Question 1

Traditional income statements do not distinguish fixed operating costs from variable operating costs.

Accepted Answer

A) True 
 B)False

Question 2

When predicting costs at other volumes using a cost equation derived from either the high-low method or regression analysis, managers should consider

Accepted Answer

A) outliers. 
B) general inflation. 
C) seasonality. 
D) all of the above. 
A) outliers. 
B) general inflation. 
C) seasonality. 
D) all of the above.

Question 3

On a contribution margin income statement, sales revenue less variable expenses equals

Accepted Answer

A) operating expenses. 
B) gross profit. 
C) operating income. 
D) contribution margin. 
A) operating expenses. 
B) gross profit. 
C) operating income. 
D) contribution margin.

Question 4

Neon Company manufactures widgets. The following data is related to sales and production of the widgets for last year.   Using variable costing, what is the contribution margin for last year?

Accepted Answer

A) $216,700 
B) $68,200 
C) $143,000 
D) $69,300 
A) $216,700 
B) $68,200 
C) $143,000 
D) $69,300

Question 5

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

Accepted Answer

A) Mixed cost 
B) Fixed cost 
C) Conversion cost 
D) Variable cost 
A) Mixed cost 
B) Fixed cost 
C) Conversion cost 
D) Variable cost

Question 6

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00. Given this information, what would be the total cost of producing 7,500 baseball bats?

Accepted Answer

A) $7,510 
B) $75,000 
C) $10 
D) $750 
A) $7,510 
B) $75,000 
C) $10 
D) $750

Question 7

On a regression analysis output generated with Excel, a regression equation's fixed cost component is represented by the ________.

Accepted Answer

A) x variable 1 coefficient 
B) intercept coefficient 
C) R-square 
D) residual 
A) x variable 1 coefficient 
B) intercept coefficient 
C) R-square 
D) residual

Question 8

If a regression analysis shows an R factor of 0.15, it is safe to assume

Accepted Answer

A) a strong positive relationship between cost and volume. 
B) a strong negative relationship between cost and volume. 
C) a perfect positive relationship between cost and volume. 
D) a very weak relationship between cost and volume. 
A) a strong positive relationship between cost and volume. 
B) a strong negative relationship between cost and volume. 
C) a perfect positive relationship between cost and volume. 
D) a very weak relationship between cost and volume.

Question 9

Schrute Farm Sales buys portable generators for $450 and sells them for $720. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $2,000 a month rent for his store, and also pays $1,700 a month to his staff in addition to the commissions. Mr. Schrute sold 200 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin?

Accepted Answer

A) $241,200 
B) $ 97,200 
C) $46,800 
D) $144,000 
A) $241,200 
B) $ 97,200 
C) $46,800 
D) $144,000

Question 10

Total variable costs change in direct proportion to changes in volume.

Accepted Answer

A) True 
 B)False

Question 11

Maryland Incorporated produces toys. Total manufacturing costs are $350,000 when 50,000 toys are produced. Of this amount, total variable costs are $100,000. What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels.)

Accepted Answer

A) $150,000 
B) $400,000 
C) $500,000 
D) $525,000 
A) $150,000 
B) $400,000 
C) $500,000 
D) $525,000

Question 12

The output from regression analysis generated in Excel gives us all of the following information except

Accepted Answer

A) intercept coefficient. 
B) highest and lowest data points × variable 1 coefficient. 
C) R-square. 
D) x variable 1 coefficient. 
A) intercept coefficient. 
B) highest and lowest data points × variable 1 coefficient. 
C) R-square. 
D) x variable 1 coefficient.

Question 13

Sales revenue less variable expenses equals contribution margin.

Accepted Answer

A) True 
 B)False

Question 14

Using account analysis, what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

Accepted Answer

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

Question 15

Johnson Trucking Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area. It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. Johnson Trucking Company has the following data available.   The variable cost per mile using the high-low method is

Accepted Answer

A) $1.33. 
B) $0.75. 
C) $1.43. 
D) $1.00. 
A) $1.33. 
B) $0.75. 
C) $1.43. 
D) $1.00.

Question 16

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5,000 anchors, Sea Side Enterprises average cost per anchor is $52.00. If $15,000 of the costs are fixed, and the plant manager uses the average cost per unit to predict total costs, her forecast for 6,000 anchors will be

Accepted Answer

A) $260,000. 
B) $312,000. 
C) $309,000. 
D) $52,000. 
A) $260,000. 
B) $312,000. 
C) $309,000. 
D) $52,000.

Question 17

The representation for fixed cost per unit of activity is

Accepted Answer

A) vx divided by v. 
B) vx divided by y. 
C) y divided by x. 
D) f divided by x. 
A) vx divided by v. 
B) vx divided by y. 
C) y divided by x. 
D) f divided by x.

Question 18

Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5,000 anchors, Sea Side Enterprises average cost per anchor is $52.00. If $15,000 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 6,000 anchors will be

Accepted Answer

A) $52,000. 
B) $260,000. 
C) $312,000. 
D) $309,000. 
A) $52,000. 
B) $260,000. 
C) $312,000. 
D) $309,000.

Question 19

Regression analysis uses only two of the historical data points for estimating a cost equation.

Accepted Answer

A) True 
 B)False

Question 20

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months.   Using the high-low method, what is the variable cost per unit?

Accepted Answer

A) $1.44 
B) $1.04 
C) $0.50 
D) $2.00 
A) $1.44 
B) $1.04 
C) $0.50 
D) $2.00

Traditional income statements do not distinguish fixed operating costs from variable operating costs.

When predicting costs at other volumes using a cost equation derived from either the high-low method or regression analysis, managers should consider

On a contribution margin income statement, sales revenue less variable expenses equals

Neon Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Using variable costing, what is the contribution margin for last year?

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00. Given this information, what would be the total cost of producing 7,500 baseball bats?

On a regression analysis output generated with Excel, a regression equation's fixed cost component is represented by the ________.

If a regression analysis shows an R factor of 0.15, it is safe to assume

Total variable costs change in direct proportion to changes in volume.

Maryland Incorporated produces toys. Total manufacturing costs are $350,000 when 50,000 toys are produced. Of this amount, total variable costs are $100,000. What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels.)

The output from regression analysis generated in Excel gives us all of the following information except

Sales revenue less variable expenses equals contribution margin.

Using account analysis, what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

The representation for fixed cost per unit of activity is

Regression analysis uses only two of the historical data points for estimating a cost equation.

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method, what is the variable cost per unit?

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

Traditional income statements do not distinguish fixed operating costs from variable operating costs.

When predicting costs at other volumes using a cost equation derived from either the high-low method or regression analysis, managers should consider

On a contribution margin income statement, sales revenue less variable expenses equals

Neon Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Using variable costing, what is the contribution margin for last year?

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00. Given this information, what would be the total cost of producing 7,500 baseball bats?

On a regression analysis output generated with Excel, a regression equation's fixed cost component is represented by the ________.

If a regression analysis shows an R factor of 0.15, it is safe to assume

Total variable costs change in direct proportion to changes in volume.

Maryland Incorporated produces toys. Total manufacturing costs are $350,000 when 50,000 toys are produced. Of this amount, total variable costs are $100,000. What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels.)

The output from regression analysis generated in Excel gives us all of the following information except

Sales revenue less variable expenses equals contribution margin.

Using account analysis, what type of cost is Satellite TV when the charge is $45.00 per month plus $5.99 for pay-per-view movies?

The representation for fixed cost per unit of activity is

Regression analysis uses only two of the historical data points for estimating a cost equation.

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method, what is the variable cost per unit?

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