FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

As the level of activity increases,the total variable cost

A) Increases proportionally.
B) Changes inversely.
C) Changes conversely.
D) Remains the same.

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

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

The high-low method of estimating the fixed and variable components of a mixed cost is a precise approach that uses a statistical technique.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

International Imports is a merchandising firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total variable costs for the firm are:

If activity level increases,what happens to the total variable cost?

Three popular methods of identifying variable and fixed components of a cost are the scattergraph method,the high-low method and regression analysis.Compare and contrast these three methods.

Indicate which of the following costs are classified as mixed,step,or variable costs.

If selling price is $100 per unit, variable cost is $70 per unit, and fixed cost is $200, calculate the contribution margin ratio.

A contribution format income statement presents all costs

An example of a committed fixed cost is

International Imports is a merchandising firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total fixed costs for the firm are:

Mega Bright Window Cleaners' monthly income statement at several levels of activity is as follows: a.Identify each expense as fixed,variable,or mixed. b.Prepare a contribution margin income statement based on a volume of 5,000 windows.

FastPrint Company leases a machine that stuffs,seals,and stamps envelopes in one process.FastPrint's lease agreement calls for a base charge of $4,000 per year plus $0.25 for every envelope over 1,000 the machine processes per month. a.What is the firm's total annual cost for the lease if a total of 2,500 envelopes are processed each month? b.What is the firm's total processing cost per envelope at a level of 2,500 envelopes processed each month? c.What is the firm's processing cost per envelope if only 1,500 envelopes are processed each month?

Mike Mounts has a membership at the Marigold Men's Fitness Club.The membership costs $30 per month regardless of how many times the facility is used.The membership cost is classified as a:

Step costs are fixed over only a small range of activity.

Assume you are planning a spring break ski trip to Colorado.You are preparing a budget of your costs.You are staying at a lodge that has a special where the lodge charges you a flat fee of $25 for up to ten ski lift rides.You believe you will ride the ski lift 40 times during the week,so you budget $100.The ski lift charge is an example of a

The contribution margin is the difference between sales and fixed costs.

To calculate the unit cost of the Neoprene stockingfoot waders he sells, Gary Guinn added up all his costs and divided by the number of waders he sold during the year. He then used this unit cost to estimate total costs for the coming year. Explain why Gary’s method is not useful in predicting total costs for the coming year.

An example of a discretionary fixed cost for a clothing manufacturer is

The formula for the contribution margin ratio is

A 10 percent increase in sales volume will result in