Question 1

In the equation y = $7.20x + $790, "x" represents

Accepted Answer

A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above. 
A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above.

Question 2

It costs Homer's Manufacturing $0.65 to produce baseballs and Homer sells them for $5.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $17,000 a month rent for his factory and store, and also pays $78,000 a month to his staff in addition to the commissions. Homer sold 70,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his operating income?

Accepted Answer

A) $384,050 
B) $352,500 
C) $63,450 
D) $194,050 
A) $384,050 
B) $352,500 
C) $63,450 
D) $194,050

Question 3

The manager at Screaming Trees 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 processed was highest in July, when the total monthly overhead costs totaled $31,000 for 36,000 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 $25,000 for 24,000 yards of mulch processed. What is the fixed portion of the monthly overhead expenses?

Accepted Answer

A) $7000 
B) $13,000 
C) $18,000 
D) $25,000 
A) $7000 
B) $13,000 
C) $18,000 
D) $25,000

Question 4

Your boss wants you to analyze the relationship between the company's monthly operating costs and the current cost driver she has chosen. You run a regression analysis and receive the following information: Intercept Coefficient = 653,434
X Variable 1 Coefficient = 5.76
R-square = 0.3784
What is your company's monthly cost equation?

Accepted Answer

A) y = $653,434x + $5.76 
B) y = $0.38x + $653,434 
C) y = $5.76x + $653,434 
D) y = $0.38x + $576 
A) y = $653,434x + $5.76 
B) y = $0.38x + $653,434 
C) y = $5.76x + $653,434 
D) y = $0.38x + $576

Question 5

The fixed cost per unit does not always remain the same.

Accepted Answer

A) True 
 B)False

Question 6

Sales revenue less variable expenses equals contribution margin.

Accepted Answer

A) True 
 B)False

Question 7

Managers often approximate curvilinear costs and step costs as fixed costs.

Accepted Answer

A) True 
 B)False

Question 8

Total fixed costs at 45,000 units would be

Accepted Answer

A) $25,000. 
B) $176,000. 
C) $135,000. 
D) unknown. 
A) $25,000. 
B) $176,000. 
C) $135,000. 
D) unknown.

Question 9

If production increases by 25%, how will total fixed costs likely react?

Accepted Answer

A) Increase by 12.5% 
B) Increase by 25% 
C) Decrease by 25% 
D) Remain the same 
A) Increase by 12.5% 
B) Increase by 25% 
C) Decrease by 25% 
D) Remain the same

Question 10

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following represents the total cost equation?

Accepted Answer

A) y = vx - f 
B) y = fx + v 
C) y = f 
D) none of the above 
A) y = vx - f 
B) y = fx + v 
C) y = f 
D) none of the above

Question 12

When graphing total fixed costs, the cost line always begins at the origin.

Accepted Answer

A) True 
 B)False

Question 13

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months.   Using the high-low method, what will the total monthly manufacturing costs be if the company produces 9200 units?

Accepted Answer

A) $7,500 
B) $4,600 
C) $8,600 
D) $2,900 
A) $7,500 
B) $4,600 
C) $8,600 
D) $2,900

Question 14

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 15

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

Accepted Answer

A) the same as at 175,000 units. 
B) greater than at 175,000 units. 
C) less than at 175,000 units. 
D) dependent upon fixed costs per unit. 
A) the same as at 175,000 units. 
B) greater than at 175,000 units. 
C) less than at 175,000 units. 
D) dependent upon fixed costs per unit.

Question 16

In the equation y = $11.75x + $550,

Accepted Answer

A) $550 are the total step costs. 
B) $550 are the total overhead costs. 
C) $550 are the total variable costs. 
D) $550 are the total fixed costs. 
A) $550 are the total step costs. 
B) $550 are the total overhead costs. 
C) $550 are the total variable costs. 
D) $550 are the total fixed costs.

Question 17

Total fixed costs for Toys and Trinkets Incorporated are $85,000. Total costs, including both fixed and variable, are $205,000 if 271,000 units are produced. The total variable costs at a level of 280,000 units would be

Accepted Answer

A) $123,985 
B) $211,808 
C) $87,823 
D) $299,631 
A) $123,985 
B) $211,808 
C) $87,823 
D) $299,631

Question 18

Total fixed costs for Taylor Incorporated are $260,000. Total costs, including both fixed and variable, are $500,000 if 156,000 units are produced. The variable cost per unit is

Accepted Answer

A) $4.87/unit. 
B) $1.54/unit. 
C) $3.21/unit. 
D) $1.67/unit. 
A) $4.87/unit. 
B) $1.54/unit. 
C) $3.21/unit. 
D) $1.67/unit.

Question 19

Snowy Mountain Company has the following selected data for the past year:
   There were no units in beginning inventory.
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 Snowy Mountain Company has the following selected...

Question 20

Variable costs are described by which of the following statements?

Accepted Answer

A) They vary per unit of output. 
B) They are fixed in total. 
C) They are fixed per unit and vary in total. 
D) They decrease per unit as production volume increases. 
A) They vary per unit of output. 
B) They are fixed in total. 
C) They are fixed per unit and vary in total. 
D) They decrease per unit as production volume increases.

In the equation y = $7.20x + $790, "x" represents

The fixed cost per unit does not always remain the same.

Sales revenue less variable expenses equals contribution margin.

Managers often approximate curvilinear costs and step costs as fixed costs.

Total fixed costs at 45,000 units would be

If production increases by 25%, how will total fixed costs likely react?

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

Which of the following represents the total cost equation?

When graphing total fixed costs, the cost line always begins at the origin.

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method, what will the total monthly manufacturing costs be if the company produces 9200 units?

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

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

In the equation y = $11.75x + $550,

Total fixed costs for Toys and Trinkets Incorporated are $85,000. Total costs, including both fixed and variable, are $205,000 if 271,000 units are produced. The total variable costs at a level of 280,000 units would be

Total fixed costs for Taylor Incorporated are $260,000. Total costs, including both fixed and variable, are $500,000 if 156,000 units are produced. The variable cost per unit is

Variable costs are described by which of the following statements?

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

In the equation y = $7.20x + $790, "x" represents

The fixed cost per unit does not always remain the same.

Sales revenue less variable expenses equals contribution margin.

Managers often approximate curvilinear costs and step costs as fixed costs.

Total fixed costs at 45,000 units would be

If production increases by 25%, how will total fixed costs likely react?

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

Which of the following represents the total cost equation?

When graphing total fixed costs, the cost line always begins at the origin.

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method, what will the total monthly manufacturing costs be if the company produces 9200 units?

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

George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $525,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 300,000 units is

In the equation y = $11.75x + $550,

Total fixed costs for Toys and Trinkets Incorporated are $85,000. Total costs, including both fixed and variable, are $205,000 if 271,000 units are produced. The total variable costs at a level of 280,000 units would be

Total fixed costs for Taylor Incorporated are $260,000. Total costs, including both fixed and variable, are $500,000 if 156,000 units are produced. The variable cost per unit is

Variable costs are described by which of the following statements?

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