Question 1

What are scatter plots useful for?

Accepted Answer

A) Determining the overall strength of the relationship between historical cost and volume 
B) Identifying potential outliers 
C) Both of the above 
D) Neither of the above 
A) Determining the overall strength of the relationship between historical cost and volume 
B) Identifying potential outliers 
C) Both of the above 
D) Neither of the above

Question 2

Schrute Farm Sales buys portable generators for $450 and sells them for $720.He pays a sales commission of 5% of sales revenue to his sales staff.Mr.Schrute pays $2,000 a month rent for his store,and also pays $1,700 a month to his staff in addition to the commissions.Mr.Schrute sold 200 generators in June.If Mr.Schrute prepares a traditional income statement for the month of June,what would be his gross profit?

Accepted Answer

A) $234,000 
B) $144,000 
C) $90,000 
D) $54,000 
A) $234,000 
B) $144,000 
C) $90,000 
D) $54,000

Question 3

Under variable costing,fixed manufacturing costs are treated as inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 4

Total mixed cost graphs slope upward but do not begin at the origin.

Accepted Answer

A) True 
 B)False

Question 5

How is operating income affected if the number of units sold exceeds the number of units produced?

Accepted Answer

A) Operating income would be higher under a variable costing income statement. 
B) Operating income would be lower under a variable costing income statement. 
C) Operating income would be higher under an absorption costing income statement. 
D) Operating income would be the same under both a variable costing and absorption costing income statement. 
A) Operating income would be higher under a variable costing income statement. 
B) Operating income would be lower under a variable costing income statement. 
C) Operating income would be higher under an absorption costing income statement. 
D) Operating income would be the same under both a variable costing and absorption costing income statement.

Question 6

The output from regression analysis generated in Excel gives us all of the following information except

Accepted Answer

A) intercept coefficient. 
B) highest and lowest data points × variable 1 coefficient. 
C) R-square. 
D) x variable 1 coefficient. 
A) intercept coefficient. 
B) highest and lowest data points × variable 1 coefficient. 
C) R-square. 
D) x variable 1 coefficient.

Question 7

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

Accepted Answer

The answer of What are three methods used to estimate...

Question 8

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 contribution margin income statement for the month of June,what would be his contribution margin?

Accepted Answer

A) $205,875 
B) $334,125 
C) $64,125 
D) $270,000 
A) $205,875 
B) $334,125 
C) $64,125 
D) $270,000

Question 9

For most businesses,annual straight line depreciation expense on the company's building is what type of cost?

Accepted Answer

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

Question 10

The following is information about the units produced and the total manufacturing costs for Rose's Rug Company for the past six months.
   
Rose's Rug Company uses the high-low method to estimate its costs.Answer the following questions:
a.What is the variable cost per unit?
b.What is the monthly fixed manufacturing cost?
c.Write the cost equation that could be used to predict Rose's Rug Company's total manufacturing costs.
d.What will the total monthly manufacturing costs be if the company produces 28,000 units?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& part c.

Question 11

Total fixed costs can be expressed as y = vx,where y = total variable cost,v = variable cost per unit of activity,and x = volume of activity.

Accepted Answer

A) True 
 B)False

Question 12

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

Accepted Answer

A) True 
 B)False

Question 13

Total variable costs change in direct proportion to changes in volume.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) only variable expenses relating to selling and administrative activities 
B) only fixed expenses relating to selling and administrative activities 
C) all fixed expenses 
D) all variable expenses 
A) only variable expenses relating to selling and administrative activities 
B) only fixed expenses relating to selling and administrative activities 
C) all fixed expenses 
D) all variable expenses

Question 15

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

Accepted Answer

A) They will decrease as production increases within the relevant range. 
B) They will increase as production decreases within the relevant range. 
C) They will decrease as production decreases within the relevant range. 
D) They will remain the same as production levels change within the relevant range. 
A) They will decrease as production increases within the relevant range. 
B) They will increase as production decreases within the relevant range. 
C) They will decrease as production decreases within the relevant range. 
D) They will remain the same as production levels change within the relevant range.

Question 16

The manager at Wheeling Mulch has been trying to calculate the portion of the company's overhead expenses that is fixed and the portion that is variable.Over the past twelve months,the number of yards of mulch processed was highest in July,when the total monthly overhead costs totaled $28,000 for 32,000 yards of mulch processed.The lowest number of yards of mulch processed in the last twelve months occurred in October,when total overhead costs were $26,000 for 28,000 yards of mulch processed.What was the variable cost per yard?

Accepted Answer

A) $0.50 
B) $2.00 
C) $0.88 
D) $0.93 
A) $0.50 
B) $2.00 
C) $0.88 
D) $0.93

Question 17

Variable costing considers fixed manufacturing costs as inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 18

When absorption costing is used and management bonuses are related to operating income,managers are more likely to

Accepted Answer

A) decrease inventory levels. 
B) increase inventory levels. 
C) keep inventory levels consistent. 
D) steal from the company. 
A) decrease inventory levels. 
B) increase inventory levels. 
C) keep inventory levels consistent. 
D) steal from the company.

Question 19

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.What is the total cost of producing 5,000 anchors?

Accepted Answer

A) $260,000 
B) $5,052 
C) $52.00 
D) $96 
A) $260,000 
B) $5,052 
C) $52.00 
D) $96

Question 20

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

Accepted Answer

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

What are scatter plots useful for?

Under variable costing,fixed manufacturing costs are treated as inventoriable product costs.

Total mixed cost graphs slope upward but do not begin at the origin.

How is operating income affected if the number of units sold exceeds the number of units produced?

The output from regression analysis generated in Excel gives us all of the following information except

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

For most businesses,annual straight line depreciation expense on the company's building is what type of cost?

Total fixed costs can be expressed as y = vx,where y = total variable cost,v = variable cost per unit of activity,and x = volume of activity.

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

Total variable costs change in direct proportion to changes in volume.

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

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

Variable costing considers fixed manufacturing costs as inventoriable product costs.

When absorption costing is used and management bonuses are related to operating income,managers are more likely to

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.What is the total cost of producing 5,000 anchors?

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

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 are scatter plots useful for?

Under variable costing,fixed manufacturing costs are treated as inventoriable product costs.

Total mixed cost graphs slope upward but do not begin at the origin.

How is operating income affected if the number of units sold exceeds the number of units produced?

The output from regression analysis generated in Excel gives us all of the following information except

What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?

For most businesses,annual straight line depreciation expense on the company's building is what type of cost?

Total fixed costs can be expressed as y = vx,where y = total variable cost,v = variable cost per unit of activity,and x = volume of activity.

The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.

Total variable costs change in direct proportion to changes in volume.

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

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

Variable costing considers fixed manufacturing costs as inventoriable product costs.

When absorption costing is used and management bonuses are related to operating income,managers are more likely to

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.What is the total cost of producing 5,000 anchors?

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

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