Listed below are selected costs of sports car manufacturer at a production level of 4,000 cars.(a)Identify three fixed costs.(b)Support your answer by illustrating the cost behavior pattern per unit and in total as the annual volume of motorcycles produced increases from 4,000 cars to 8,000 cars for one fixed cost.(Note: The production increase is within the relevant range.) $\begin{array}{lr} \text { Monthly machine rental charge } & \$ 8,000 \\ \text { Monthly insurance premiums on the plant } & 800 \\ \text { Sports car tire cost (per tire) } & 100\\ \text { Salaried employees' weekly payroll cost }&51,000\\ \text { Manufacturing hourly employees' weekly payroll}&88,000\\ \text { Depreciation on the equipment for the month}&6,000\\ \text { Car battery (one battery)}&70 \end{array}$

a.The student may select any three of th

Lakeside has gathered the following data in order to calculate the weighted-average contribution margin: \[\begin{array} { r r r r } & \text { Unit Sales Price } & \text { Unit Variable Costs } & \text { Unit Sales } \\ \text { Product A } & \$ 150 & \$ 100 & 8,000 \\ \text { Product B } & 100 & 60 & 2,000 \end{array}\] Fixed costs are $480,000. The weighted-average contribution margin is

A) $42. B) $45. C) $48. D) $90. A) $42. B) $45. C) $48. D) $90.

Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month.Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under this lease. \[\begin{array} { l r r } \text { Month } & \text { Machine Hours } & \text { Total Cost } \\ 7 & 6,300 & \$ 58,200 \\ 8 & 4,400 & 49,935 \\ 9 & 4,700 & 52,390 \\ 10 & 5,200 & 54,440 \\ 11 & 5,600 & 56,620 \\ 12 & 5,000 & 53,800 \\ \end{array}\] You are to provide information for planning on the variable and fixed cost elements in this lease.Use the high-low method to (a)determine the variable cost per machine hour and (b)compute the fixed and variable costs for months 7 and 8.

a. \[\begin{array} { l r r } & \text {

Exam 20: Cost Behavior Analysis

Listed below are selected costs of sports car manufacturer at a production level of 4,000 cars.(a)Identify three fixed costs.(b)Support your answer by illustrating the cost behavior pattern per unit and in total as the annual volume of motorcycles produced increases from 4,000 cars to 8,000 cars for one fixed cost.(Note: The production increase is within the relevant range.) Monthly machine rental charge \ 8,000 Monthly insurance premiums on the plant 800 Sports car tire cost (per tire) 100 Salaried employees' weekly payroll cost 51,000 Manufacturing hourly employees' weekly payroll 88,000 Depreciation on the equipment for the month 6,000 Car battery (one battery) 70

(Essay)

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Question 21

Christian Company's sales revenue for 20xx was $144,000.Christian's product sells for $5.50 and has a 30 percent contribution margin.Christian has fixed costs of $33,000. What is Christian Company's breakeven point in units?

(Multiple Choice)

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Question 22

Total costs that change in direct proportion to changes in productive output,or any other volume measure,are called variable costs.

(True/False)

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Question 23

The relevant range of activity is the range in which actual operations are likely to occur.

(True/False)

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Question 24

Lakeside has gathered the following data in order to calculate the weighted-average contribution margin: Unit Sales Price Unit Variable Costs Unit Sales Product A \ 150 \ 100 8,000 Product B 100 60 2,000 Fixed costs are $480,000. The weighted-average contribution margin is

(Multiple Choice)

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Question 25

Campground,Inc.,is considering the production and sale of propane lamps.Annual fixed costs associated with the project are expected to total $60,000.In addition,each lamp would sell for $12 and would require $7 in variable costs.Calculate (a)the breakeven point in units,(b)the breakeven point in dollars,(c)the number of lamps that must be sold to earn a profit of $120,000,and (d)the operating income or loss at a sales volume of 16,000 lamps.

(Essay)

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Question 26

The contribution margin equals total fixed costs at the breakeven point.

(True/False)

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Question 27

The objective of breakeven analysis is to find the level of activity at which sales revenue equals the sum of all variable and fixed costs.

(True/False)

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Question 28

Contribution margin is selling price minus unit fixed costs.

(True/False)

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Question 29

The equation that will provide the breakeven point in units (SP = selling price)is

(Multiple Choice)

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Question 30

Adding a desired profit level to breakeven computations will lower the number of sales units.

(True/False)

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Question 31

Contribution margin equals sales minus

(Multiple Choice)

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Question 32

In cost-volume-profit analysis,sales revenue is computed by multiplying units sold by the selling price per unit,and the targeted profit is projected by management.

(True/False)

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Question 33

Theoretical operating capacity is the level at which management expects to operate during a normal business environment.

(True/False)

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Question 34

A scatter diagram helps to determine if a linear relationship exists between a cost item and its related activity measure.

(True/False)

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Question 35

Cost behavior is the way prices are adjusted due to changes in costs.

(True/False)

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Question 36

The engineering method of separating costs is sometimes called a time and motion study.

(True/False)

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Question 37

Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month.Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under this lease. Month Machine Hours Total Cost 7 6,300 \ 58,200 8 4,400 49,935 9 4,700 52,390 10 5,200 54,440 11 5,600 56,620 12 5,000 53,800 You are to provide information for planning on the variable and fixed cost elements in this lease.Use the high-low method to (a)determine the variable cost per machine hour and (b)compute the fixed and variable costs for months 7 and 8.

(Essay)

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Question 38

The contribution margin income statement enables managers to view revenue and cost relationships on a per unit basis or as a percentage of sales.

(True/False)

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Question 39

Total variable and fixed costs will be the same regardless of how many units are produced.

(True/False)

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Question 40

Showing 21 - 40 of 168

Exam 20: Cost Behavior Analysis

Christian Company's sales revenue for 20xx was $144,000.Christian's product sells for $5.50 and has a 30 percent contribution margin.Christian has fixed costs of $33,000. What is Christian Company's breakeven point in units?

Total costs that change in direct proportion to changes in productive output,or any other volume measure,are called variable costs.

The relevant range of activity is the range in which actual operations are likely to occur.

Lakeside has gathered the following data in order to calculate the weighted-average contribution margin: Unit Sales Price Unit Variable Costs Unit Sales Product A \ 150 \ 100 8,000 Product B 100 60 2,000 Fixed costs are $480,000. The weighted-average contribution margin is

The contribution margin equals total fixed costs at the breakeven point.

The objective of breakeven analysis is to find the level of activity at which sales revenue equals the sum of all variable and fixed costs.

Contribution margin is selling price minus unit fixed costs.

The equation that will provide the breakeven point in units (SP = selling price)is

Adding a desired profit level to breakeven computations will lower the number of sales units.

Contribution margin equals sales minus

In cost-volume-profit analysis,sales revenue is computed by multiplying units sold by the selling price per unit,and the targeted profit is projected by management.

Theoretical operating capacity is the level at which management expects to operate during a normal business environment.

A scatter diagram helps to determine if a linear relationship exists between a cost item and its related activity measure.

Cost behavior is the way prices are adjusted due to changes in costs.

The engineering method of separating costs is sometimes called a time and motion study.

The contribution margin income statement enables managers to view revenue and cost relationships on a per unit basis or as a percentage of sales.

Total variable and fixed costs will be the same regardless of how many units are produced.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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