Question 1

On a traditional income statement, sales revenue less cost of goods sold equals

Accepted Answer

A) gross profit. 
B) contribution margin. 
C) operating income. 
D) operating expenses. 
A) gross profit. 
B) contribution margin. 
C) operating income. 
D) operating expenses.

Question 2

By increasing ________, a manager can increase operating income under absorption costing.

Accepted Answer

A) variable costs 
B) fixed costs 
C) production 
D) leased assets 
A) variable costs 
B) fixed costs 
C) production 
D) leased assets

Question 3

Stanley's Bicycles store buys bicycles on average for $610 and sells them on average for $780. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays $1700 a month rent for his store, and also pays $8000 a month to his staff in addition to the commissions. Stanley sold 160 bicycles in June. If Stanley prepares a traditional income statement for the month of June, what would be his gross profit?

Accepted Answer

A) $222,400 
B) $27,200 
C) $97,600 
D) $124,800 
A) $222,400 
B) $27,200 
C) $97,600 
D) $124,800

Question 4

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

Accepted Answer

A) variable 
B) fixed 
C) mixed 
D) irrelevant 
A) variable 
B) fixed 
C) mixed 
D) irrelevant

Question 5

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 6

Which of the following represents the equation for total variable costs?

Accepted Answer

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

Question 7

The high-low method basically fits a line through the highest and lowest ________ points.

Accepted Answer

A) fixed cost 
B) variable cost 
C) volume 
D) none of the above 
A) fixed cost 
B) variable cost 
C) volume 
D) none of the above

Question 8

Valle Crucis Corporation wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):   What is the variable cost per machine hour (rounded to the nearest cent)?

Accepted Answer

A) $67.59 
B) $2,945.95 
C) $0.99 
D) $0.72 
A) $67.59 
B) $2,945.95 
C) $0.99 
D) $0.72

Question 9

All of the following are discretionary fixed costs except?

Accepted Answer

A) Property taxes 
B) Advertising 
C) Research and development 
D) Employee development 
A) Property taxes 
B) Advertising 
C) Research and development 
D) Employee development

Question 10

Total fixed costs for Randolph Manufacturing are $804,000. Total costs, including both fixed and variable, are $1,040,000 if 160,000 units are produced. The fixed cost per unit at 188,500 units would be closest to

Accepted Answer

A) $1.25/unit. 
B) $5.52/unit. 
C) $4.27/unit. 
D) $5.03/unit. 
A) $1.25/unit. 
B) $5.52/unit. 
C) $4.27/unit. 
D) $5.03/unit.

Question 11

Rent on a factory building would likely be classified as a fixed cost.

Accepted Answer

A) True 
 B)False

Question 12

Direct Call offers a calling plan that charges $10.00 per month plus $0.03 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 400 minutes?

Accepted Answer

A) $12.00 
B) $22.00 
C) $2.00 
D) $10.00 
A) $12.00 
B) $22.00 
C) $2.00 
D) $10.00

Question 13

In the equation y = $7.20x + $250,250,

Accepted Answer

A) $250,250 are the total variable costs. 
B) $250,250 are the total costs. 
C) $250,250 are the total fixed costs. 
D) $250,250 are the total overhead costs. 
A) $250,250 are the total variable costs. 
B) $250,250 are the total costs. 
C) $250,250 are the total fixed costs. 
D) $250,250 are the total overhead costs.

Question 14

The Maple Company has total fixed costs of $420,000. It also has $210,000 in total variable costs. These costs exist at a production level of 130,000 units. The fixed cost per unit is

Accepted Answer

A) $1.62 
B) $4.85 
C) $1.38 
D) $3.23 
A) $1.62 
B) $4.85 
C) $1.38 
D) $3.23

Question 15

The following data is related to sales and production of the Tarkio Corporation for last year.
   Required:
a. Prepare an income statement for last year using absorption costing.
b. Calculate the value of the ending inventory using absorption costing.
c. Prepare an income statement for last year using variable costing.
d. Calculate the value of the ending inventory using variable costing.

Accepted Answer

The answer of The following data is related to sales...

Question 16

Total mixed costs increase as volume increases because of the variable cost component.

Accepted Answer

A) True 
 B)False

Question 17

Total mixed costs at 45,000 units would be

Accepted Answer

A) $202,500. 
B) $246,500. 
C) $19,000. 
D) unknown. 
A) $202,500. 
B) $246,500. 
C) $19,000. 
D) unknown.

Question 18

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) $0.41 
B) $2.42 
C) $0.73 
D) $1.20 
A) $0.41 
B) $2.42 
C) $0.73 
D) $1.20

Question 19

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

Accepted Answer

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

Question 20

Board Games, Inc. makes board games. The following data pertains to the last six months:   Based on this data, what is the value of "v" in the equation y = vx + f?

Accepted Answer

A) $4.50 
B) $5.02 
C) $0.24 
D) $0.20 
A) $4.50 
B) $5.02 
C) $0.24 
D) $0.20

On a traditional income statement, sales revenue less cost of goods sold equals

By increasing ________, a manager can increase operating income under absorption costing.

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

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.

Which of the following represents the equation for total variable costs?

The high-low method basically fits a line through the highest and lowest ________ points.

All of the following are discretionary fixed costs except?

Total fixed costs for Randolph Manufacturing are $804,000. Total costs, including both fixed and variable, are $1,040,000 if 160,000 units are produced. The fixed cost per unit at 188,500 units would be closest to

Rent on a factory building would likely be classified as a fixed cost.

Direct Call offers a calling plan that charges $10.00 per month plus $0.03 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 400 minutes?

In the equation y = $7.20x + $250,250,

The Maple Company has total fixed costs of $420,000. It also has $210,000 in total variable costs. These costs exist at a production level of 130,000 units. The fixed cost per unit is

Total mixed costs increase as volume increases because of the variable cost component.

Total mixed costs at 45,000 units would be

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

Board Games, Inc. makes board games. The following data pertains to the last six months: Based on this data, what is the value of "v" in the equation y = vx + f?

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 Evalulation

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

On a traditional income statement, sales revenue less cost of goods sold equals

By increasing ________, a manager can increase operating income under absorption costing.

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

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.

Which of the following represents the equation for total variable costs?

The high-low method basically fits a line through the highest and lowest ________ points.

All of the following are discretionary fixed costs except?

Total fixed costs for Randolph Manufacturing are $804,000. Total costs, including both fixed and variable, are $1,040,000 if 160,000 units are produced. The fixed cost per unit at 188,500 units would be closest to

Rent on a factory building would likely be classified as a fixed cost.

Direct Call offers a calling plan that charges $10.00 per month plus $0.03 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 400 minutes?

In the equation y = $7.20x + $250,250,

The Maple Company has total fixed costs of $420,000. It also has $210,000 in total variable costs. These costs exist at a production level of 130,000 units. The fixed cost per unit is

Total mixed costs increase as volume increases because of the variable cost component.

Total mixed costs at 45,000 units would be

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

Board Games, Inc. makes board games. The following data pertains to the last six months: Based on this data, what is the value of "v" in the equation y = vx + f?

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters