Question 1

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Accepted Answer

A)  $100,800
B)  $115,200
C)  $129,600
D)  It cannot be determined from the information given.E) B) and C)
F) A) and D) C

Question 2

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Accepted Answer

A)  $5.00
B)  $12.50
C)  $15.00
D)  $17.08E) A) and B)
F) A) and C)

Question 3

Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Accepted Answer

A)  $2.00
B)  $5.00
C)  $7.00
D)  $10.00E) A) and C)
F) A) and D)

Question 4

Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

Accepted Answer

A)  $30.00.
B)  $82.50.
C)  $17,500.
D)  $35,000.E) C) and D)
F) A) and B)

Question 5

Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Accepted Answer

A)  $18,000
B)  $45,000
C)  $50,000
D)  $90,000E) B) and D)
F) B) and C) C

Question 6

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

Accepted Answer

A)  $40,500
B)  $90,000
C)  $111,111
D)  $200,000E) C) and D)
F) A) and B) D

Question 7

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Accepted Answer

A)  $60,000
B)  $315,000
C)  $340,000
D)  $400,000E) None of the above
F) A) and B)

Question 8

Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Accepted Answer

A)  $40,000
B)  $100,000
C)  $60,000
D)  $300,000E) B) and C)
F) B) and D)

Question 9

Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Accepted Answer

A) True 
 B)False

Question 10

The slope of the cost line on a scattergraph represents

Accepted Answer

A)  fixed cost per unit.
B)  total fixed cost.
C)  variable cost per unit.
D)  sales price per unit.E) All of the above
F) B) and D)

Question 11

Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Accepted Answer

A)  $9.
B)  $6.
C)  negative $9.
D)  negative $0.0009.E) All of the above
F) B) and C)

Question 12

McNeil uses the high-low method of estimating costs.McNeil had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.What would McNeil estimate its total cost to be if sales equaled 8,000 units?

Accepted Answer

A)  $32,000
B)  $52,000
C)  $62,000
D)  $80,000E) B) and D)
F) B) and C)

Question 13

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Accepted Answer

A)  It is impossible to determine.
B)  4.83%
C)  95.17%
D)  97.55%E) A) and B)
F) B) and D)

Question 14

Which of the following statements is true?

Accepted Answer

A)  Fixed costs are constant on a per unit basis.
B)  Variable costs per unit decrease as activity volume increases.
C)  Variable costs are constant in total dollars.
D)  Fixed costs are constant in total dollars.E) C) and D)
F) B) and C)

Question 15

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Accepted Answer

A)  $28,000.
B)  $30,000.
C)  $64,000.
D)  $128,000.E) C) and D)
F) A) and B)

Question 16

The contribution margin ratio is

Accepted Answer

A)  the difference between sales revenue and variable costs.
B)  the difference between variable costs and fixed costs.
C)  variable costs divided by fixed costs.
D)  contribution margin per unit divided by sales price per unit.E) None of the above
F) B) and C)

Question 17

Profit will be the same under variable costing as under full absorption costing whenever

Accepted Answer

A)  production is greater than sales.
B)  production is the same as sales.
C)  production is less than sales.
D)  variable costing is chosen for external reporting purposes.E) A) and C)
F) C) and D)

Question 18

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Accepted Answer

A)  Total cost = $175,003 + ($11.57 × Production) 
B)  Total cost = $61,603 + ($0.92 × Production) 
C)  Total cost = $175,003 + ($61,603 × Production) 
D)  Total cost = $11.57 + ($0.9213 × Production) E) C) and D)
F) B) and D)

Question 19

Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Accepted Answer

A)  fixed cost.
B)  mixed cost.
C)  variable cost.
D)  step cost.E) A) and B)
F) B) and C)

Question 20

Which of the following is a mixed cost?

