Question 1

What will happen to the contribution margin if fixed costs related to a product increase while variable costs and sales price remain constant?

Accepted Answer

A) Will increase 
B) Will not change 
C) Will decrease 
D) Will stay the same 
A) Will increase 
B) Will not change 
C) Will decrease 
D) Will stay the same

Question 2

Which of the following is a fixed cost?

Accepted Answer

A) Direct materials cost 
B) Direct labor cost 
C) Straight-line depreciation expense 
D) Sales commissions expense 
A) Direct materials cost 
B) Direct labor cost 
C) Straight-line depreciation expense 
D) Sales commissions expense

Question 3

Which type of cost behavior is indicated by the following graph?

Accepted Answer

A) Fixed 
B) Step 
C) Mixed 
D) Variable 
A) Fixed 
B) Step 
C) Mixed 
D) Variable

Question 4

Which of the following does not appear on an income statement prepared using variable costing?

Accepted Answer

A) Fixed production costs 
B) Contribution margin 
C) Gross margin 
D) Variable production costs 
A) Fixed production costs 
B) Contribution margin 
C) Gross margin 
D) Variable production costs

Question 5

In a regression output, the "intercept coefficient" represents the fixed cost component of a mixed cost equation.

Accepted Answer

A) True 
 B)False

Question 6

Total mixed costs increase as volume increases because of the variable cost component.

Accepted Answer

A) True 
 B)False

Question 7

If inventory has not increased or decreased, but has stayed the same, operating income will be the same under variable costing and absorption costing.

Accepted Answer

A) True 
 B)False

Question 8

Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be

Accepted Answer

A) $68,750. 
B) $159,049. 
C) $90,299. 
D) $151,055. 
A) $68,750. 
B) $159,049. 
C) $90,299. 
D) $151,055.

Question 9

Best Birdies produces ornate birdcages. The company's average cost per unit is $18.00 when it produces 2,200 birdcages. If $5,500 of the total costs are fixed, what is the variable cost of producing each birdcage?

Accepted Answer

A) $2.50 
B) $34,100 
C) $18.00 
D) $15.50 
A) $2.50 
B) $34,100 
C) $18.00 
D) $15.50

Question 10

Describe the scattergraph method. Discuss the advantages and disadvantages of using the scattergraph method.

Accepted Answer

The scattergraph method involves plottin

Question 11

If a company's overhead cost equation is y = $8.80x + $120,020. The "x" is

Accepted Answer

A) the cost driver in units. 
B) total fixed costs. 
C) total overhead costs. 
D) the variable costs. 
A) the cost driver in units. 
B) total fixed costs. 
C) total overhead costs. 
D) the variable costs.

Question 12

Total fixed costs for Green Planes Inc. are $120,000. Total costs, including both fixed and variable, are $600,000 if 150,000 units are produced. The total variable costs at a level of 220,000 units would be

Accepted Answer

A) $409,091. 
B) $176,000. 
C) $880,000. 
D) $704,000. 
A) $409,091. 
B) $176,000. 
C) $880,000. 
D) $704,000.

Question 13

Total fixed costs for Randolph Manufacturing are $752,450. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 186,250 units would be closest to

Accepted Answer

A) $1.31/unit. 
B) $5.31/unit. 
C) $4.00/unit. 
D) $5.03/unit. 
A) $1.31/unit. 
B) $5.31/unit. 
C) $4.00/unit. 
D) $5.03/unit.

Question 14

Checak Incorporated wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):   What is closest to the total cost if the firm uses 6,000 machine hours?

Accepted Answer

A) $7,257.49 
B) $6,538.90 
C) $14,729,732.60 
D) $1,365.59 
A) $7,257.49 
B) $6,538.90 
C) $14,729,732.60 
D) $1,365.59

Question 15

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

Accepted Answer

A) Fixed 
B) Mixed 
C) Step 
D) Variable 
A) Fixed 
B) Mixed 
C) Step 
D) Variable

Question 16

By increasing ________, a manager can increase operating income under absorption costing.

