Question 1

Which of the following is most likely to be classified as a fixed cost?

Accepted Answer

A)  Factory utilities 
B)  Factory supplies 
C)  Direct labor 
D)  Factory insurance 
A)  Factory utilities 
B)  Factory supplies 
C)  Direct labor 
D)  Factory insurance D

Question 2

A manager is considering a special project. Corporate policy dictates that all special projects must generate an after-tax profit of $21,000. If the company expects costs related to the project to be equal to $43,000, what is the before-tax cash sales price that should be charged in order to adhere to corporate policy assuming the company has a tax rate of 30%?

Accepted Answer

Before-tax sales price needs to be $73,000.
After-tax profit = Before-tax profit ´ (1 - tax rate)
21,000 = (x - 43,000) ´ (1 - .30)
21,000 = .70(x - 43,000)
21,000 = .70x - 30,100
51,100 = .70x
x = $73,000

Question 3

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

Accepted Answer

A)  Variable costs 
B)  Relevant costs 
C)  Fixed costs 
D)  Period costs 
A)  Variable costs 
B)  Relevant costs 
C)  Fixed costs 
D)  Period costs C

Question 4

Which of the following descriptions would not be found on an income statement prepared using variable costing?

Accepted Answer

A)  Sales 
B)  Fixed costs 
C)  Cost of goods sold 
D)  Net operating income 
A)  Sales 
B)  Fixed costs 
C)  Cost of goods sold 
D)  Net operating income

Question 5

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Accepted Answer

A)  After-tax benefit = Pretax receipt ´ tax rate 
B)  After-tax benefit = Pretax receipt ´ (1 - tax rate) 
C)  After-tax benefit = Pretax receipt ´ (1 + tax rate) 
D)  After-tax benefit = Pretax receipt ¸ tax rate 
A)  After-tax benefit = Pretax receipt ´ tax rate 
B)  After-tax benefit = Pretax receipt ´ (1 - tax rate) 
C)  After-tax benefit = Pretax receipt ´ (1 + tax rate) 
D)  After-tax benefit = Pretax receipt ¸ tax rate

Question 6

Under absorption costing, which of the following is not considered a product cost?

Accepted Answer

A)  Direct labor 
B)  Fixed manufacturing overhead 
C)  Variable manufacturing overhead 
D)  Administrative costs 
A)  Direct labor 
B)  Fixed manufacturing overhead 
C)  Variable manufacturing overhead 
D)  Administrative costs

Question 7

Label whether each of the following costs is most likely fixed (F) or variable (V).

Accepted Answer

The answer of Label whether each of the following costs...

Question 8

Speedy Couriers Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows:
  Refer to the Speedy Couriers information above. Using the high/low method, if Speedy expects to drive 1,750 miles in June, what will be expected total vehicle costs?

Accepted Answer

A)  $3,825.00 
B)  $4,585.00 
C)  $8,087.50 
D)  $3,855.00 
A)  $3,825.00 
B)  $4,585.00 
C)  $8,087.50 
D)  $3,855.00

Question 9

Bob's Burgers Bob's Burgers currently produces and sells 12,000 burgers per month with the following costs:
  Bob has recently switched food suppliers and anticipates that variable costs will decrease by $0.35 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $8,000 per month.
Refer to the information provided for Bob's Burgers. What will be Bob's new cost equation?

Accepted Answer

A)  Total costs = $60,000 + $2.75x 
B)  Total costs = $60,000 + $2.05x 
C)  Total costs = $8,000 + $0.35x 
D)  Total costs = $52,000 + $2.05x 
A)  Total costs = $60,000 + $2.75x 
B)  Total costs = $60,000 + $2.05x 
C)  Total costs = $8,000 + $0.35x 
D)  Total costs = $52,000 + $2.05x

Question 10

George's Ice Cream Shop believes most of its utilities costs are mixed. George has collected the following data on gallons of ice cream used and related utilities costs for the past six months:   George has run a regression analysis on the above information and has come up with the following data:
  Using regression analysis, which of the following formulas would be the best predictor of total estimated mixed costs?

Accepted Answer

A)  Y = $300 + $20x 
B)  Y = $329.50 + $19.57x 
C)  Y = $900 + $30x 
D)  Y = $19.56 + $329.50x 
A)  Y = $300 + $20x 
B)  Y = $329.50 + $19.57x 
C)  Y = $900 + $30x 
D)  Y = $19.56 + $329.50x

Question 11

When using the high/low method, the change in cost divided by the change in volume is:

Accepted Answer

A)  the fixed cost per unit. 
B)  the mixed cost per unit. 
C)  the variable cost per unit. 
D)  the total cost per unit. 
A)  the fixed cost per unit. 
B)  the mixed cost per unit. 
C)  the variable cost per unit. 
D)  the total cost per unit.

Question 12

When comparing a "pre-tax cost" and an "after-tax cost", which of the following is true?

Accepted Answer

A)  The after-tax cost will be greater than the pretax cost. 
B)  They will be the same amount. 
C)  The pre-tax cost will be greater than the after-tax cost. 
D)  The higher the tax rate, the lower the difference in the amount between them. 
A)  The after-tax cost will be greater than the pretax cost. 
B)  They will be the same amount. 
C)  The pre-tax cost will be greater than the after-tax cost. 
D)  The higher the tax rate, the lower the difference in the amount between them.

