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Exam 1: Managerial Accounting and Cost Concepts

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Question 61

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Which of the following is correct concerning reactions to INCREASES in activity?

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Question 62

Multiple Choice

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In the standard cost formula Y = a + bX,what does the "Y" represent?

A) total cost
B) total fixed cost
C) total variable cost
D) variable cost per unit

E) A) and B)
F) A) and C)

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Question 63

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A fixed cost is constant if expressed on a per unit basis but the total dollar amount changes as the number of units increases or decreases.

Kneeland Corporation has provided the following information: If 10,000 units are produced,the total amount of manufacturing overhead cost is closest to:

Parlavecchio Corporation's relevant range of activity is 2,000 units to 6,000 units.When it produces and sells 4,000 units,its average costs per unit are as follows: Required: a.For financial reporting purposes,what is the total amount of product costs incurred to make 4,000 units? b.For financial reporting purposes,what is the total amount of period costs incurred to sell 4,000 units? c.If 5,000 units are sold,what is the variable cost per unit sold? d.If 5,000 units are sold,what is the total amount of variable costs related to the units sold? e.If 5,000 units are produced,what is the average fixed manufacturing cost per unit produced? f.If 5,000 units are produced,what is the total amount of fixed manufacturing cost incurred? g.If 5,000 units are produced,what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis?

To the nearest whole cent,what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)

An income statement for Sam's Bookstore for the first quarter of the year is presented below: On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. -The net operating income using the contribution approach for the first quarter is:

Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: -If 10,000 units are produced,the total amount of fixed manufacturing cost incurred is closest to:

To the nearest whole dollar,what should be the total cost of operating the helpline costs at a volume of 23,900 calls in a month? (Assume that this call volume is within the relevant range.)

Glisan Corporation's relevant range of activity is 4,000 units to 8,000 units.When it produces and sells 6,000 units,its average costs per unit are as follows: Required: a.For financial reporting purposes,what is the total amount of product costs incurred to make 6,000 units? b.For financial reporting purposes,what is the total amount of period costs incurred to sell 6,000 units? c.If 5,000 units are sold,what is the total amount of variable costs related to the units sold? d.If the selling price is $19.10 per unit,what is the contribution margin per unit sold? e.What incremental manufacturing cost will the company incur if it increases production from 6,000 to 6,001 units?

Dizzy donates $2 of every entrance fee to a local homeless shelter.This charitable contribution would best be described as a:

A factory supervisor's wages are classified as:

An income statement for Sam's Bookstore for the first quarter of the year is presented below: On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. -The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:

Within the relevant range,a change in activity results in a change in variable cost per unit and total fixed cost.

The relevant range is the range of activity within which the assumption that cost behavior is strictly linear is reasonably valid.

Morrisroe Corporation has provided the following information: Required: a.If the selling price is $25.90 per unit,what is the contribution margin per unit sold? b.What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

If the activity level increases,then one would expect the fixed cost per unit to increase as well.

A number of costs and measures of activity are listed below. Required: For each item above,indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Schwiesow Corporation has provided the following information: -If 4,000 units are sold,the total variable cost is closest to:

Lagle Corporation has provided the following information: -If 5,000 units are sold,the total variable cost is closest to: