Question 1

An example of a committed fixed cost is when a company signs a 10-year lease on an office building.

Accepted Answer

A) True 
 B)False

Question 2

Regression is a more precise method of estimating the fixed and variable components of a mixed cost than the high-low method or a scattergraph.

Accepted Answer

A) True 
 B)False

Question 3

Operating income = Sales revenue - Variable cost per

Accepted Answer

A) True 
 B)False

Question 4

Assume you are planning a spring break ski trip to Colorado.You are preparing a budget of your costs.You are staying at a lodge that has a special where the lodge charges you $2 for each ski lift ride.You believe you will ride the ski lift 40 times during the week,so you budget $80.The ski lift charge is an example of a

Accepted Answer

A) fixed cost. 
B) variable cost. 
C) mixed cost. 
D) step cost. 
A) fixed cost. 
B) variable cost. 
C) mixed cost. 
D) step cost.

Question 5

An example of a discretionary fixed cost is

Accepted Answer

A) research and development costs. 
B) lease on warehouse space. 
C) sales commissions. 
D) number of bolts used. 
A) research and development costs. 
B) lease on warehouse space. 
C) sales commissions. 
D) number of bolts used.

Question 6

International Imports is a merchandising firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total fixed costs for the firm are

Accepted Answer

A) $458,660. 
B) $404,700. 
C) $60,705. 
D) $53,960. 
A) $458,660. 
B) $404,700. 
C) $60,705. 
D) $53,960.

Question 7

A discretionary fixed cost

Accepted Answer

A) emains the same per unit regardless of the level of activity. 
B) increases as the level of activity increases. 
C) can be changed in the short run. 
D) can be changed over the long run. 
A) emains the same per unit regardless of the level of activity. 
B) increases as the level of activity increases. 
C) can be changed in the short run. 
D) can be changed over the long run.

Question 8

A 10 percent increase in sales volume will result in

Accepted Answer

A) a 10 percent decrease in per unit fixed cost. 
B) a 10 percent increase in total fixed cost. 
C) a 10 percent increase in per unit fixed cost. 
D) no change in total fixed cost. 
A) a 10 percent decrease in per unit fixed cost. 
B) a 10 percent increase in total fixed cost. 
C) a 10 percent increase in per unit fixed cost. 
D) no change in total fixed cost.

Question 9

A scattergraph is a simple graph that shows

Accepted Answer

A) total costs in relation to volume. 
B) the fixed portion of a total cost. 
C) the variable portion of a total cost. 
D) the point where revenue equals total costs. 
A) total costs in relation to volume. 
B) the fixed portion of a total cost. 
C) the variable portion of a total cost. 
D) the point where revenue equals total costs.

Question 10

In contrast to a variable cost

Accepted Answer

A) the total amount of a fixed cost does not change with activity level. 
B) the total amount of a fixed cost increases as activity increases. 
C) the per unit amount of a fixed cost does not change with activity level. 
D) the per 
A) the total amount of a fixed cost does not change with activity level. 
B) the total amount of a fixed cost increases as activity increases. 
C) the per unit amount of a fixed cost does not change with activity level. 
D) the per

Question 11

When managers talk about cost behavior,they are referring to the way in which total costs change in response to changes of the level of activity.List the four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis and give an example of each.

Accepted Answer

Variable cost - direct material Fixed co

Question 12

If activity level decreases,what happens to the total variable cost?

Accepted Answer

A) It decreases. 
B) It increases. 
C) It remains the same. 
D) It depends on how much the activity level increases. 
A) It decreases. 
B) It increases. 
C) It remains the same. 
D) It depends on how much the activity level increases.

Question 13

If activity level decreases,what happens to the

Accepted Answer

A) It decreases. 
B) It increases. 
C) It remains the same. 
D) It depends on how much the activity level increases. 
A) It decreases. 
B) It increases. 
C) It remains the same. 
D) It depends on how much the activity level increases.

Question 14

Which of the following is a characteristic of a fixed cost?