Question 13

As production decreases, fixed costs per unit ____.

Accepted Answer

A)  increase 
B)  decrease 
C)  remain the same 
D)  cannot be predicted 
A)  increase 
B)  decrease 
C)  remain the same 
D)  cannot be predicted

Question 14

You are given the following cost and volume information:   Which type of cost is given?

Accepted Answer

A)  Variable 
B)  Fixed 
C)  Mixed 
D)  Cannot be determined 
A)  Variable 
B)  Fixed 
C)  Mixed 
D)  Cannot be determined

Question 15

As production increases, variable costs per unit ____.

Accepted Answer

A)  increase 
B)  decrease 
C)  remain the same 
D)  can not be predicted 
A)  increase 
B)  decrease 
C)  remain the same 
D)  can not be predicted

Question 16

Under variable costing, which of the following is not considered a product cost?

Accepted Answer

A)  Direct materials 
B)  Direct labor 
C)  Fixed manufacturing overhead 
D)  Variable manufacturing overhead 
A)  Direct materials 
B)  Direct labor 
C)  Fixed manufacturing overhead 
D)  Variable manufacturing overhead

Question 17

Label whether each of the following costs is most likely fixed (F) or variable (V).

Accepted Answer

The answer of Label whether each of the following costs...

Question 18

Jansen Inc. currently produces and sells 9,000 units per year with the following cost data:   Next year, Jansen plans to increase its advertising budget, which will increase fixed costs by 7%. With increased advertising, the company expects the number of units produced and sold to increase by 12%. Determine the budgeted total cost for next year.

Accepted Answer

A)  $70,500 
B)  $78,060 
C)  $78,585 
D)  $71,025 
A)  $70,500 
B)  $78,060 
C)  $78,585 
D)  $71,025

Question 19

You are trying to determine whether machine hours or direct labor dollars would be the best cost driver for overhead costs. You run two regression analyses and obtain the following results:
     Which variable would be the best selection for a cost driver and why?

Accepted Answer

Direct labor dollars would be the best c

Question 20

Regression Analysis 2 You run a regression analysis and receive the following results:
  Refer to the Regression Analysis 2 above. To the nearest dollar, what would be the estimated total costs if 500 units were produced?

Accepted Answer

A)  $ 544 
B)  $4,236 
C)  $3,692 
D)  $3,147 
A)  $ 544 
B)  $4,236 
C)  $3,692 
D)  $3,147

Which of the following is most likely to be classified as a fixed cost?

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

Which of the following descriptions would not be found on an income statement prepared using variable costing?

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Under absorption costing, which of the following is not considered a product cost?

Label whether each of the following costs is most likely fixed (F) or variable (V).

Speedy Couriers Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows: Refer to the Speedy Couriers information above. Using the high/low method, if Speedy expects to drive 1,750 miles in June, what will be expected total vehicle costs?

When using the high/low method, the change in cost divided by the change in volume is:

When comparing a "pre-tax cost" and an "after-tax cost", which of the following is true?

As production decreases, fixed costs per unit ____.

You are given the following cost and volume information: Which type of cost is given?

As production increases, variable costs per unit ____.

Under variable costing, which of the following is not considered a product cost?

Label whether each of the following costs is most likely fixed (F) or variable (V).

You are trying to determine whether machine hours or direct labor dollars would be the best cost driver for overhead costs. You run two regression analyses and obtain the following results: Which variable would be the best selection for a cost driver and why?

Regression Analysis 2 You run a regression analysis and receive the following results: Refer to the Regression Analysis 2 above. To the nearest dollar, what would be the estimated total costs if 500 units were produced?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

Filters

Exam 5: Cost Behavior

Which of the following is most likely to be classified as a fixed cost?

____ are costs that do not change in total when production volume increases or decreases within the relevant range.

Which of the following descriptions would not be found on an income statement prepared using variable costing?

The after-tax benefit of a taxable cash receipt can be calculated as follows:

Under absorption costing, which of the following is not considered a product cost?

Label whether each of the following costs is most likely fixed (F) or variable (V).

Speedy Couriers Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows: Refer to the Speedy Couriers information above. Using the high/low method, if Speedy expects to drive 1,750 miles in June, what will be expected total vehicle costs?

When using the high/low method, the change in cost divided by the change in volume is:

When comparing a "pre-tax cost" and an "after-tax cost", which of the following is true?

As production decreases, fixed costs per unit ____.

You are given the following cost and volume information: Which type of cost is given?

As production increases, variable costs per unit ____.

Under variable costing, which of the following is not considered a product cost?

Label whether each of the following costs is most likely fixed (F) or variable (V).

You are trying to determine whether machine hours or direct labor dollars would be the best cost driver for overhead costs. You run two regression analyses and obtain the following results: Which variable would be the best selection for a cost driver and why?

Regression Analysis 2 You run a regression analysis and receive the following results: Refer to the Regression Analysis 2 above. To the nearest dollar, what would be the estimated total costs if 500 units were produced?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

Filters