Question 1

Using account analysis, what type of cost is a community activity pass that costs $80 plus $15.00 per event?

Accepted Answer

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

Question 2

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

Accepted Answer

A) variable 
B) fixed 
C) mixed 
D) irrelevant 
A) variable 
B) fixed 
C) mixed 
D) irrelevant

Question 3

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $12,000 a month rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions. Homer sold 67,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his operating income?

Accepted Answer

A) $292,875 
B) $270,000 
C) $64,125 
D) $118,875 
A) $292,875 
B) $270,000 
C) $64,125 
D) $118,875

Question 4

On a traditional income statement, sales revenue less cost of goods sold equals

Accepted Answer

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

Question 5

If a regression analysis shows an R factor of .89 exists, it is safe to assume

Accepted Answer

A) a strong negative relationship between cost and volume. 
B) a strong positive relationship between cost and volume. 
C) no relationship between cost and volume. 
D) a perfect positive relationship between cost and volume. 
A) a strong negative relationship between cost and volume. 
B) a strong positive relationship between cost and volume. 
C) no relationship between cost and volume. 
D) a perfect positive relationship between cost and volume.

Question 6

Regression analysis is found by using only the two data points of the highest and lowest volume.

Accepted Answer

A) True 
 B)False

Question 7

Under absorption costing, all nonmanufacturing costs are treated as period costs.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a characteristic of a variable cost?

Accepted Answer

A) Variable costs are fixed in total. 
B) Variable costs fluctuate in total with production and sales. 
C) Variable costs do not change in total over any range. 
D) All of the above may be characteristic of a variable cost. 
A) Variable costs are fixed in total. 
B) Variable costs fluctuate in total with production and sales. 
C) Variable costs do not change in total over any range. 
D) All of the above may be characteristic of a variable cost.

Question 9

The following data is related to sales and production of the Tauro Corporation for last year.
   Required:
a. Prepare an income statement for last year using absorption costing.
b. Calculate the value of the ending inventory using absorption costing.
c. Prepare an income statement for last year using variable costing.
d. Calculate the value of the ending inventory using variable costing.

Accepted Answer

The answer of The following data is related to sales...

Question 10

For most businesses, annual straight line depreciation expense on the company's building is what type of cost?

Accepted Answer

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

Question 11

Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be

Accepted Answer

A) $1.35/unit. 
B) $0.65/unit. 
C) $2.00/unit. 
D) $2.65/unit. 
A) $1.35/unit. 
B) $0.65/unit. 
C) $2.00/unit. 
D) $2.65/unit.

Question 12

An equation of a line for total mixed costs is

Accepted Answer

A) y = vx + f. 
B) y = vx - f. 
C) f = vx - y. 
D) f = vx + y. 
A) y = vx + f. 
B) y = vx - f. 
C) f = vx - y. 
D) f = vx + y.

Question 13

Stanley's Bicycles store buys bicycles on average for $600 and sells them on average for $750. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays $1,400 a month rent for his store, and also pays $3,000 a month to his staff in addition to the commissions. Stanley sold 120 bicycles in June. If Stanley prepares a contribution margin income statement for the month of June, what would be his contribution margin?

Accepted Answer

A) $4,500 
B) $90,000 
C) $85,500 
D) $175,500 
A) $4,500 
B) $90,000 
C) $85,500 
D) $175,500

Question 14

Unit variable costs do not change as total production increases.

Accepted Answer

A) True 
 B)False

Question 15

When a merchandiser prepares a contribution margin income statement, Cost of Goods Sold is always a variable cost.

Accepted Answer

A) True 
 B)False

Question 16

In a manufacturing company, fixed costs remain the same at many different production levels within the relevant range.

Accepted Answer

A) True 
 B)False

Question 17

All fixed costs are listed ________ on a contribution margin income statement.

Accepted Answer

A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line 
A) below the contribution margin line 
B) above the gross profit line 
C) above the contribution margin line 
D) below the gross profit line

Question 18

If 120,000 units are produced, total costs are $343,000. Total fixed costs for Blue Peace Inc. are $175,000. The variable cost per unit is

Accepted Answer

A) $4.32/unit. 
B) $1.46/unit. 
C) $2.86/unit. 
D) $1.40/unit. 
A) $4.32/unit. 
B) $1.46/unit. 
C) $2.86/unit. 
D) $1.40/unit.

Question 19

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 will the total monthly manufacturing costs be if the company produces 9,000 units?

Accepted Answer

A) $8,750 
B) $4,500 
C) $8,400 
D) $4,250 
A) $8,750 
B) $4,500 
C) $8,400 
D) $4,250

Question 20

When a company produces more units than it sells, absorption costing operating income will be higher than variable costing operating income.

Accepted Answer

A) True 
 B)False

Using account analysis, what type of cost is a community activity pass that costs $80 plus $15.00 per event?

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

On a traditional income statement, sales revenue less cost of goods sold equals

If a regression analysis shows an R factor of .89 exists, it is safe to assume

Regression analysis is found by using only the two data points of the highest and lowest volume.

Under absorption costing, all nonmanufacturing costs are treated as period costs.

Which of the following is a characteristic of a variable cost?

For most businesses, annual straight line depreciation expense on the company's building is what type of cost?

Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be

An equation of a line for total mixed costs is

Unit variable costs do not change as total production increases.

When a merchandiser prepares a contribution margin income statement, Cost of Goods Sold is always a variable cost.

In a manufacturing company, fixed costs remain the same at many different production levels within the relevant range.

All fixed costs are listed ________ on a contribution margin income statement.

If 120,000 units are produced, total costs are $343,000. Total fixed costs for Blue Peace Inc. are $175,000. The variable cost per unit is

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 will the total monthly manufacturing costs be if the company produces 9,000 units?

When a company produces more units than it sells, absorption costing operating income will be higher than variable costing operating income.

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

Using account analysis, what type of cost is a community activity pass that costs $80 plus $15.00 per event?

A(n)________ cost is a cost whose total amount changes in direct proportion to a change in volume.

On a traditional income statement, sales revenue less cost of goods sold equals

If a regression analysis shows an R factor of .89 exists, it is safe to assume

Regression analysis is found by using only the two data points of the highest and lowest volume.

Under absorption costing, all nonmanufacturing costs are treated as period costs.

Which of the following is a characteristic of a variable cost?

For most businesses, annual straight line depreciation expense on the company's building is what type of cost?

Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be

An equation of a line for total mixed costs is

Unit variable costs do not change as total production increases.

When a merchandiser prepares a contribution margin income statement, Cost of Goods Sold is always a variable cost.

In a manufacturing company, fixed costs remain the same at many different production levels within the relevant range.

All fixed costs are listed ________ on a contribution margin income statement.

If 120,000 units are produced, total costs are $343,000. Total fixed costs for Blue Peace Inc. are $175,000. The variable cost per unit is

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 will the total monthly manufacturing costs be if the company produces 9,000 units?

When a company produces more units than it sells, absorption costing operating income will be higher than variable costing operating income.

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