Question 1

Stewart Company is attempting to classify costs according to their cost behavior.Data concerning activity and costs are listed below: 
-The costs that Stewart Company would classify as mixed would be:

Accepted Answer

A) lubrication and advertising. 
B) maintenance and insurance. 
C) supplies and lubrication. 
D) supplies and utilities.

Question 2

Porter Company has provided the following data for the second quarter of the most recent year:  Assume that direct labor is a variable cost and that there were no beginning or ending inventories.
-The total contribution margin of Porter Company for the second quarter was:

Accepted Answer

A) $37,250 
B) $87,000 
C) $176,000 
D) $211,000

Question 3

An example of a discretionary fixed cost is:

Accepted Answer

A) insurance. 
B) taxes on real estate. 
C) management training. 
D) depreciation of buildings and equipment.

Question 4

Buffo Company fabricates metal folding chairs.Data concerning the company's revenue and cost structure follow: 
-If Buffo plans to produce and sell 4,000 units next month,the expected gross margin would be:

Accepted Answer

A) $41,000 
B) $37,000 
C) $68,000 
D) $57,500

Question 5

Anderton Corporation has provided the following production and average cost data for two levels of monthly production volume.The company produces a single product.  The best estimate of the total monthly fixed manufacturing cost is:

Accepted Answer

A) $391,200 
B) $271,200 
C) $656,400 
D) $351,200

Question 6

Buffo Company fabricates metal folding chairs.Data concerning the company's revenue and cost structure follow: 
-If Buffo plans to produce and sell 3,000 units next month,the expected contribution margin would be:

Accepted Answer

A) $30,750 
B) $74,250 
C) $26,750 
D) $96,500

Question 7

Giaquinto Corporation reports that at an activity level of 7,600 units,its total variable cost is $182,856 and its total fixed cost is $444,296.
Required:
For the activity level of 7,900 units,compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit;and (f) the average total cost per unit.Assume that this activity level is within the relevant range.

Accepted Answer

The answer of Giaquinto Corporation reports that at an activity...

Question 8

At an activity level of 7,900 machine-hours in a month,Manchester Corporation's total variable maintenance cost is $430,550 and its total fixed maintenance cost is $417,120.
-What would be the average fixed maintenance cost per unit at an activity level of 8,000 units in a month? Assume that this level of activity is within the relevant range.

Accepted Answer

A) $52.14 
B) $70.75 
C) $52.80 
D) $107.30

Question 9

Pfalzgraf Corporation,a manufacturing company,has provided the following financial data for January:  The company had no beginning or ending inventories.
-The gross margin for January was:

Accepted Answer

A) $14,000 
B) $151,000 
C) $91,000 
D) $163,000

Question 10

The following data pertain to activity and costs for two recent months:  Assuming that these activity levels are within the relevant range,the mixed costs for November were:

Accepted Answer

A) $40,000 
B) $35,000 
C) $25,000 
D) $20,000

Question 11

Maxwell Company has a total expense per unit of $2.00 per unit at the 16,000 level of activity and total expense per unit of $1.95 at the 21,000 unit level of activity.
-The best estimate of the total expected costs at the 19,000 level of activity for Maxwell Company is:

Accepted Answer

A) $37,050 
B) $38,000 
C) $37,370 
D) $39,830

Question 12

Within the relevant range,the variable cost per unit:

Accepted Answer

A) remains constant as activity changes. 
B) increases as activity increases. 
C) decreases as activity increases. 
D) can increase or decrease as the activity changes.

Question 13

At an activity level of 2,400 units,Kloster Corporation's total variable cost is $118,008 and its total fixed cost is $9,000.
Required:
For the activity level of 2,500 units,compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit;and (f) the average total cost per unit.Assume that this activity level is within the relevant range.

Accepted Answer

The answer of At an activity level of 2,400 units,Kloster...

Question 14

Electrical costs at one of Noyd Corporation's factories are listed below:  Management believes that electrical cost is a mixed cost that depends on machine-hours.
-Using the high-low method,the estimate of the fixed component of electrical cost per month is closest to:

Accepted Answer

A) $9,266 
B) $10,232 
C) $10,244 
D) $9,881

Question 15

Economists correctly point out that many costs that the accountant classifies as variable are actually curvilinear.

Accepted Answer

A) True 
 B)False

Question 16

With automation,fixed costs increase relative to variable costs.

Accepted Answer

A) True 
 B)False

Question 17

Given the cost formula Y = $12,000 + $6X,total cost at an activity level of 8,000 units would be:

Accepted Answer

A) $20,000 
B) $60,000 
C) $12,000 
D) $48,000

Question 18

The management of Harper Corporation,a manufacturing company,has provided the following financial data for December:  The contribution margin for December was:

Accepted Answer

A) $204,000 
B) $64,000 
C) $340,000 
D) $319,000

Question 19

Shipping expense is $9,000 for 8,000 pounds shipped and $11,250 for 11,000 pounds shipped.Assuming that this activity is within the relevant range,if the company ships 9,000 pounds,its expected shipping expense is closest to:

Accepted Answer

A) $10,125 
B) $8,583 
C) $9,972 
D) $9,750

Question 20

Supply costs at Rupard Corporation's chain of gyms are listed below:  Management believes that supply cost is a mixed cost that depends on client-visits.Using the high-low method to estimate the variable and fixed components of this cost,those estimates would be closest to:

Accepted Answer

A) $0.76 per client-visit;$18,152 per month 
B) $1.31 per client-visit;$10,462 per month 
C) $2.08 per client-visit;$28,489 per month 
D) $0.77 per client-visit;$17,952 per month

Exam 3: Cost Behavior: Analysis and Use

Stewart Company is attempting to classify costs according to their cost behavior.Data concerning activity and costs are listed below: -The costs that Stewart Company would classify as mixed would be:

Porter Company has provided the following data for the second quarter of the most recent year: Assume that direct labor is a variable cost and that there were no beginning or ending inventories. -The total contribution margin of Porter Company for the second quarter was:

An example of a discretionary fixed cost is:

Buffo Company fabricates metal folding chairs.Data concerning the company's revenue and cost structure follow: -If Buffo plans to produce and sell 4,000 units next month,the expected gross margin would be:

Anderton Corporation has provided the following production and average cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is:

Buffo Company fabricates metal folding chairs.Data concerning the company's revenue and cost structure follow: -If Buffo plans to produce and sell 3,000 units next month,the expected contribution margin would be:

Pfalzgraf Corporation,a manufacturing company,has provided the following financial data for January: The company had no beginning or ending inventories. -The gross margin for January was:

The following data pertain to activity and costs for two recent months: Assuming that these activity levels are within the relevant range,the mixed costs for November were:

Maxwell Company has a total expense per unit of $2.00 per unit at the 16,000 level of activity and total expense per unit of $1.95 at the 21,000 unit level of activity. -The best estimate of the total expected costs at the 19,000 level of activity for Maxwell Company is:

Within the relevant range,the variable cost per unit:

Electrical costs at one of Noyd Corporation's factories are listed below: Management believes that electrical cost is a mixed cost that depends on machine-hours. -Using the high-low method,the estimate of the fixed component of electrical cost per month is closest to:

Economists correctly point out that many costs that the accountant classifies as variable are actually curvilinear.

With automation,fixed costs increase relative to variable costs.

Given the cost formula Y = $12,000 + $6X,total cost at an activity level of 8,000 units would be:

The management of Harper Corporation,a manufacturing company,has provided the following financial data for December: The contribution margin for December was:

Shipping expense is $9,000 for 8,000 pounds shipped and $11,250 for 11,000 pounds shipped.Assuming that this activity is within the relevant range,if the company ships 9,000 pounds,its expected shipping expense is closest to:

Supply costs at Rupard Corporation's chain of gyms are listed below: Management believes that supply cost is a mixed cost that depends on client-visits.Using the high-low method to estimate the variable and fixed components of this cost,those estimates would be closest to: