Question 1

All fixed costs are listed ________ on a contribution margin income statement.

Accepted Answer

A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line 
A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line

Question 2

Maryland Incorporated produces toys. Total manufacturing costs are $360,000 when 50,000 toys are produced. Of this amount, total variable costs are $140,000. What are the total production costs when 85,000 toys are produced? (Assume the same relevant range for both production levels.)

Accepted Answer

A) $238,000 
B) $458,000 
C) $598,000 
D) $612,000 
A) $238,000 
B) $458,000 
C) $598,000 
D) $612,000

Question 3

When using the high-low method, the slope of the mixed cost line is fixed cost per unit.

Accepted Answer

A) True 
 B)False

Question 4

Pelicans Ice is a snow cone stand near the local park. To plan for the future, Pelicans Ice wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served.   The variable cost per snow cone using the high-low method is

Accepted Answer

A) $1.20 
B) $0.83 
C) $0.90 
D) $0.93 
A) $1.20 
B) $0.83 
C) $0.90 
D) $0.93

Question 5

Total mixed costs can be expressed as a combination of the fixed and sunk cost equations.

Accepted Answer

A) True 
 B)False

Question 6

For external reporting purposes, U.S. GAAP allows companies to use

Accepted Answer

A) either the traditional format or the contribution margin format. 
B) only the contribution margin format of the income statement. 
C) only the traditional format of the income statement. 
D) the variable costing format. 
A) either the traditional format or the contribution margin format. 
B) only the contribution margin format of the income statement. 
C) only the traditional format of the income statement. 
D) the variable costing format.

Question 7

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7800 bats to be $14. If $22,700 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 9000 bats will be (Round any intermediary calculations to the nearest cent.)

Accepted Answer

A) $16,800 
B) $109,200 
C) $126,000 
D) $122,510 
A) $16,800 
B) $109,200 
C) $126,000 
D) $122,510

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true concerning income if production exceeds units sold?

Accepted Answer

A) A higher operating income will result under a variable costing income statement. 
B) A lower operating income will result under an absorption costing income statement. 
C) A higher operating income will result under an absorption costing income statement. 
D) The same operating income will result under both a variable costing and absorption costing income statement. 
A) A higher operating income will result under a variable costing income statement. 
B) A lower operating income will result under an absorption costing income statement. 
C) A higher operating income will result under an absorption costing income statement. 
D) The same operating income will result under both a variable costing and absorption costing income statement.

Question 10

What term represents the total variable cost component 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 11

An R-square value over .80 generally indicates that the cost equation is not very reliable for predicting costs at other volumes within the relevant range.

Accepted Answer

A) True 
 B)False

Question 12

If the data points were randomly scattered, the R-square value would be closer to 0 than 1.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Total mixed cost is represented by which of the following equations?

Accepted Answer

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

Question 15

Cost B is a _______________ cost.

Accepted Answer

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

Question 16

Schrute Farm Sales buys portable generators for $460 and sells them for $720 He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $2000 a month rent for his store, and also pays $1700 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) $236,000 
B) $144,000 
C) $92,000 
D) $52,000 
A) $236,000 
B) $144,000 
C) $92,000 
D) $52,000

Question 17

An R-square statistic of 0 indicates a perfect level of correlation between costs and the cost driver.

Accepted Answer

A) True 
 B)False

Question 18

On a contribution margin income statement, sales revenue less variable expenses equals

Accepted Answer

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

Question 19

Variable costing considers fixed manufacturing costs as inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 20

The data points with the ________ should be selected for use in calculating the variable cost per unit and the total fixed costs when using the high-low method.

Accepted Answer

A) highest cost and the lowest cost 
B) highest volume and the lowest volume 
C) highest volume and the lowest cost 
D) highest cost and the lowest volume 
A) highest cost and the lowest cost 
B) highest volume and the lowest volume 
C) highest volume and the lowest cost 
D) highest cost and the lowest volume

All fixed costs are listed ________ on a contribution margin income statement.

Maryland Incorporated produces toys. Total manufacturing costs are $360,000 when 50,000 toys are produced. Of this amount, total variable costs are $140,000. What are the total production costs when 85,000 toys are produced? (Assume the same relevant range for both production levels.)

When using the high-low method, the slope of the mixed cost line is fixed cost per unit.

Total mixed costs can be expressed as a combination of the fixed and sunk cost equations.

For external reporting purposes, U.S. GAAP allows companies to use

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

Which of the following statements is true concerning income if production exceeds units sold?

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

An R-square value over .80 generally indicates that the cost equation is not very reliable for predicting costs at other volumes within the relevant range.

If the data points were randomly scattered, the R-square value would be closer to 0 than 1.

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

Total mixed cost is represented by which of the following equations?

Cost B is a _______________ cost.

An R-square statistic of 0 indicates a perfect level of correlation between costs and the cost driver.

On a contribution margin income statement, sales revenue less variable expenses equals

Variable costing considers fixed manufacturing costs as inventoriable product costs.

The data points with the ________ should be selected for use in calculating the variable cost per unit and the total fixed costs when using the high-low method.

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

All fixed costs are listed ________ on a contribution margin income statement.

Maryland Incorporated produces toys. Total manufacturing costs are $360,000 when 50,000 toys are produced. Of this amount, total variable costs are $140,000. What are the total production costs when 85,000 toys are produced? (Assume the same relevant range for both production levels.)

When using the high-low method, the slope of the mixed cost line is fixed cost per unit.

Total mixed costs can be expressed as a combination of the fixed and sunk cost equations.

For external reporting purposes, U.S. GAAP allows companies to use

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

Which of the following statements is true concerning income if production exceeds units sold?

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

An R-square value over .80 generally indicates that the cost equation is not very reliable for predicting costs at other volumes within the relevant range.

If the data points were randomly scattered, the R-square value would be closer to 0 than 1.

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

Total mixed cost is represented by which of the following equations?

Cost B is a _______________ cost.

An R-square statistic of 0 indicates a perfect level of correlation between costs and the cost driver.

On a contribution margin income statement, sales revenue less variable expenses equals

Variable costing considers fixed manufacturing costs as inventoriable product costs.

The data points with the ________ should be selected for use in calculating the variable cost per unit and the total fixed costs when using the high-low method.

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