Accepted Answer

A)  A cost that is $32.00 per unit when production is 80,000,and $32.00 per unit when production is 128,000.
B)  A cost that is $32.00 per unit when production is 80,000,and $40.00 per unit when production is 128,000.
C)  A cost that is $32.00 per unit when production is 80,000,and $26.00 per unit when production is 128,000.
D)  A cost that is $64.00 per unit when production is 80,000,and $64.00 per unit when production is 128,000.E) None of the above
F) A) and B)

Exam 5: Cost Behavior

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Correct Answer
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C

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Correct Answer
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Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Correct Answer
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Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

Correct Answer
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Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Correct Answer
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C

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

Correct Answer
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D

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Correct Answer
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Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Correct Answer
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Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Correct Answer
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The slope of the cost line on a scattergraph represents

Correct Answer
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Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Correct Answer
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Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Correct Answer
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Which of the following statements is true?

Correct Answer
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Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Correct Answer
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The contribution margin ratio is

Correct Answer
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Profit will be the same under variable costing as under full absorption costing whenever

Correct Answer
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Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Correct Answer
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Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Correct Answer
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Which of the following is a mixed cost?

Correct Answer
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Exam 5: Cost Behavior

When Carter,Inc.sells 48,000 units,its total variable cost is $115,200.What is its total variable cost when it sells 54,000 units?

Correct AnswerverifiedC

Rose Corp.has contribution margin of $65,000,variable costs of $10 per unit,and fixed costs of $25,000.If Rose sells 13,000 units,what was the selling price per unit?

Correct AnswerverifiedShow Answer

Gardenia Corp.has a selling price of $15,fixed costs of $25,000,and contribution margin of $65,000.If Gardenia sells 13,000 units,how much are variable costs per unit?

Correct AnswerverifiedShow Answer

Palm,which uses the high-low method,had an average cost per unit of $50 at its lowest level of activity when sales equaled 1,000 units and an average cost per unit of $32.50 at its highest level of activity when sales equaled 2,000 units.Palm would estimate fixed costs as

Correct AnswerverifiedShow Answer

Booble,Inc.has a contribution margin ratio of 45%.This month,sales revenue was $200,000,and profit was $40,000.How much are Booble's fixed costs?

Correct AnswerverifiedC

Rodeo,Inc.has a contribution margin ratio of 45%.This month,profit was $40,000 and fixed costs were $50,000.How much was Rodeo's sales revenue?

Correct AnswerverifiedD

Jasper Enterprises had the following cost and production information for April: How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?

Correct AnswerverifiedShow Answer

Sugar Corp has a selling price of $20,variable costs of $12 per unit,and fixed costs of $25,000.Maple expects profit of $300,000 at its anticipated level of production.If Sugar sells 5,000 units more than expected,how much higher will its profits be?

Correct AnswerverifiedShow Answer

Contribution margin plus variable cost per unit equals total sales revenue.Contribution margin plus total variable costs equals total sales revenue.

Correct AnswerverifiedShow Answer

The slope of the cost line on a scattergraph represents

Correct AnswerverifiedShow Answer

Carson,which uses the high-low method,reported total costs of $24 per unit at its lowest activity level,when production equaled 10,000 units.When production doubled,at its highest activity level,the total cost per unit dropped to $15.Carson would estimate variable cost per unit as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: How much of the variation in cost is not explained by production?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as

Correct AnswerverifiedShow Answer

The contribution margin ratio is

Correct AnswerverifiedShow Answer

Profit will be the same under variable costing as under full absorption costing whenever

Correct AnswerverifiedShow Answer

Star,Inc.used Excel to run a least-squares regression analysis,which resulted in the following output: What is Star's formula for estimating costs?

Correct AnswerverifiedShow Answer

Mohave,Inc.places a quality assurance logo on each of its units.To use this logo,it must pay the quality assurance firm $5,000 per month plus $1 per unit.The cost to Mohave of using the quality assurance logo would be a

Correct AnswerverifiedShow Answer

Which of the following is a mixed cost?

Correct AnswerverifiedShow Answer

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C

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C

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D

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