Question 1

Total variable cost is expected to remain unchanged as activity changes within the relevant range.

Accepted Answer

A) True 
 B)False

Question 2

Hadrana Corporation reports that at an activity level of 5,500 units, its total variable cost is $275,330 and its total fixed cost is $86,240. What would be the total variable cost at an activity level of 5,600 units? Assume that this level of activity is within the relevant range.

Accepted Answer

A) $275,330 
B) $361,570 
C) $87,808 
D) $280,336 
A) $275,330 
B) $361,570 
C) $87,808 
D) $280,336

Question 3

A soft drink bottler incurred the following factory utility cost: $3,936 for 800 cases bottled and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

Accepted Answer

A) $4.92 
B) $0.52 
C) $4.43 
D) $4.66 
A) $4.92 
B) $0.52 
C) $4.43 
D) $4.66

Question 4

Emerton Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 32,000 units, the lease cost was $716,800. To the nearest whole dollar, what should be the total lease cost at a sales volume of 30,900 units in a month? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $742,317 
B) $692,160 
C) $704,480 
D) $716,800 
A) $742,317 
B) $692,160 
C) $704,480 
D) $716,800

Question 5

A partial listing of costs incurred during December at Rooks Corporation appears below:   The total of the manufacturing overhead costs listed above for December is:

Accepted Answer

A) $30,000 
B) $82,000 
C) $647,000 
D) $340,000 
A) $30,000 
B) $82,000 
C) $647,000 
D) $340,000

Question 6

Rent on a factory building used in the production process would be classified as a product cost and as a fixed cost.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following companies would have the highest proportion of variable costs in its cost structure?

Accepted Answer

A) Public utility. 
B) Airline. 
C) Fast food outlet. 
D) Architectural firm. 
A) Public utility. 
B) Airline. 
C) Fast food outlet. 
D) Architectural firm.

Question 8

Inspection costs at one of Iuliano Corporation's factories are listed below:   Management believes that inspection cost is a mixed cost that depends on units produced. Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:

Accepted Answer

A) $16,210 
B) $7,746 
C) $15,761 
D) $16,111 
A) $16,210 
B) $7,746 
C) $15,761 
D) $16,111

Question 9

Direct labor is a part of prime cost, but not conversion cost.

Accepted Answer

A) True 
 B)False

Question 10

Nieman Inc., a local retailer, has provided the following data for the month of March:   The net operating income for March was:

Accepted Answer

A) $130,000 
B) $134,000 
C) $43,000 
D) $47,000 
A) $130,000 
B) $134,000 
C) $43,000 
D) $47,000

Question 11

Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains. Which of the following terms could be used to correctly describe the cost of the soap used to wash the denim cloth?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 12

Oaklis Company has provided the following data for maintenance cost:   Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to:

Accepted Answer

A) $24,000 per year; $2.30 per machine hour 
B) $6,000 per year; $1.80 per machine hour 
C) $6,000 per year; $2.30 per machine hour 
D) $24,000 per year; $1.80 per machine hour 
A) $24,000 per year; $2.30 per machine hour 
B) $6,000 per year; $1.80 per machine hour 
C) $6,000 per year; $2.30 per machine hour 
D) $24,000 per year; $1.80 per machine hour

Question 13

The contribution margin is the amount remaining from sales revenues after variable expenses have been deducted.

Accepted Answer

A) True 
 B)False

Question 14

Contribution margin means:

Accepted Answer

A) what remains from total sales after deducting fixed expenses. 
B) what remains from total sales after deducting cost of goods sold. 
C) the sum of cost of goods sold and variable expenses. 
D) what remains from total sales after deducting all variable expenses. 
A) what remains from total sales after deducting fixed expenses. 
B) what remains from total sales after deducting cost of goods sold. 
C) the sum of cost of goods sold and variable expenses. 
D) what remains from total sales after deducting all variable expenses.

Question 15

A partial listing of costs incurred during December at Rooks Corporation appears below:   The total of the period costs listed above for December is:

Accepted Answer

A) $82,000 
B) $340,000 
C) $389,000 
D) $307,000 
A) $82,000 
B) $340,000 
C) $389,000 
D) $307,000

Question 16

Gabat Inc. is a merchandising company. Last month the company's merchandise purchases totaled $67,000. The company's beginning merchandise inventory was $19,000 and its ending merchandise inventory was $22,000. What was the company's cost of goods sold for the month?