Accepted Answer

A) variable costs 
B) fixed costs 
C) production 
D) leased assets 
A) variable costs 
B) fixed costs 
C) production 
D) leased assets

Question 17

The contribution margin is equal to

Accepted Answer

A) sales minus cost of goods sold. 
B) sales minus operating expenses. 
C) sales minus fixed expenses. 
D) sales minus variable expenses. 
A) sales minus cost of goods sold. 
B) sales minus operating expenses. 
C) sales minus fixed expenses. 
D) sales minus variable expenses.

Question 18

Wallace Industries wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):   What is the cost equation based upon the results of the regression analysis?

Accepted Answer

A) y = $072x 
B) y = $0.72x + $2,945.95 
C) y = $2,945.95x + $0.72 
D) y = $2,945.95 + $0.72 
A) y = $072x 
B) y = $0.72x + $2,945.95 
C) y = $2,945.95x + $0.72 
D) y = $2,945.95 + $0.72

Question 19

Total mixed cost is represented by which of the following equations?

Accepted Answer

A) y = vx 
B) y = vx + f 
C) y = f 
D) y = v + f 
A) y = vx 
B) y = vx + f 
C) y = f 
D) y = v + f

Question 20

With respect to total fixed costs, which of the following statements is true?

Accepted Answer

A) They will remain the same as production levels change within the relevant range. 
B) They will increase as production decreases within the relevant range. 
C) They will decrease as production increases within the relevant range. 
D) They will decrease as production decreases within the relevant range. 
A) They will remain the same as production levels change within the relevant range. 
B) They will increase as production decreases within the relevant range. 
C) They will decrease as production increases within the relevant range. 
D) They will decrease as production decreases within the relevant range.

What will happen to the contribution margin if fixed costs related to a product increase while variable costs and sales price remain constant?

Which of the following is a fixed cost?

Which type of cost behavior is indicated by the following graph?

Which of the following does not appear on an income statement prepared using variable costing?

In a regression output, the "intercept coefficient" represents the fixed cost component of a mixed cost equation.

Total mixed costs increase as volume increases because of the variable cost component.

If inventory has not increased or decreased, but has stayed the same, operating income will be the same under variable costing and absorption costing.

Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be

Best Birdies produces ornate birdcages. The company's average cost per unit is $18.00 when it produces 2,200 birdcages. If $5,500 of the total costs are fixed, what is the variable cost of producing each birdcage?

Describe the scattergraph method. Discuss the advantages and disadvantages of using the scattergraph method.

If a company's overhead cost equation is y = $8.80x + $120,020. The "x" is

Total fixed costs for Green Planes Inc. are $120,000. Total costs, including both fixed and variable, are $600,000 if 150,000 units are produced. The total variable costs at a level of 220,000 units would be

Total fixed costs for Randolph Manufacturing are $752,450. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 186,250 units would be closest to

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

By increasing ________, a manager can increase operating income under absorption costing.

The contribution margin is equal to

Total mixed cost is represented by which of the following equations?

With respect to total fixed costs, which of the following statements is true?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

What will happen to the contribution margin if fixed costs related to a product increase while variable costs and sales price remain constant?

Which of the following is a fixed cost?

Which type of cost behavior is indicated by the following graph?

Which of the following does not appear on an income statement prepared using variable costing?

In a regression output, the "intercept coefficient" represents the fixed cost component of a mixed cost equation.

Total mixed costs increase as volume increases because of the variable cost component.

If inventory has not increased or decreased, but has stayed the same, operating income will be the same under variable costing and absorption costing.

Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be

Best Birdies produces ornate birdcages. The company's average cost per unit is $18.00 when it produces 2,200 birdcages. If $5,500 of the total costs are fixed, what is the variable cost of producing each birdcage?

Describe the scattergraph method. Discuss the advantages and disadvantages of using the scattergraph method.

If a company's overhead cost equation is y = $8.80x + $120,020. The "x" is

Total fixed costs for Green Planes Inc. are $120,000. Total costs, including both fixed and variable, are $600,000 if 150,000 units are produced. The total variable costs at a level of 220,000 units would be

Total fixed costs for Randolph Manufacturing are $752,450. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 186,250 units would be closest to

Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used?

By increasing ________, a manager can increase operating income under absorption costing.

The contribution margin is equal to

Total mixed cost is represented by which of the following equations?

With respect to total fixed costs, which of the following statements is true?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters