Field Legal Services is trying to determine the variable and fixed elements of its service overhead.The following data have been collected from recent activity: $\begin{array} { l r r } &\text { Total Service Overhead}&\text { Cases Worked }\\ \text { March } & 22,900 & 112 \\ \text { April } & 20,800 & 98 \\ \text { May } & 26,400 & 138 \end{array}$ The formula for total service overhead costs is

A) $5,600 + $140 per case. B) $5,600 + $40 per case. C) $7,823 + $134.62 per case. D) $7,080 + $140 per case. A) $5,600 + $140 per case. B) $5,600 + $40 per case. C) $7,823 + $134.62 per case. D) $7,080 + $140 per case.

Using the high-low method and the information below,compute the monthly variable cost per telephone hour for SKP Corporation. \[\begin{array} { l l c } \text { Month } & \text { Telephone Hours Used } & \text { Telephone Expenses } \\ \text { April } & 100 & \$ 4,500 \\ \text { May } & 110 & 4,800 \\ \text { June } & 150 & 5,400 \end{array}\]

A) $18.00 B) $36.00 C) $34.64 D) $45.00 A) $18.00 B) $36.00 C) $34.64 D) $45.00

Manix Company has gathered the following data: \[\begin{array} { l r r r } & \text { Unit Sales Price } & \text { Unit Variable Costs } & \text { Unit Sale } \\ \text { Product 1 } & \$ 18.00 & \$ 10.00 & 24,500 \\ \text { Product 2 } & 27.00 & 17.00 & 17,500 \\ \text { Product 3 } & 35.00 & 28.00 & 28,000 \end{array}\] Fixed costs are $233,280.The weighted-average breakeven point is

A) 34,500 units. B) 28,800 units. C) 25,200 units. D) 29,900 units. A) 34,500 units. B) 28,800 units. C) 25,200 units. D) 29,900 units.

Exam 20: Cost Behavior Analysis

Native American Pottery expects to earn a profit of $95,000 in 20xx.The company manufactures ornamental ceramic tiles.Each lot of 100 blocks requires variable costs of $5.00 for direct materials,$3.50 for direct labor,and $4.50 for overhead.Total variable costs are thus $13 per lot.Fixed costs for 20xx are expected to be $130,000.Each hundred-block lot will sell for $33. a. Determine how many lots of ceramic tiles the company must sell to earn its targeted profit, and convert this amount to sales dollars. b. Compute breakeven sales in dollars. c. Explain the dollar difference between breakeven sales dollars and the sales dollars necessary to earn the targeted profit. Use the contribution margin as part of your explanation.

(Essay)

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Question 21

Any cost can be classified as either a variable cost or a fixed cost.

(True/False)

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Question 22

Retleb Manufacturing Company noticed that,during its busiest month of 20xx,maintenance costs totaled $15,400,resulting from the production of 32,000 units.During its slowest month,$12,600 in maintenance costs were incurred,resulting from the production of 24,000 units.Using the high-low method,what maintenance cost would the company expect to incur at a volume of 20,000 units?

(Multiple Choice)

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Question 23

Breakeven analysis adjusted for a profit factor

(Multiple Choice)

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Question 24

a.What is the formula for breakeven units? b.How is knowledge of the contribution margin of a product helpful? In your answer,explain two possible benefits of computing the contribution margin of a product.

(Essay)

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Question 25

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

(True/False)

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Question 26

A new product,an easy to store guitar stand,is being planned,with the following cost estimates: variable cost per unit,$9,and total fixed costs,$58,000.The projected sales price is $13 each. a. Using the contribution margin approach, compute the number of units that must be sold to break even. b. Using the same approach and assuming that fixed costs can be reduced by $8,000, how many units must be sold to produce a profit of $65,000? c. Given the original information and the projection that 50,000 units can be sold, compute the selling price that the producer must use to obtain a profit of $150,000.

(Essay)

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Question 27

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 28

Field Legal Services is trying to determine the variable and fixed elements of its service overhead.The following data have been collected from recent activity: Total Service Overhead Cases Worked March 22,900 112 April 20,800 98 May 26,400 138 The formula for total service overhead costs is

(Multiple Choice)

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Question 29

Which of the following statements is true regarding fixed and variable costs?

(Multiple Choice)

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Question 30

Using the high-low method and the information below,compute the monthly variable cost per telephone hour for SKP Corporation. Month Telephone Hours Used Telephone Expenses April 100 \ 4,500 May 110 4,800 June 150 5,400

(Multiple Choice)

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Question 31

Manix Company has gathered the following data: Unit Sales Price Unit Variable Costs Unit Sale Product 1 \ 18.00 \ 10.00 24,500 Product 2 27.00 17.00 17,500 Product 3 35.00 28.00 28,000 Fixed costs are $233,280.The weighted-average breakeven point is

(Multiple Choice)

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Question 32

Place the letter of the appropriate description beside the budget that it describes

Is prepared after the production budget has been completed and the desired ending direct materials inventory amount is known

Unit sales forecast

Can be determined as soon as the unit production budget has been completed and the labor rates are known

Production budget

The starting point of the budgeting process

Sales budget

Correct Answer:

Verified

Is prepared after the production budget has been completed and the desired ending direct materials inventory amount is known

Can be determined as soon as the unit production budget has been completed and the labor rates are known

The starting point of the budgeting process

Can be prepared as soon as the sales budget has been completed and is made up of period expenses that are both fixed and variable with sales

Has two purposes, one of which is computing the overhead rates for the forthcoming accounting period

Is determined from the unit sales forecast and unit selling prices

Influences the cash budget as well as the interest expense on the forecasted income statement and the Plant and Equipment account on the budgeted balance sheet

Is determined from the unit sales forecast and the desired change in the ending finished goods inventory

(Matching)

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Question 33

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 34

For profit planning purposes,the following equation is used: Target Sales Units = (FC + P)÷ CM per Unit.

(True/False)

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Question 35

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 36

Theoretical capacity reduced by normal and anticipated work stoppages is called

(Multiple Choice)

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Question 37

Walton's Warehouse reported sales of $640,000,a contribution margin of $8 per unit,fixed costs of $314,000,and a profit of $30,000.How many units did Walton's Warehouse sell?

(Multiple Choice)

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Question 38

The equation for finding the breakeven point may be written as

(Multiple Choice)

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Question 39

The following graphical breakeven analysis is for Nicronea's new line of desktop computers.Questions related to the graph should be answered in the spaces provided. a. Production at point J would be at a ____. b. The area depicting profitable operations is . c. The fixed costs area is within letters . d. The total revenue area is within letters _. e. The breakeven point for sales units is at letter . f. Letter A represents . g. The line H-B represents what C-V-P element? _. h. Total cost of operations is reflected in line ____.

(Essay)

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Question 40

Showing 21 - 40 of 168

Exam 20: Cost Behavior Analysis

Any cost can be classified as either a variable cost or a fixed cost.

Breakeven analysis adjusted for a profit factor

a.What is the formula for breakeven units? b.How is knowledge of the contribution margin of a product helpful? In your answer,explain two possible benefits of computing the contribution margin of a product.

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

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

Field Legal Services is trying to determine the variable and fixed elements of its service overhead.The following data have been collected from recent activity: Total Service Overhead Cases Worked March 22,900 112 April 20,800 98 May 26,400 138 The formula for total service overhead costs is

Which of the following statements is true regarding fixed and variable costs?

Using the high-low method and the information below,compute the monthly variable cost per telephone hour for SKP Corporation. Month Telephone Hours Used Telephone Expenses April 100 \ 4,500 May 110 4,800 June 150 5,400

Manix Company has gathered the following data: Unit Sales Price Unit Variable Costs Unit Sale Product 1 \ 18.00 \ 10.00 24,500 Product 2 27.00 17.00 17,500 Product 3 35.00 28.00 28,000 Fixed costs are $233,280.The weighted-average breakeven point is

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?

For profit planning purposes,the following equation is used: Target Sales Units = (FC + P)÷ CM per Unit.

Theoretical capacity reduced by normal and anticipated work stoppages is called

Walton's Warehouse reported sales of $640,000,a contribution margin of $8 per unit,fixed costs of $314,000,and a profit of $30,000.How many units did Walton's Warehouse sell?

The equation for finding the breakeven point may be written as

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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