Question 1

An example of a discretionary fixed cost would be:

Accepted Answer

A) taxes on the factory. 
B) depreciation on manufacturing equipment. 
C) insurance. 
D) research and development. 
A) taxes on the factory. 
B) depreciation on manufacturing equipment. 
C) insurance. 
D) research and development.

Question 2

Data concerning Nelson Company's activity for the first six months of the year appear below:   Using the high-low method of analysis,the estimated monthly fixed component of the electrical cost is:

Accepted Answer

A) $1,520 
B) $440 
C) $260 
D) $560 
A) $1,520 
B) $440 
C) $260 
D) $560

Question 3

Comparative income statements for Tudor Retailing Company for the last two months are presented below:   If the Tudor Retailing Company uses the high-low method of analysis,the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

Accepted Answer

A) $34,500 
B) $17,000 
C) $27,000 
D) $22,000 
A) $34,500 
B) $17,000 
C) $27,000 
D) $22,000

Question 4

Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September.Direct materials cost was $57,000,direct labor cost was $43,000,and manufacturing overhead was $71,000.Selling expense was $15,000 and administrative expense was $32,000. The conversion cost for September was:

Accepted Answer

A) $114,000 
B) $131,000 
C) $171,000 
D) $103,000 
A) $114,000 
B) $131,000 
C) $171,000 
D) $103,000

Question 5

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:   The best estimate of the total variable manufacturing cost per unit is:

Accepted Answer

A) $39.10 
B) $27.70 
C) $11.40 
D) $13.20 
A) $39.10 
B) $27.70 
C) $11.40 
D) $13.20

Question 6

Comparative income statements for Tudor Retailing Company for the last two months are presented below:   Which of the following classifications best describes the behavior of shipping expense?

Accepted Answer

A) Mixed 
B) Variable 
C) Fixed 
D) none of these 
A) Mixed 
B) Variable 
C) Fixed 
D) none of these

Question 7

Nieman Inc. ,a local retailer,has provided the following data for the month of March:   The net operating income for March was:

Accepted Answer

A) $130,000 
B) $134,000 
C) $43,000 
D) $47,000 
A) $130,000 
B) $134,000 
C) $43,000 
D) $47,000

Question 8

Abare Corporation reported the following data for the month of December:   The prime cost for December was:

Accepted Answer

A) $129,000 
B) $115,000 
C) $109,000 
D) $62,000 
A) $129,000 
B) $115,000 
C) $109,000 
D) $62,000

Question 9

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

Accepted Answer

A) $32.40 
B) $44.80 
C) $66.20 
D) $21.40 
A) $32.40 
B) $44.80 
C) $66.20 
D) $21.40

Question 10

A partial listing of costs incurred at Gilhooly Corporation during September appears below:   The total of the period costs listed above for September is:

Accepted Answer

A) $303,000 
B) $59,000 
C) $366,000 
D) $362,000 
A) $303,000 
B) $59,000 
C) $366,000 
D) $362,000

Question 11

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:   The best estimate of the total cost to manufacture 1,200 units is closest to:

Accepted Answer

A) $68,520 
B) $100,920 
C) $111,720 
D) $90,120 
A) $68,520 
B) $100,920 
C) $111,720 
D) $90,120

Question 12

Tolden Marketing,Inc. ,a merchandising company,reported sales of $2,861,800 and cost of goods sold of $1,492,400 for December.The company's total variable selling expense was $77,900;its total fixed selling expense was $70,600;its total variable administrative expense was $98,400;and its total fixed administrative expense was $193,400.The cost of goods sold in this company is a variable cost. The contribution margin for December is:

Accepted Answer

A) $1,369,400 
B) $2,421,500 
C) $1,193,100 
D) $929,100 
A) $1,369,400 
B) $2,421,500 
C) $1,193,100 
D) $929,100

Question 13

Erkkila Inc.reports that at an activity level of 6,400 machine-hours in a month,its total variable inspection cost is $423,680 and its total fixed inspection cost is $154,368. What would be the average fixed inspection cost per unit at an activity level of 6,700 machine-hours in a month? Assume that this level of activity is within the relevant range.

Accepted Answer

A) $23.04 
B) $90.32 
C) $24.12 
D) $45.83 
A) $23.04 
B) $90.32 
C) $24.12 
D) $45.83

Question 14

If the level of activity increases within the relevant range:

Accepted Answer

A) variable cost per unit and total fixed costs also increase. 
B) fixed cost per unit and total variable cost also increase. 
C) total cost will increase and fixed cost per unit will decrease. 
D) variable cost per unit and total cost also increase. 
A) variable cost per unit and total fixed costs also increase. 
B) fixed cost per unit and total variable cost also increase. 
C) total cost will increase and fixed cost per unit will decrease. 
D) variable cost per unit and total cost also increase.

