Question 1

Total costs for Watson & Company at 100,000 units are $350,000,while total fixed costs are $150,000.The total variable costs at a level of 200,000 units would be:

Accepted Answer

A) $700,000. 
B) $175,000. 
C) $400,000. 
D) $300,000. 
A) $700,000. 
B) $175,000. 
C) $400,000. 
D) $300,000.

Question 2

Wendell's Bicycles store buys bicycles on average for $500 and sells them on average for $800.He pays a sales commission of 10% of sales revenue to his sales staff.Wendell pays $1,500 a month rent for his store,and also pays $3,000 a month to his staff in addition to the commissions.Wendell sold 100 bicycles in June.
-If Wendell prepares a traditional income statement for the month of June,what would be his operating income?

Accepted Answer

A) $17,500 
B) $80,000 
C) $30,000 
D) $42,500 
A) $17,500 
B) $80,000 
C) $30,000 
D) $42,500

Question 3

Selected financial data for Flash Corporation follows for a production level of 100,000 units:
 $$\begin{array} { | l | r | } 
\hline \text { Total fixed costs } & \$ 400,000 \
\hline \text { Total costs (fixed and variable) } & \$ 500,000 \
\hline
\end{array}$$ a.Calculate the variable cost per unit.
b.If Flash Corporation makes 80,000 units,calculate the fixed cost per unit.
c.If Flash Corporation makes 150,000 units,calculate the total variable costs.
d.If Flash Corporation makes 200,000 units,calculate the total costs.

Accepted Answer

\[\begin{array} { | l | c | } 
\hline \t

Question 4

Contribution margin income statements organize costs by behavior rather than by function.

Accepted Answer

A) True 
 B)False

Question 5

Using account analysis,what type of cost is the purchase of a cup of coffee on the way to school?

Accepted Answer

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

Question 6

If a company's overhead cost equation is y = $9.90x + $120,014.The "x" is:

Accepted Answer

A) total overhead costs. 
B) total fixed costs. 
C) the cost driver in units. 
D) the variable costs. 
A) total overhead costs. 
B) total fixed costs. 
C) the cost driver in units. 
D) the variable costs.

Question 7

Crystal Clear Water Hauling wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area.It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs.Crystal Clear Water Hauling has the following data available. $$\begin{array} { | l | c | c | } 
\hline \text { Month } & \text { Miles driven } & \text { Total operating costs } \
\hline \text { January } & 15,900 & \$ 27,500 \
\hline \text { February } & 17,300 & \$ 29,910 \
\hline \text { March } & 18,500 & \$ 29,830 \
\hline \text { April } & 16,100 & \$ 28,600 \
\hline \text { May } & 17,100 & \$ 28,800 \
\hline \text { June } & 15,500 & \$ 26,830 \
\hline
\end{array}$$
- Using the high-low method,the fixed costs in a month are:

Accepted Answer

A) $ 3,000. 
B) $11,330. 
C) $18,500. 
D) $56,660. 
A) $ 3,000. 
B) $11,330. 
C) $18,500. 
D) $56,660.

Question 8

The contribution margin income statement presents _________ below 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 variable expenses 
D) all fixed expenses 
A) only variable expenses relating to selling and administrative activities 
B) only fixed expenses relating to selling and administrative activities 
C) all variable expenses 
D) all fixed expenses

Question 9

Vanco Industries 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) $ 143.98 
B) $2,413.21 
C) $ 0.90 
D) $ 0.98 
A) $ 143.98 
B) $2,413.21 
C) $ 0.90 
D) $ 0.98

Question 10

Flavio'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.Flavio's general ledger accounts indicate the following for the year.The front desk staff wages expense remains the same throughout the year. $$\begin{array} { | l | l | l | l | } 
\hline \text { Account } & \text { Amount } & \text { Account } & \text { Amount } \
\hline \text { Membership revenue } & \$ 125,000 & \text { Personal trainer wages expense } & ? \
\hline \text { Persunal training revenue } & \$ 60,000 & \text { Space rental expense } & \$ 12,000 \
\hline \text { Product sales } & \$ 65,000 & \text { Straight line depreciation expense } & \$ 6,000 \
\hline \text { Cost of product sold } & \$ 40,000 & \text { Rental insurance expense } & \$ 3,000 \
\hline \text { Frant desk staff wages expense } & \$ 12,000 & & \
\hline
\end{array}$$ 
-If a contribution margin income statement is prepared for the year,what is the contribution margin?

Accepted Answer

A) $ 70,000 
B) $180,000 
C) $250,000 
D) $320,000 
A) $ 70,000 
B) $180,000 
C) $250,000 
D) $320,000

Question 11

The fixed cost per unit of activity varies inversely with changes in volume.

Accepted Answer

A) True 
 B)False

Question 12

In the equation: y = vx + f,what term represents the fixed cost component?

