Jean's Fitness Club provides monthly memberships as well as personal training sessions.The personal trainers earn 50% of the revenue for all personal training sessions.The Fitness Club also sells nutrition products.Jean's general ledger accounts indicate the following for the year.The front desk staff wages expense remains the same throughout the year. If a contribution margin income statement is prepared for the year,what is the amount of total revenue?

If the data points in a scatter plot fall in a fairly straight line,it means that there is a fairly strong relationship between cost and volume.

Which of the following is a fixed cost?

If production increases by 30%,how will total variable costs likely react?

What variable represents the volume of activity in the equation: y = vx + f? (Assume v represents the variable cost per unit of activity. )

In the equation y = vx + f,the f represents the volume of activity.

On a regression analysis output generated with Excel,a regression equation's variable cost per unit is represented by the

Johnson Trucking Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area.It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs.Johnson Trucking Company has the following data available. Using the high-low method,the fixed costs in a month are

When performing account analysis,managers decide how to classify each account as a variable,fixed or mixed cost.

When preparing a traditional income statement,fixed costs are subtracted from gross profit to arrive at operating income.

A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed.What is the rationale behind this?

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

Neon Company manufactures widgets.The following data is related to sales and production of the widgets for last year. Using absorption costing,what is operating income for last year?