Accepted Answer

A) The total cost remains constant,regardless of changes in the level of activity. 
B) The cost per unit varies inversely with changes in the level of activity. 
C) Both that the total cost remains constant,regardless of changes in the level of activity and that the cost per unit varies inversely with changes in the level of activity. 
D) Neither that the total cost remains constant,regardless of changes in the level of activity nor that the cost per 
A) The total cost remains constant,regardless of changes in the level of activity. 
B) The cost per unit varies inversely with changes in the level of activity. 
C) Both that the total cost remains constant,regardless of changes in the level of activity and that the cost per unit varies inversely with changes in the level of activity. 
D) Neither that the total cost remains constant,regardless of changes in the level of activity nor that the cost per

Question 15

Since a mixed cost has both a fixed and a variable component,both the total cost and the

Accepted Answer

A) True 
 B)False

Question 16

Like the high-low method of estimating the fixed and variable components of a mixed cost,regression analysis uses a statistical technique that identifies the line of best fit.

Accepted Answer

A) True 
 B)False

Question 17

Determine the fixed cost given the following information: Highest level of activity - 880

Accepted Answer

A) $229 
B) $400 
C) $2,600 
D) $3,200 
A) $229 
B) $400 
C) $2,600 
D) $3,200

Question 18

Georgiana operates a nail salon.She is trying to plan her costs for the next month and is uncertain as to how to estimate those costs.Help her estimate next month's costs given the following information she collected,based on number of customers per month.   Georgiana wants to know what her total costs would be if she estimates 1,450 customers next month.

Accepted Answer

A) $2,240 
B) $6,832 
C) $6,996 
D) $4,756 
A) $2,240 
B) $6,832 
C) $6,996 
D) $4,756

Question 19

Complete each of the following contribution format income statements by supplying the missing numbers.

Accepted Answer

The answer of Complete each of the following contribution format...

Question 20

With a variable cost,as the level of activity decreases,the total cost remains the same.

Accepted Answer

A) True 
 B)False

An example of a committed fixed cost is when a company signs a 10-year lease on an office building.

Regression is a more precise method of estimating the fixed and variable components of a mixed cost than the high-low method or a scattergraph.

Operating income = Sales revenue - Variable cost per

An example of a discretionary fixed cost is

International Imports is a merchandising firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total fixed costs for the firm are

A discretionary fixed cost

A 10 percent increase in sales volume will result in

A scattergraph is a simple graph that shows

In contrast to a variable cost

When managers talk about cost behavior,they are referring to the way in which total costs change in response to changes of the level of activity.List the four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis and give an example of each.

If activity level decreases,what happens to the total variable cost?

If activity level decreases,what happens to the

Which of the following is a characteristic of a fixed cost?

Since a mixed cost has both a fixed and a variable component,both the total cost and the

Like the high-low method of estimating the fixed and variable components of a mixed cost,regression analysis uses a statistical technique that identifies the line of best fit.

Determine the fixed cost given the following information: Highest level of activity - 880

Complete each of the following contribution format income statements by supplying the missing numbers.

With a variable cost,as the level of activity decreases,the total cost remains the same.

Accounting As a Tool for Management

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Exam 2: Cost Behavior and Cost Estimation

An example of a committed fixed cost is when a company signs a 10-year lease on an office building.

Regression is a more precise method of estimating the fixed and variable components of a mixed cost than the high-low method or a scattergraph.

Operating income = Sales revenue - Variable cost per

An example of a discretionary fixed cost is

International Imports is a merchandising firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total fixed costs for the firm are

A discretionary fixed cost

A 10 percent increase in sales volume will result in

A scattergraph is a simple graph that shows

In contrast to a variable cost

When managers talk about cost behavior,they are referring to the way in which total costs change in response to changes of the level of activity.List the four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis and give an example of each.

If activity level decreases,what happens to the total variable cost?

If activity level decreases,what happens to the

Which of the following is a characteristic of a fixed cost?

Since a mixed cost has both a fixed and a variable component,both the total cost and the

Like the high-low method of estimating the fixed and variable components of a mixed cost,regression analysis uses a statistical technique that identifies the line of best fit.

Determine the fixed cost given the following information: Highest level of activity - 880

Complete each of the following contribution format income statements by supplying the missing numbers.

With a variable cost,as the level of activity decreases,the total cost remains the same.

Accounting As a Tool for Management

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters