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Question 1 Which of the following would be an example of a fixed cost? Answer raw materials sales commissions utilities property taxes . 3 points Question 2 A mixed cost Answer contains both a fixed and variable component is always easy to separate will decrease as output increases none of the answers are correct . 3 points Question 3 When a mixed cost is graphed the slope of the line equals Answer the fixed cost per unit of output the total cost per unit the sales price per unit the variable cost per unit of the activity driver . 3 points Question 4 The scatter graph method Answer is the most accurate method has the advantage of objectivity may reveal the presence of outliers none of the answers are correct . 3 points Question 5 The relevant range Answer is the normal range of output is the range of output where cost relationships are valid may change from period to period all of the answers are correct . 3 points Question 6 Which of the following would probably be a discretionary fixed cost for a law firm? Answer salary of receptionist cost of television commercials depreciation on furniture and equipment cost of legal forms . 3 points Question 7 Figure 3-2. Lassiter Toys, Inc. Cost of Materials No. of toys Total cost produced of materials 100,000 $20,000 200,000 $40,000 300,000 $60,000 See Figure 3-2: The cost behavior of the materials cost is Answer fixed mixed variable step . 3 points Question 8 Figure 3-2. Lassiter Toys, Inc. Cost of Materials No. of toys Total cost produced of materials 100,000 $20,000 200,000 $40,000 300,000 $60,000 See Figure 3-2: What should the total materials cost be at a production level of 220,000 toys? Answer $88,000 $44,000 $22,000 $132,000 . 3 points Question 9 Figure 3-2. Lassiter Toys, Inc. Cost of Materials No. of toys Total cost produced of materials 100,000 $20,000 200,000 $40,000 300,000 $60,000 See Figure 3-2: What is the materials cost per unit of output? Answer $.20 $.10 $.60 $.40 . 3 points Question 10 Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. Month Lease cost Machine hours April $ 21,000 550 May 16,500 420 June 19,000 510 July 22,230 570 See Figure 3-3: Using the high-low method calculate the variable rate for the lease cost Answer $38.20 $38.18 $61.50 $37.25 . 3 points Question 11 Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. Month Lease cost Machine hours April $ 21,000 550 May 16,500 420 June 19,000 510 July 22,230 570 See Figure 3-3: Using the high-low method calculate the fixed cost of leasing Answer $482 $516 $420 $456 . 3 points Question 12 Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. Month Lease cost Machine hours April $ 21,000 550 May 16,500 420 June 19,000 510 July 22,230 570 See Figure 3-3: What would Okafor Company?s cost formula be to estimate the cost of leasing within the relevant range? Answer total lease cost = $456 + ($38.20 ? machine hours) total lease cost = $516 + ($38.18 ? machine hours) total lease cost = $420 + ($37.25 ? machine hours) none of the answers are correct . 3 points Question 13 Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. Month Lease cost Machine hours April $ 21,000 550 May 16,500 420 June 19,000 510 July 22,230 570 See Figure 3-3: What would the estimate of Okafor Company?s total lease cost be at a level of 500 machine hours? Answer $19,606 $19,556 $16,464 $18,546 . 3 points Question 14 Figure 3-6. Taran Company incurred the following costs for the months of January and February. Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 6,000 Depreciation 3,500 3,500 Materials 10,000 20,000 See Figure 3-6: From the information above we can assume that Answer insurance and depreciation are fixed costs output decreased from January to February output stayed the same from January to February insurance is a mixed cost . 3 points Question 15 Figure 3-6. Taran Company incurred the following costs for the months of January and February. Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 6,000 Depreciation 3,500 3,500 Materials 10,000 20,000 See Figure 3-6: Assume that output was 5,000 units in January and 10,000 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $3,000. What was the variable rate per unit of output for utilities cost in January? Answer $.20 $.40 $.60 $.30 . 3 points Question 16 Figure 3-6. Taran Company incurred the following costs for the months of January and February. Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 6,000 Depreciation 3,500 3,500 Materials 10,000 20,000 See Figure 3-6: If output was 5,000 units in January and 10,000 units in February we can assume that Answer utilities and materials are variable costs utilities, insurance, and depreciation are fixed costs insurance and depreciation are mixed costs materials is the only variable cost . 3 points Question 17 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. Refer to Figure 4-1. What is the budgeted operating income? Answer $273,000 $227,500 $45,500 $374,500 $567,000 . 3 points Question 18 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. Refer to Figure 4-1. What is the variable cost ratio? Answer 35% 54% 89% 19% 50% . 3 points Question 19 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. Refer to Figure 4-1. What is the breakeven point in sales dollars? Answer $350,000 $420,000 $650,000 $780,000 $567,000 . 3 points Question 20 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. Refer to Figure 4-1. What is the contribution margin? Answer $90,000 $183,000 $36,000 $273,000 $374,500 . 3 points Question 21 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. Refer to Figure 4-1. What is the contribution ratio? Answer 35% 65% 54% 89% 50% . 3 points Question 22 Figure 4-6. Xeller Company makes electronic keyboards. The practice model price is $220 and variable expenses are $190. The deluxe model price is $340 and variable expenses are $250. The professional model price is $1,200 and variable expense per unit is $800. Total fixed expenses are $187,000. Generally, Xeller sells 6 practice models and 3 deluxe models for every professional model sold. Refer to Figure 4-6. Using the sales mix stated in the facts from Figure 4-6 to form a package, what is the total package contribution margin? Answer $850 $450 $520 $1,890 $587 . 3 points Question 23 Figure 4-6. Xeller Company makes electronic keyboards. The practice model price is $220 and variable expenses are $190. The deluxe model price is $340 and variable expenses are $250. The professional model price is $1,200 and variable expense per unit is $800. Total fixed expenses are $187,000. Generally, Xeller sells 6 practice models and 3 deluxe models for every professional model sold. Refer to Figure 4-6. What is the number of practice models sold at breakeven? Answer 850 220 180 1,320 440 . 3 points Question 24 Figure 4-6. Xeller Company makes electronic keyboards. The practice model price is $220 and variable expenses are $190. The deluxe model price is $340 and variable expenses are $250. The professional model price is $1,200 and variable expense per unit is $800. Total fixed expenses are $187,000. Generally, Xeller sells 6 practice models and 3 deluxe models for every professional model sold. Refer to Figure 4-6. What is the number of deluxe models sold at breakeven Answer 220 660 1,320 850 440 . 3 points Question 25 Figure 4-6. Xeller Company makes electronic keyboards. The practice model price is $220 and variable expenses are $190. The deluxe model price is $340 and variable expenses are $250. The professional model price is $1,200 and variable expense per unit is $800. Total fixed expenses are $187,000. Generally, Xeller sells 6 practice models and 3 deluxe models for every professional model sold. Refer to Figure 4-6. What is the number of professional models sold at breakeven? Answer 220 850 400 4,675 440 . 3 points Question 26 Figure 4-6. Xeller Company makes electronic keyboards. The practice model price is $220 and variable expenses are $190. The deluxe model price is $340 and variable expenses are $250. The professional model price is $1,200 and variable expense per unit is $800. Total fixed expenses are $187,000. Generally, Xeller sells 6 practice models and 3 deluxe models for every professional model sold. Refer to Figure 4-6. What is the overall sales revenue at breakeven? Answer $778,800 $387,200 $1,288,700 $2,067,800 $968,000 . 3 points Question 27 If fixed costs increase, the break-even point in units will Answer increase decrease remain the same remain the same; however, contribution per unit will decrease . 3 points Question 28 If the contribution margin per unit decreases, the break-even point in units Answer will increase will decrease will remain the same cannot be determined from the information given . 3 points Question 29 Firm X and Firm Y are competitors within the same industry. Firm X produces its product using large amounts of direct labor. Firm Y has replaced direct labor with investment in machinery. Projected sales for both firms are 15% LESS than in the prior year. Which statement regarding projected profits is TRUE? Answer Firm X will lose more profit than Firm Y Firm Y will lose more profit than Firm X Firm X and Firm Y will lose the same amount of profit. Neither Firm X nor Firm Y will lose profit. . 3 points Question 30 Figure 4-10. A company provided the following data: Sales $540,000 Variable costs $378,000 Fixed costs $120,000 Expected production and sales in units 40,000 Refer to Figure 4-10. What is the break-even point in sales dollars? Answer $498,000 $400,000 $171,429 $112,500 $150,000 . 4 points Question 31 Figure 4-10. A company provided the following data: Sales $540,000 Variable costs $378,000 Fixed costs $120,000 Expected production and sales in units 40,000 Refer to Figure 4-10. How much sales in dollars is necessary to generate a profit of $30,000? Answer $528,000 $500,000 $214,286 $100,000 $150,000 . 3 points Question 32 If sales remain the same and the margin of safety increases, which of the following is true? Answer the breakeven point has increased the breakeven point has decreased fixed costs have increased none of these is true . 3 points Question 33 Operating leverage is the relative mix of Answer revenues earned and manufacturing costs fixed and variable costs high-volume and low-volume products manufacturing costs and period costs revenues earned and variable costs . 3 points Save and Submit

 

Paper#8461 | Written in 18-Jul-2015

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