Question 1

For planning, control, and decision-making purposes:

Accepted Answer

A) fixed costs should be converted to a per unit basis. 
B) discretionary fixed costs should be eliminated. 
C) variable costs should be ignored. 
D) mixed costs should be separated into their variable and fixed components. 
A) fixed costs should be converted to a per unit basis. 
B) discretionary fixed costs should be eliminated. 
C) variable costs should be ignored. 
D) mixed costs should be separated into their variable and fixed components. D

Question 2

Abbott Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is $38,000 and if direct materials are $23,000, the manufacturing overhead is:

Accepted Answer

A) $9,500 
B) $152,000 
C) $5,750 
D) $15,250 
A) $9,500 
B) $152,000 
C) $5,750 
D) $15,250 A

Question 3

The best estimate of the total variable cost per unit is:

Accepted Answer

A) $131.80 
B) $53.10 
C) $66.40 
D) $120.90 
A) $131.80 
B) $53.10 
C) $66.40 
D) $120.90 C

Question 4

The traditional format income statement provides managers with an income statement that clearly distinguishes between fixed and variable costs and therefore aids planning, control, and decision making.

Accepted Answer

A) True 
 B)False

Question 5

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 6

To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 33,600 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $14.54 
B) $15.00 
C) $15.63 
D) $15.32 
A) $14.54 
B) $15.00 
C) $15.63 
D) $15.32

Question 7

Using the high-low method of analysis, the variable cost per meal served in the cafeteria would be estimated to be:

Accepted Answer

A) $1.50 
B) $2.00 
C) $2.80 
D) $1.00 
A) $1.50 
B) $2.00 
C) $2.80 
D) $1.00

Question 8

Werner Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost. According to the cost formula, the variable cost per unit of activity is $2 per machine-hour. Total electrical power cost at the high level of activity was $9,400 and at the low level of activity was $9,000. If the high level of activity was 2,200 machine hours, then the low level of activity was:

Accepted Answer

A) 1,800 machine hours 
B) 1,900 machine hours 
C) 2,000 machine hours 
D) 1,700 machine hours 
A) 1,800 machine hours 
B) 1,900 machine hours 
C) 2,000 machine hours 
D) 1,700 machine hours

Question 9

A number of costs and measures of activity are listed below.   Required:
For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Accepted Answer

1. Cost of cement used to produce cinder

Question 10

Depreciation on manufacturing equipment is a product cost.

Accepted Answer

A) True 
 B)False

Question 11

Contribution margin equals revenue minus all fixed costs.

Accepted Answer

A) True 
 B)False

Question 12

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Accepted Answer

A) $172,000 
B) $33,000 
C) $80,000 
D) $94,000 
A) $172,000 
B) $33,000 
C) $80,000 
D) $94,000

Question 13

Country Charm Restaurant is open 24 hours a day and always has a fire going in the fireplace in the middle of its dining area. The cost of the firewood for this fire is fixed with respect to the number of meals served at the restaurant.

Accepted Answer

A) True 
 B)False

Question 14

Committed fixed costs represent organizational investments with a multi-year planning horizon that can't be significantly reduced even for short periods.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Using the high-low method, the estimate of the variable component of electrical cost per machine-hour is closest to:

Accepted Answer

A) $0.12 
B) $20.38 
C) $7.98 
D) $3.97 
A) $0.12 
B) $20.38 
C) $7.98 
D) $3.97

Question 17

In making the decision to buy the model 260 machine rather than the model 330 machine, the differential cost was:

Accepted Answer

A) $18,000 
B) $56,000 
C) $38,000 
D) $40,000 
A) $18,000 
B) $56,000 
C) $38,000 
D) $40,000

Question 18

The best estimate of the total contribution margin when 5,300 units are sold is:

Accepted Answer

A) $51,940 
B) $469,050 
C) $109,710 
D) $398,560 
A) $51,940 
B) $469,050 
C) $109,710 
D) $398,560

Question 19

In a manufacturing company, direct labor costs combined with direct materials costs are known as:

Accepted Answer

A) period costs. 
B) conversion costs. 
C) prime costs. 
D) opportunity costs. 
A) period costs. 
B) conversion costs. 
C) prime costs. 
D) opportunity costs.

Question 20

Bee Company's cost formula for total selling and administrative expenses, with "X" equal to the number of units sold would be:

Accepted Answer

A) Y = $123,200 + $4.80X 
B) Y = $123,200 + $6.80X 
C) Y = $275,000 + $4.80X 
D) Y = $166,200 + $6.80X 
A) Y = $123,200 + $4.80X 
B) Y = $123,200 + $6.80X 
C) Y = $275,000 + $4.80X 
D) Y = $166,200 + $6.80X

For planning, control, and decision-making purposes:

Abbott Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is $38,000 and if direct materials are $23,000, the manufacturing overhead is:

The best estimate of the total variable cost per unit is:

The traditional format income statement provides managers with an income statement that clearly distinguishes between fixed and variable costs and therefore aids planning, control, and decision making.

Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:

To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 33,600 units? (Assume that this sales volume is within the relevant range.)

Using the high-low method of analysis, the variable cost per meal served in the cafeteria would be estimated to be:

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Depreciation on manufacturing equipment is a product cost.

Contribution margin equals revenue minus all fixed costs.

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Country Charm Restaurant is open 24 hours a day and always has a fire going in the fireplace in the middle of its dining area. The cost of the firewood for this fire is fixed with respect to the number of meals served at the restaurant.

Committed fixed costs represent organizational investments with a multi-year planning horizon that can't be significantly reduced even for short periods.

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:

Using the high-low method, the estimate of the variable component of electrical cost per machine-hour is closest to:

In making the decision to buy the model 260 machine rather than the model 330 machine, the differential cost was:

The best estimate of the total contribution margin when 5,300 units are sold is:

In a manufacturing company, direct labor costs combined with direct materials costs are known as:

Bee Company's cost formula for total selling and administrative expenses, with "X" equal to the number of units sold would be:

Least-Squares Regression Computations

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

Filters

Exam 1: Managerial Accounting and Cost Concepts

For planning, control, and decision-making purposes:

Abbott Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is $38,000 and if direct materials are $23,000, the manufacturing overhead is:

The best estimate of the total variable cost per unit is:

The traditional format income statement provides managers with an income statement that clearly distinguishes between fixed and variable costs and therefore aids planning, control, and decision making.

Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:

To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 33,600 units? (Assume that this sales volume is within the relevant range.)

Using the high-low method of analysis, the variable cost per meal served in the cafeteria would be estimated to be:

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Depreciation on manufacturing equipment is a product cost.

Contribution margin equals revenue minus all fixed costs.

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Country Charm Restaurant is open 24 hours a day and always has a fire going in the fireplace in the middle of its dining area. The cost of the firewood for this fire is fixed with respect to the number of meals served at the restaurant.

Committed fixed costs represent organizational investments with a multi-year planning horizon that can't be significantly reduced even for short periods.

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:

Using the high-low method, the estimate of the variable component of electrical cost per machine-hour is closest to:

In making the decision to buy the model 260 machine rather than the model 330 machine, the differential cost was:

The best estimate of the total contribution margin when 5,300 units are sold is:

In a manufacturing company, direct labor costs combined with direct materials costs are known as:

Bee Company's cost formula for total selling and administrative expenses, with "X" equal to the number of units sold would be:

Least-Squares Regression Computations

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

Filters