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Cost functions outside the relevant range are usually linear




Thomas Train has collected the following information over the last six months.;Month Units produced Total costs;March 10,000 $25,600;April 12,000 26,200;May 19,200 29,600;June 13,000 26,450;July 12,000 26,000;August 15,000 26,500;Using the high-low method, what is the variable cost per unit?;Your Answer;Question 1 options;Answer;Save;Question 2 (1 point) Question 2 Unsaved;Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows;January February March April May June July;Number of rooms cleaned 250 160 200 150 270 170 260;Cleaning cost $6,450 $4,060 $5,100 $4,100 $6,640 $4,200 $6,530;How much are estimated monthly variable costs using the high-low method?;Your Answer;Question 2 options;Answer;Save;Question 3 (1 point) Question 3 Unsaved;A cost is $3,600 at 1,000 units, $7,000 at 2,000 units, and $9,200 at 3,000 units. This cost is a;Question 3 options;mixed cost;step cost;variable cost;fixed cost;Save;Question 4 (1 point) Question 4 Unsaved;Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $186,800, how many dollars of revenue must the company generate in order to reach the break-even point?;Your Answer;Question 4 options;Answer;Save;Question 5 (1 point) Question 5 Unsaved;Tim Taylor has written a self improvement book that has the following cost characteristics;Selling Price $16.00 per book;Variable cost per unit;Production $4.00;Selling & administrative 2.00;Fixed costs;Production $91,600 per year;Selling & administrative 21,900 per year;How many units must be sold to break-even?;Your Answer;Question 5 options;Answer;Save;Question 6 (1 point) Question 6 Unsaved;The use of fixed cost to increase profits at a rate faster than sales increase is called;Question 6 options;?What if ? analysis;C-V-P analysis;operating leverage;contribution margin approach;Save;Question 7 (1 point) Question 7 Unsaved;Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $80, unit variable cost is $35, and the fixed costs per month are $5,000. The margin of safety is;Your Answer;Question 7 options;Answer;Save;Question 8 (1 point) Question 8 Unsaved;Which of the following statements about the relevant range is true?;Question 8 options;Cost functions outside the relevant range are usually linear;The relevant range is the normal length of time in a company?s accounting period;Estimates outside the relevant range are useful;Cost functions within the relevant range are assumed to be linear


Paper#20925 | Written in 18-Jul-2015

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