Accepted Answer

A) $108,000 
B) $67,000 
C) $64,000 
D) $70,000 
A) $108,000 
B) $67,000 
C) $64,000 
D) $70,000

Question 17

Depreciation on office equipment would be included in product costs.

Accepted Answer

A) True 
 B)False

Question 18

Farnor, Inc., would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last four months of operations.   Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to:

Accepted Answer

A) $53.46 
B) $0.00 
C) $3.40 
D) $48.00 
A) $53.46 
B) $0.00 
C) $3.40 
D) $48.00

Question 19

Comparative income statements for Tudor Retailing Company for the last two months are presented below:   If the Tudor Retailing Company uses the high-low method of analysis, the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

Accepted Answer

A) $34,500 
B) $17,000 
C) $27,000 
D) $22,000 
A) $34,500 
B) $17,000 
C) $27,000 
D) $22,000

Question 20

A partial listing of costs incurred at Gilhooly Corporation during September appears below:   The total of the product costs listed above for September is:

Accepted Answer

A) $59,000 
B) $366,000 
C) $669,000 
D) $303,000 
A) $59,000 
B) $366,000 
C) $669,000 
D) $303,000

Total variable cost is expected to remain unchanged as activity changes within the relevant range.

Hadrana Corporation reports that at an activity level of 5,500 units, its total variable cost is $275,330 and its total fixed cost is $86,240. What would be the total variable cost at an activity level of 5,600 units? Assume that this level of activity is within the relevant range.

A soft drink bottler incurred the following factory utility cost: $3,936 for 800 cases bottled and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the manufacturing overhead costs listed above for December is:

Rent on a factory building used in the production process would be classified as a product cost and as a fixed cost.

Which of the following companies would have the highest proportion of variable costs in its cost structure?

Inspection costs at one of Iuliano Corporation's factories are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:

Direct labor is a part of prime cost, but not conversion cost.

Nieman Inc., a local retailer, has provided the following data for the month of March: The net operating income for March was:

Oaklis Company has provided the following data for maintenance cost: Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to:

The contribution margin is the amount remaining from sales revenues after variable expenses have been deducted.

Contribution margin means:

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the period costs listed above for December is:

Gabat Inc. is a merchandising company. Last month the company's merchandise purchases totaled $67,000. The company's beginning merchandise inventory was $19,000 and its ending merchandise inventory was $22,000. What was the company's cost of goods sold for the month?

Depreciation on office equipment would be included in product costs.

Farnor, Inc., would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last four months of operations. Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis, the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the product costs listed above for September is:

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 1: Managerial Accounting and Cost Concepts

Total variable cost is expected to remain unchanged as activity changes within the relevant range.

Hadrana Corporation reports that at an activity level of 5,500 units, its total variable cost is $275,330 and its total fixed cost is $86,240. What would be the total variable cost at an activity level of 5,600 units? Assume that this level of activity is within the relevant range.

A soft drink bottler incurred the following factory utility cost: $3,936 for 800 cases bottled and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the manufacturing overhead costs listed above for December is:

Rent on a factory building used in the production process would be classified as a product cost and as a fixed cost.

Which of the following companies would have the highest proportion of variable costs in its cost structure?

Inspection costs at one of Iuliano Corporation's factories are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:

Direct labor is a part of prime cost, but not conversion cost.

Nieman Inc., a local retailer, has provided the following data for the month of March: The net operating income for March was:

Oaklis Company has provided the following data for maintenance cost: Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to:

The contribution margin is the amount remaining from sales revenues after variable expenses have been deducted.

Contribution margin means:

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the period costs listed above for December is:

Gabat Inc. is a merchandising company. Last month the company's merchandise purchases totaled $67,000. The company's beginning merchandise inventory was $19,000 and its ending merchandise inventory was $22,000. What was the company's cost of goods sold for the month?

Depreciation on office equipment would be included in product costs.

Farnor, Inc., would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last four months of operations. Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis, the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the product costs listed above for September is:

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters