Exam 5: Cost Behavior

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. Bob anticipates selling 12,300 burgers during the month of July. What will be estimated total costs during July?

The primary difference between variable and absorption costing is the treatment of:

As production goes up, total variable costs ____.

Logan Inc. plans to double its rental space next year which will increase its fixed costs by 30% while variable costs will remain the same. Current year costs are as follows: If next year production is expected to be 13,500 units, estimated total costs will be:

Regression Analysis 1 You run a regression analysis and receive the following results: Refer to the Regression Analysis 1 above. To the nearest dollar, what would be the estimated total costs if 15,000 units were produced?

Cool Creams Cool Creams provided the following data for number of ice creams produced and its total overhead costs for past five months: Refer to the information provided for Cool Creams. Using the high/low method, what is the overhead cost equation?

Noble Inc. documented the number of units produced as well as maintenance costs for the past five months as follows: Noble uses the high/low method of estimating mixed costs. Required:

When using regression analysis to predict mixed cost behavior, which of the following would be the independent variable?

Chadwick Ski Lodge Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The following shows the budgeted housekeeping costs per month at various occupancies: Refer to the information provided for Chadwick Ski Lodge. The number of occupied rooms during the month of January is expected to be between 41 and 55 at all times. For the month of January, what type of cost does housekeeping effectively become?

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

In the cost equation, y = $500 + $5.40x, $5.40 represents:

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

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

Regression Analysis 1 You run a regression analysis and receive the following results: Refer to the Regression Analysis 1 above. What would be the equation to predict mixed cost behavior?

Portia's Salon is contemplating an increase in their rental space that will result in a before-tax rent increase of $14,500 per month. If their tax rate is 40%, what is the after-tax monthly increase in rent cost?

Bixby Inc. expects total costs to be $75,000 when 500 units are sold and the variable cost is $18 per unit. Bixby expects to sell 750 units in July. What will be expected total costs in July?

Manning Inc. is contemplating the rental of a special tool for $45,000 per month. If their tax rate is 40%, what is the after-tax monthly cost of renting the tool?

For each of the following statements, fill in the blank with either the word increase, decrease, or stay the same.

Compare and contrast the two methods that are used to predict mixed costs.

Tyson Manufacturing has the following information available for 2012: During 2012, Tyson produced 10,000 units out of which 9,100 units were sold for $50 each. Refer to the information provided for Tyson Manufacturing. What is the net operating income under variable costing?