Question 1

The following data pertain to costs at Summit Company:   The fixed cost per unit is

Accepted Answer

A) $3.75. 
B) $15.00. 
C) $18.75. 
D) $11.25. 
A) $3.75. 
B) $15.00. 
C) $18.75. 
D) $11.25.

Question 2

Under absorption costing, variable manufacturing costs are treated as period costs.

Accepted Answer

A) True 
 B)False

Question 3

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

Accepted Answer

A) True 
 B)False

Question 4

McCartney Services has a customer website to take orders, answer customer questions, and address customer complaints. The costs associated with this customer website over the past six months are listed below:
   Management at McCartney Services believes that the customer website costs are a mixed cost and would like to use the high-low method to estimate their future costs using the number of website hits in any given month as the cost driver.
Required:
1. Using the high-low method, estimate the variable cost per website hit and the monthly fixed costs associated with the customer website.
2. Write the cost equation for estimating the customer website expenses for McCartney Services using the results from Requirement 1.
3. If McCartney Services expects 9,500 website hits for July, what are their anticipated customer website costs for July?

Accepted Answer

The answer of McCartney Services has a customer website to...

Question 5

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

Accepted Answer

A) True 
 B)False

Question 6

Mario Company has total fixed costs of $600,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The fixed cost per unit at a production level of 300,000 units is

Accepted Answer

A) $1.75. 
B) $2.00. 
C) $2.04. 
D) $3.50. 
A) $1.75. 
B) $2.00. 
C) $2.04. 
D) $3.50.

Question 7

Which of the following cost behaviors cannot be accurately represented by a single straight line?

Accepted Answer

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

Question 8

Green Corporation has total sales revenues of $400,000. If its total fixed costs are $70,000 and its total variable costs are $150,000, the contribution margin is

Accepted Answer

A) $330,000. 
B) $250,000. 
C) $550,000. 
D) $220,000. 
A) $330,000. 
B) $250,000. 
C) $550,000. 
D) $220,000.

Question 9

Selected financial data for Spark Enterprises follows for a production level of 120,000 units:
   a. Calculate the variable cost per unit.
b. If Flash Corporation makes 75,000 units, calculate the fixed cost per unit.
c. If Flash Corporation makes 160,000 units, calculate the total variable costs.
d. If Flash Corporation makes 280,000 units, calculate the total costs.

Accepted Answer

The answer of Selected financial data for Spark Enterprises follows...

Question 10

The fixed cost per unit does not always remain the same.

Accepted Answer

A) True 
 B)False

Question 11

Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The variable cost per unit is

Accepted Answer

A) $6.67/unit. 
B) $5.03/unit. 
C) $11.69/unit. 
D) $1.64/unit. 
A) $6.67/unit. 
B) $5.03/unit. 
C) $11.69/unit. 
D) $1.64/unit.

Question 12

What term represents the fixed cost component in the equation: y = vx + f?

Accepted Answer

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

Question 13

On a regression analysis output generated with Excel, a regression equation's variable cost per unit 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 14

In the equation y = vx + f, the f represents the volume of activity.

Accepted Answer

A) True 
 B)False

Question 15

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

Accepted Answer

A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line. 
A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line.

Question 16

For retailers and service companies without inventory, operating income is different if a traditional income statement or a contribution margin income statement is prepared.

Accepted Answer

A) True 
 B)False

Question 17

U.S. GAAP requires companies to use absorption costing for external reporting purposes.

Accepted Answer

A) True 
 B)False

Question 18

Using account analysis, what type of cost are utilities if you are charged $45 for the first 400 kilowatt hours, $100 for 401-600 kilowatt hours, and $165 + or - for 601-900 kilowatt hours?

Accepted Answer

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

Question 19

Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed?

Accepted Answer

A) High-low method 
B) Account analysis 
C) Regression analysis 
D) Low-high method 
A) High-low method 
B) Account analysis 
C) Regression analysis 
D) Low-high method

Question 20

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

Accepted Answer

A) production equals sales for that period. 
B) sales exceed production for that period. 
C) production exceeds sales for that period. 
D) variable overhead exceeds fixed overhead for that period. 
A) production equals sales for that period. 
B) sales exceed production for that period. 
C) production exceeds sales for that period. 
D) variable overhead exceeds fixed overhead for that period.

The following data pertain to costs at Summit Company: The fixed cost per unit is

Under absorption costing, variable manufacturing costs are treated as period costs.

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

Mario Company has total fixed costs of $600,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The fixed cost per unit at a production level of 300,000 units is

Which of the following cost behaviors cannot be accurately represented by a single straight line?

Green Corporation has total sales revenues of $400,000. If its total fixed costs are $70,000 and its total variable costs are $150,000, the contribution margin is

The fixed cost per unit does not always remain the same.

Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The variable cost per unit is

What term represents the fixed cost component in the equation: y = vx + f?

On a regression analysis output generated with Excel, a regression equation's variable cost per unit is represented by the ________.

In the equation y = vx + f, the f represents the volume of activity.

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

For retailers and service companies without inventory, operating income is different if a traditional income statement or a contribution margin income statement is prepared.

U.S. GAAP requires companies to use absorption costing for external reporting purposes.

Using account analysis, what type of cost are utilities if you are charged $45 for the first 400 kilowatt hours, $100 for 401-600 kilowatt hours, and $165 + or - for 601-900 kilowatt hours?

Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed?

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

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

The following data pertain to costs at Summit Company: The fixed cost per unit is

Under absorption costing, variable manufacturing costs are treated as period costs.

The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.

Mario Company has total fixed costs of $600,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The fixed cost per unit at a production level of 300,000 units is

Which of the following cost behaviors cannot be accurately represented by a single straight line?

Green Corporation has total sales revenues of $400,000. If its total fixed costs are $70,000 and its total variable costs are $150,000, the contribution margin is

The fixed cost per unit does not always remain the same.

Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The variable cost per unit is

What term represents the fixed cost component in the equation: y = vx + f?

On a regression analysis output generated with Excel, a regression equation's variable cost per unit is represented by the ________.

In the equation y = vx + f, the f represents the volume of activity.

On a traditional income statement, all manufacturing-related costs, whether fixed or variable, are listed

For retailers and service companies without inventory, operating income is different if a traditional income statement or a contribution margin income statement is prepared.

U.S. GAAP requires companies to use absorption costing for external reporting purposes.

Using account analysis, what type of cost are utilities if you are charged $45 for the first 400 kilowatt hours, $100 for 401-600 kilowatt hours, and $165 + or - for 601-900 kilowatt hours?

Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed?

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

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