Accepted Answer

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

Question 13

Wendell's Bicycles store buys bicycles on average for $500 and sells them on average for $800.He pays a sales commission of 10% of sales revenue to his sales staff.Wendell pays $1,500 a month rent for his store,and also pays $3,000 a month to his staff in addition to the commissions.Wendell sold 100 bicycles in June.
-If Wendell prepares a contribution margin income statement for the month of June,what would be his contribution margin?

Accepted Answer

A) $ 80,000 
B) $ 22,000 
C) $138,000 
D) $ 58,000 
A) $ 80,000 
B) $ 22,000 
C) $138,000 
D) $ 58,000

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

To follow is information about the units produced and total manufacturing costs for Snow Enterprises for the past six months. $$\begin{array} { | l | c | c | } 
\hline \text { Month } & \text { Number of units produced } & \text { Total manufacturing costs } \
\hline \text { January } & 7,940 & \$ 5,900 \
\hline \text { February } & 7,500 & \$ 5,460 \
\hline \text { March } & 6,400 & \$ 5,000 \
\hline \text { April } & 6,600 & \$ 5,500 \
\hline \text { May } & 4,740 & \$ 5,100 \
\hline \text { June } & 7,800 & \$ 5,840 \
\hline
\end{array}$$
- Using the high-low method,what is the variable cost per unit?

Accepted Answer

A) $0.74 
B) $0.25 
C) $1.08 
D) $4.00 
A) $0.74 
B) $0.25 
C) $1.08 
D) $4.00

Question 16

Fresno Home Oil Services wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area.It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs.Fresno Home Oil Services has the following data available. $$\begin{array} { | l | c | c | } 
\hline \text { Month } & \text { Miles driven } & \text { Total operating costs } \
\hline \text { January } & 15,900 & \$ 9,000 \
\hline \text { February } & 17,300 & \$ 9,860 \
\hline \text { March } & 14,500 & \$ 8,600 \
\hline \text { April } & 16,100 & \$ 8,800 \
\hline \text { May } & 17,100 & \$ 8,600 \
\hline \text { June } & 15,500 & \$ 8,100 \
\hline
\end{array}$$ Assume Fresno Home Oil Services uses the high-low method to determine its operating cost equation and earns $0.50 per mile for 18,000 miles.
-What would its contribution margin be for a month if Fresno Home Oil Services prepared a contribution margin income statement for the month?

Accepted Answer

A) $ 900 
B) $17,100 
C) $ 9,000 
D) $ 8,100 
A) $ 900 
B) $17,100 
C) $ 9,000 
D) $ 8,100

Question 17

GAAP allows companies to use ________________ for external reporting purposes.

Accepted Answer

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

Question 18

A regression equation's variable cost per unit is represented by the_____________ on the regression analysis output.

Accepted Answer

A) Intercept coefficient 
B) X variable 1 coefficient 
C) R-square 
D) R 
E) Residual 
A) Intercept coefficient 
B) X variable 1 coefficient 
C) R-square 
D) R 
E) Residual

Question 19

A scatter plot helps managers visualize the relationship between historical costs and volume.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following does NOT appear on an income statement prepared using variable costing?

Accepted Answer

A) Gross margin 
B) Contribution margin 
C) Fixed production costs 
D) Variable production costs 
A) Gross margin 
B) Contribution margin 
C) Fixed production costs 
D) Variable production costs

Total costs for Watson & Company at 100,000 units are $350,000,while total fixed costs are $150,000.The total variable costs at a level of 200,000 units would be:

Contribution margin income statements organize costs by behavior rather than by function.

Using account analysis,what type of cost is the purchase of a cup of coffee on the way to school?

If a company's overhead cost equation is y = $9.90x + $120,014.The "x" is:

The contribution margin income statement presents _________ below the contribution margin line.

The fixed cost per unit of activity varies inversely with changes in volume.

In the equation: y = vx + f,what term represents the fixed cost component?

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

GAAP allows companies to use ________________ for external reporting purposes.

A regression equation's variable cost per unit is represented by the_____________ on the regression analysis output.

A scatter plot helps managers visualize the relationship between historical costs and volume.

Which of the following does NOT appear on an income statement prepared using variable costing?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 6: Cost Behavior

Total costs for Watson & Company at 100,000 units are $350,000,while total fixed costs are $150,000.The total variable costs at a level of 200,000 units would be:

Contribution margin income statements organize costs by behavior rather than by function.

Using account analysis,what type of cost is the purchase of a cup of coffee on the way to school?

If a company's overhead cost equation is y = $9.90x + $120,014.The "x" is:

The contribution margin income statement presents _________ below the contribution margin line.

The fixed cost per unit of activity varies inversely with changes in volume.

In the equation: y = vx + f,what term represents the fixed cost component?

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

GAAP allows companies to use ________________ for external reporting purposes.

A regression equation's variable cost per unit is represented by the_____________ on the regression analysis output.

A scatter plot helps managers visualize the relationship between historical costs and volume.

Which of the following does NOT appear on an income statement prepared using variable costing?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Filters