Question 1

If a scatterplot 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 2

When using the high-low method, the variable cost per unit can be found as

Accepted Answer

A) rise over run. 
B) run over rise. 
C) change in volume over change in cost. 
D) vertical intercept. 
A) rise over run. 
B) run over rise. 
C) change in volume over change in cost. 
D) vertical intercept.

Question 3

Total variable costs at 45,000 units would be

Accepted Answer

A) $135,000. 
B) $202,500. 
C) $246,500. 
D) unknown. 
A) $135,000. 
B) $202,500. 
C) $246,500. 
D) unknown.

Question 4

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?

Accepted Answer

A) $284,000 
B) $217,000 
C) $324,000 
D) $140,000 
A) $284,000 
B) $217,000 
C) $324,000 
D) $140,000

Question 5

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

Accepted Answer

A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line. 
A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line.

Question 6

Mixed costs per unit decrease as volume increases because of the variable cost component.

Accepted Answer

A) True 
 B)False

Question 7

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 8

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

Accepted Answer

A) True 
 B)False

Question 9

When using the high-low method, the "high" point should be chosen as the data point with the highest cost (not the highest volume).

Accepted Answer

A) True 
 B)False

Question 10

KrisKros Company has a contribution margin per unit of $54. If 9000 more items are sold, and fixed expenses remain the same, the net change in operating income will be

Accepted Answer

A) $486,000 
B) -$486,000 
C) $9054 
D) $9000 
A) $486,000 
B) -$486,000 
C) $9054 
D) $9000

Question 11

Pelicans Ice is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served.   Using the high-low method, the monthly operating costs if Pelicans sells 12,000 snow cones in a month are

Accepted Answer

A) $13,000 
B) $12,000 
C) $20,000 
D) $1000 
A) $13,000 
B) $12,000 
C) $20,000 
D) $1000

Question 12

When preparing a scatterplot, how should the data be graphed?

Accepted Answer

A) Volume data on the y-axis 
B) Cost data on the x-axis 
C) Cost data on the y-axis 
D) Volume data on the z-axis 
A) Volume data on the y-axis 
B) Cost data on the x-axis 
C) Cost data on the y-axis 
D) Volume data on the z-axis

Question 13

When using the high-low method, the "low" point should be chosen as the data point with the lowest volume (not the lowest cost).

Accepted Answer

A) True 
 B)False

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

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

Accepted Answer

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

Question 16

Schrute Farm Sales buys portable generators for $460 and sells them for $750. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $7000 a month rent for his store, and also pays $1800 a month to his staff in addition to the commissions. Mr. Schrute sold 300 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin?

Accepted Answer

A) $374,250 
B) $149,250 
C) $75,750 
D) $225,000 
A) $374,250 
B) $149,250 
C) $75,750 
D) $225,000

Question 17

Match the term on the right with the appropriate definition provided on the right.

Accepted Answer

The answer of Match the term on the right with...

Question 18

Lily's Pastries produces cupcakes, which sell for $5.10 each. During the current month, Lily produced, but only sold 2700 cupcakes. The variable cost per cupcake was $3.40 and the sales commission per cupcake was $0.50. Total fixed manufacturing costs were $1700 and total fixed marketing and administrative costs were $900. What is the product cost per cupcake under absorption costing?

Accepted Answer

A) $3.93 
B) $5.63 
C) $5.10 
D) $3.40 
A) $3.93 
B) $5.63 
C) $5.10 
D) $3.40

Question 19

Maintenance costs at Seaside Manufacturing over the past six months are listed in the following table.   Using the high-low method, what would the monthly fixed maintenance cost be? (Round any intermediary calculations to the nearest cent.)

Accepted Answer

A) $2500 
B) $3000 
C) $13,500 
D) $29,000 
A) $2500 
B) $3000 
C) $13,500 
D) $29,000

Question 20

Total mixed 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

If a scatterplot 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.

When using the high-low method, the variable cost per unit can be found as

Total variable costs at 45,000 units would be

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

Mixed costs per unit decrease as volume increases because of the variable cost component.

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

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

When using the high-low method, the "high" point should be chosen as the data point with the highest cost (not the highest volume).

KrisKros Company has a contribution margin per unit of $54. If 9000 more items are sold, and fixed expenses remain the same, the net change in operating income will be

When preparing a scatterplot, how should the data be graphed?

When using the high-low method, the "low" point should be chosen as the data point with the lowest volume (not the lowest cost).

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

Match the term on the right with the appropriate definition provided on the right.

Maintenance costs at Seaside Manufacturing over the past six months are listed in the following table. Using the high-low method, what would the monthly fixed maintenance cost be? (Round any intermediary calculations to the nearest cent.)

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

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

If a scatterplot 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.

When using the high-low method, the variable cost per unit can be found as

Total variable costs at 45,000 units would be

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

Mixed costs per unit decrease as volume increases because of the variable cost component.

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

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

When using the high-low method, the "high" point should be chosen as the data point with the highest cost (not the highest volume).

KrisKros Company has a contribution margin per unit of $54. If 9000 more items are sold, and fixed expenses remain the same, the net change in operating income will be

When preparing a scatterplot, how should the data be graphed?

When using the high-low method, the "low" point should be chosen as the data point with the lowest volume (not the lowest cost).

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

Match the term on the right with the appropriate definition provided on the right.

Maintenance costs at Seaside Manufacturing over the past six months are listed in the following table. Using the high-low method, what would the monthly fixed maintenance cost be? (Round any intermediary calculations to the nearest cent.)

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

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