Question 15

Comparative income statements for Tudor Retailing Company for the last two months are presented below:   Which of the following classifications best describes the behavior of clerical expense?

Accepted Answer

A) Mixed 
B) Variable 
C) Fixed 
D) none of these 
A) Mixed 
B) Variable 
C) Fixed 
D) none of these

Question 16

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below:     If 24,000 units are sold during the third quarter and this activity is within the relevant range,Bee Company's expected contribution margin would be:

Accepted Answer

A) $646,800 
B) $762,000 
C) $810,000 
D) $760,080 
A) $646,800 
B) $762,000 
C) $810,000 
D) $760,080

Question 17

Management of Childers Corporation is considering whether to purchase a new model 380 machine costing $278,000 or a new model 230 machine costing $207,000 to replace a machine that was purchased 3 years ago for $266,000.The old machine was used to make product R16K until it broke down last week.Unfortunately,the old machine cannot be repaired. Management has decided to buy the new model 230 machine.It has less capacity than the new model 380 machine,but its capacity is sufficient to continue making product R16K.
Management also considered,but rejected,the alternative of simply dropping product R16K.If that were done,instead of investing $207,000 in the new machine,the money could be invested in a project that would return a total of $305,000.
In making the decision to buy the model 230 machine rather than the model 380 machine,the differential cost was:

Accepted Answer

A) $71,000 
B) $59,000 
C) $12,000 
D) $39,000 
A) $71,000 
B) $59,000 
C) $12,000 
D) $39,000

Question 18

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below:     Bee Company's contribution margin for the second quarter is:

Accepted Answer

A) $463,200 
B) $540,000 
C) $851,200 
D) $431,200 
A) $463,200 
B) $540,000 
C) $851,200 
D) $431,200

Question 19

Electrical costs at one of Reifel 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) $7,371 
B) $5,731 
C) $5,875 
D) $5,840 
A) $7,371 
B) $5,731 
C) $5,875 
D) $5,840

Question 20

Contribution margin means:

Accepted Answer

A) what remains from total sales after deducting fixed expenses. 
B) what remains from total sales after deducting cost of goods sold. 
C) the sum of cost of goods sold and variable expenses. 
D) what remains from total sales after deducting all variable expenses. 
A) what remains from total sales after deducting fixed expenses. 
B) what remains from total sales after deducting cost of goods sold. 
C) the sum of cost of goods sold and variable expenses. 
D) what remains from total sales after deducting all variable expenses.

An example of a discretionary fixed cost would be:

Data concerning Nelson Company's activity for the first six months of the year appear below: Using the high-low method of analysis,the estimated monthly fixed component of the electrical cost is:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis,the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total variable manufacturing cost per unit is:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of shipping expense?

Nieman Inc. ,a local retailer,has provided the following data for the month of March: The net operating income for March was:

Abare Corporation reported the following data for the month of December: The prime cost for December was:

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

A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the period costs listed above for September is:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 1,200 units is closest to:

If the level of activity increases within the relevant range:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of clerical expense?

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below: If 24,000 units are sold during the third quarter and this activity is within the relevant range,Bee Company's expected contribution margin would be:

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below: Bee Company's contribution margin for the second quarter is:

Electrical costs at one of Reifel 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:

Contribution margin means:

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 1: Managerial Accounting and Cost Concepts

An example of a discretionary fixed cost would be:

Data concerning Nelson Company's activity for the first six months of the year appear below: Using the high-low method of analysis,the estimated monthly fixed component of the electrical cost is:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis,the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total variable manufacturing cost per unit is:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of shipping expense?

Nieman Inc. ,a local retailer,has provided the following data for the month of March: The net operating income for March was:

Abare Corporation reported the following data for the month of December: The prime cost for December was:

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

A partial listing of costs incurred at Gilhooly Corporation during September appears below: The total of the period costs listed above for September is:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 1,200 units is closest to:

If the level of activity increases within the relevant range:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of clerical expense?

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below: If 24,000 units are sold during the third quarter and this activity is within the relevant range,Bee Company's expected contribution margin would be:

Bee Company is a honey wholesaler.An income statement and other data for the second quarter of the year are given below: Bee Company's contribution margin for the second quarter is:

Electrical costs at one of Reifel 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:

Contribution margin means:

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters