acct 2302 test 2 chap20

Which of the following is a variable cost? A) property taxes B) salary of plant manager C) direct materials cost D) straight-line depreciation expense

Which of the following costs change in total in direct proportion to a change in volume? A) fixed costs B) variable costs C) mixed costs D) period costs

North Shore Clothing Company provided the following manufacturing costs for the month of June. Direct labor cost $138,000 Direct materials cost 85,000 Equipment depreciation (straight-line) 24,000 Factory insurance 19,000 Factory manager's salary 11,000 Janitor's salary 3,000 Packaging costs 19,200 Property taxes 14,000 From the above information, calculate North Shore's total variable costs. A) $313,200 B) $71,000 C) $242,200 D) $223,000

The fixed costs per unit will ________. A) increase as production decreases B) decrease as production decreases C) remain the same as production levels change D) increase as production increases

Which of the following costs does not change in total despite changes in volume within the relevant range? A) fixed costs B) variable costs C) mixed costs D) total production costs

First Buy Television Antenna Company provided the following manufacturing costs for the month of June. Direct labor cost $132,000 Direct materials cost 84,000 Equipment depreciation (straight-line) 24,000 Factory insurance 10,000 Factory manager's salary 10,200 Janitor's salary 4,000 Packaging costs 18,600 Property taxes 16,000 From the above information, calculate First Buy's total fixed costs. A) $298,800 B) $40,200 C) $60,200 D) $64,200

A 15% increase in production volume will result in a ________. A) 15% increase in the variable cost per unit B) 15% increase in total mixed costs C) 15% increase in total administration costs D) 15% increase in total variable costs

Variable cost per unit, within the relevant range, will ________. A) increase as production decreases B) decrease as production decreases C) remain the same as production levels change D) decrease as production increases

Which of the following statements is true of the behavior of total variable costs, within the relevant range? A) They will decrease as production increases. B) They will remain the same as production levels change. C) They will decrease as production decreases. D) They will increase as production decreases.

Which of the following statements is true of the behavior of total fixed costs, within the relevant range? A) They will remain the same as production levels change. B) They will increase as production decreases. C) They will decrease as production decreases. D) They will decrease as production increases.

A cellphone service provider charges $5.00 per month and $0.20 per minute per call. If a customer's current bill is $55, how many minutes did the customer use? (Round any intermediate calculations and your final answer to the nearest whole minute.) A) 275 minutes B) 300 minutes C) 250 minutes D) 225 minutes

Ron Moss, a manager of Waterworks, Inc., was reviewing the water bills of a dog daycare and spa. He determined that its highest and lowest bills of $3,600 and $2,800 were incurred in the months of May and November, respectively. If 500 dogs were washed in May and 200 dogs were washed in November, what was the variable cost per dog associated with the company's water bill? (Round your answer to the nearest cent.) A) $4.00 B) $14.00 C) $7.20 D) $2.67

Jose Foster, a manager of Prettiest Pooch, Inc., was reviewing the water bills of a dog daycare and spa. He determined that its highest and lowest bills of $3,800 and $2,000 were incurred in the months of May and November, respectively. If 600 dogs were washed in May and 200 dogs were washed in November, what was the fixed cost associated with the company's water bill? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) A) $2,000 B) $3,800 C) $1,100 D) $1,800

Costs that have both variable and fixed components are called ________. A) fixed costs B) variable costs C) mixed costs D) contribution costs

Jupiter, Inc. incurred fixed costs of $300,000. Total costs, both fixed and variable, are $500,000 when 59,000 units are produced. It sold 35,000 units during the year. Calculate the variable cost per unit. (Round your answer to the nearest cent.) A) $8.47 B) $14.29 C) $5.08 D) $3.39

Left Hand, Inc. has fixed costs of $400,000. Total costs, both fixed and variable, are $550,000 when 40,000 units are produced. Calculate the total costs if the volume increases to 64,000 units. (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A) $950,000 B) $150,000 C) $640,000 D) $550,000

Anthony Chemicals, Inc. has fixed costs of $34,000 per month. The highest production volume during the year was in January when 120,000 units were produced, 72,000 units were sold, and total costs of $610,000 were incurred. In June, the company produced only 54,000 units. What was the total cost incurred in June? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) A) $259,200 B) $293,200 C) $610,000 D) $644,000

The highest value of total cost was $800,000 in June for Mantilla Beverages, Inc. Its lowest value of total cost was $510,000 in December. The company makes a single product. The production volume in June and December were 13,000 and 8,000 units, respectively. What is the fixed cost per month? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A) $510,000 B) $290,000 C) $46,000 D) $8,000

The highest value of total cost was $70,000 in June for Fargo Beverages, Inc. Its lowest value of total cost was $52,000 in December. The company makes a single product. The production volume in June and December were 13,000 and 7,000 units, respectively. What is the variable cost per month? (Round your answer to the nearest cent.) A) $1.38 per unit B) $2.57 per unit C) $3.00 per unit D) $11.67 per unit

The relevant production range for Orleans Trailers, Inc. is between 130,000 units and 180,000 units per month. If the company produces beyond 180,000 units per month, ________. A) the fixed costs will remain the same, but the variable cost per unit may change B) the fixed costs may change, but the variable cost per unit will remain the same C) the fixed costs and the variable cost per unit will not change D) both the fixed costs and the variable cost per unit may change

Porterhouse Company incurs both fixed and variable production costs. Assuming that production is within the relevant range, if volume goes up by 28%, then the total variable costs would ________. A) increase by 28% B) remain the same C) increase by an amount less than 28% D) decrease by 28%

Prudence Company incurs both fixed and variable production costs. Assuming that production is within the relevant range, if volume goes up by 28%, then the total fixed costs would ________. A) increase by 28% B) remain the same C) increase by an amount less than 28% D) decrease by 28%

The high-low method is used to ________. A) determine the highest price that can be charged for a product B) separate mixed costs into their variable and fixed components C) identify the relevant and irrelevant costs of a business D) determine the sales level at highest capacity

Kamal Company incurs both fixed and variable production costs. Assuming that production is within the relevant range, if volume goes up by 20%, then the total costs would ________. A) increase by 20% B) remain the same C) increase by an amount less than 20% D) decrease by 20%

Winslow, Inc., a tennis equipment manufacturer, has variable costs of $0.60 per unit of product. In August, the volume of production was 27,000 units, and units sold were 21,800. The total production costs incurred were $30,600. What are the fixed costs per month? A) $14,400 B) $17,520 C) $3,600 D) $16,200

Within the relevant range, which of the following costs remains the same irrespective of the changes in production? A) total mixed costs B) total operating costs C) total variable costs D) total fixed costs

When the total variable costs are deducted from total mixed costs, we obtain ________. A) mixed cost per unit B) variable cost per unit C) total high-low costs D) total fixed costs

Which of the following is the correct formula for calculating total mixed cost? A) Total mixed cost = (Variable cost per unit / Number of units) + Total fixed cost B) Total mixed cost = (Variable cost per unit × Number of units) - Total fixed cost C) Total mixed cost = (Variable cost per unit × Number of units) + Total fixed cost D) Total mixed cost = (Variable cost per unit / Number of units) - Total fixed cost

The dollar amount that provides for covering fixed costs and then provides for operating income is called ________. A) variable cost B) total cost C) contribution margin D) margin of safety

Which of the following is a period cost? A) manufacturing overhead B) direct labor cost C) direct materials cost D) administrative cost

A ________ groups cost by behavior; costs are classified as either variable costs or fixed costs. A) balance sheet B) contribution margin income statement C) traditional income statement D) absorption costing income statement

Which of the following appears as a line item in a contribution margin income statement? A) Gross profit B) Total cost of goods sold C) Operating income D) Total selling and administrative expenses

Galose Coffee Company sold 7,000 units in October at a sales price of $45 per unit. The variable cost is $20 per unit. The monthly fixed costs are $8,000. What is the operating income earned in October? A) $175,000 B) $315,000 C) $167,000 D) $140,000

Which of the following is not an assumption of cost-volume-profit (CVP) analysis? A) The only factor that affects total costs is a change in volume, which increases or decreases variable and mixed costs. B) The price per unit does not change as volume changes. C) Fixed costs do not change. D) The price per unit changes as volume changes.

Savannah Company sells glass vases at a wholesale price of $5 per unit. The variable cost of manufacture is $2.50 per unit. The fixed costs are $6,200 per month. It sold 5,700 units during this month. Calculate Savannah's operating income (loss) for this month. A) $22,300 B) $8,050 C) ($8,050) D) ($6,200)

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One of the assumptions of cost-volume-profit (CVP) analysis is that there are no changes in the ________. A) accounts payable B) cash balance C) inventory levels D) account receivables

Maywood Company sells hand-knit scarves. Each scarf sells for $40. The company pays $60 to rent vending space for one day. The variable costs are $15 per scarf. How many scarves should the company sell each day in order to break even? (Round your answer up to the nearest whole scarf.) A) 2 scarves B) 3 scarves C) 20 scarves D) 4 scarves

Winter Wonderland sells hand-knit scarves. Each scarf sells for $50. The company pays $30 to rent a vending space for one day. The variable costs are $10 per scarf. What total revenue amount does the company need to earn to break even? (Round any percentages to two decimal places and your final answer to the nearest cent.) A) $66.67 B) $37.50 C) $12.50 D) $50.00

Young Guns Company, which sells tents, has provided the following information: Sales price per unit $45 Variable cost per unit 11 Fixed costs per month $12,700 What are the required sales in units for Young to break even? (Round your answer up to the nearest whole unit.) A) 227 units B) 1,155 units C) 283 units D) 374 units

Madison Company has provided the following information: Sales price per unit $40 Variable cost per unit 18 Fixed costs per month $12,800 What is the amount of sales in dollars required for Madison to break even? (Round any percentages to two decimal places and your final answer to the nearest dollar.) A) $711 B) $23,273 C) $582 D) $12,800

Roberts Produce Company has fixed costs of $14,000. The company's contribution margin ratio is 46%, and the ratio of selling revenue to sales is 20%. What is the breakeven point in sales dollars? (Round your answer to the nearest dollar.) A) $70,000 B) $30,435 C) $6,440 D) $2,800

Hurst Company sells hand-sewn shirts for $40 per shirt. It incurs monthly fixed costs of $7,000. The contribution margin ratio is calculated to be 50%. What is the breakeven point in units? (Round your answer up to the nearest whole unit.) A) 175 units B) 3,500 units C) 80 units D) 350 units

________ is a "what if" technique that estimates profit or loss results if sales price, costs, volume, or underlying assumptions change. A) High-low method of analysis B) Sensitivity analysis C) Contribution margin D) Operating leverage