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Exam 3: Cost Behaviour

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Question 61

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For each of the following statements,fill in the blank with either the word increase,decrease,or stay the same. a.As production decreases,total fixed costs ______________. b.As production decreases,fixed costs per unit _____________. c.As production increases,variable costs per unit _____________. d.As production increases,total variable costs _______________.

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a.
As production decreases,total fixed c...

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Question 62

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Mr. Quik Printers Mr. Quik Printers documented the number of copies it made for customers as well as total overhead costs for the past five months as follows: $\begin{array} { l c c } & \text { Number of copies } & \text { Total overhead costs } \\\hline \text { October } & 230000 & \$ 7400 \\\text { November } & 240000 & 7500 \\\text { December } & 280000 & 8000 \\\text { January } & 265000 & 7700 \\\text { February } & 248000 & 7550\end{array}$ -Using the high/low method,what is the variable cost per unit?

A) $ .012
B) $ .030
C) $33.11
D) $83.33

E) None of the above
F) B) and C)

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Question 63

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Assuming that the number of units produced is less than the number of units sold,which of the following statements is true when comparing net income using absorption and variable costing?

Which of the following costs is the least likely to be classified as a fixed cost?

Under absorption costing,which of the following is not considered a product cost?

Preferred Products has the following cost information available for 2009: $\begin{array}{lr} \text { Direct materials} &\text { \$ 4.00 per unit}\\ \text { Direct labour} &\text {\( \$ 3.00 \) per unit}\\ \text { Variable manufacturing overhead } & \text {\( \$ 2.00 \) per unit}\\ \text { Variable selling and administrative costs } &\text {\( \$ 1.00 \) per unit}\\ \text { Fixed manufacturing overhead} &\text {\( \$ 25000 \)}\\ \text { Fixed selling and administrative costs } & \text {\( \$ 10000 \)}\\\end{array}$ During 2009,Preferred produced 5000 units out of which 4600 units were sold for $30 each. Required: A. Calculate Preferred's net income assuming the company uses variable costing. B. Calculate Preferred's net income assuming the company uses absorption costing