- Brooklyn sells a single product to wholesalers. The company’s budget for the upcoming year revealed anticipatedunits sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed cost of $360,000. If Brooklyn’s unit sales are 200 units less than anticipated, it’s breakeven point will:
- Increase by $12 per units sold
- Decrease by $12 per units sold
- Increase by $8 per units sold
- Not change
- Which of the following methods of cost estimation relies on only two data points?
- Least squares regression
- The high low method
- The visual fit method
- Account regression
- A company observed a decrease in the cost per unit. All other things being equal which of the following is probably true?
- The company is studying a variable cost, and the total volume has increased
- The company is studying a variable cost and the volume has decreased
- The company is studying a fixed cost and total volume has increased
- The company is studying a fixed cost and the volume has decreased
- The company is studying a fixed cost and the total volume has remained constant
- Which of the following cost changes in direct proportion to a change in the activity level?
- Variable cost
- Fixed cost
- Semi variable cost
- Step fixed cost
- Within the relevant range, a curvilinear cost function can sometimes be graphed as a :
- Sloping straight line
- Jagged line
- Vertical straight line
- Curved line
- Horizontal straight line
- Swanson and Associates presently lease a copy machine under an agreement that calls for fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March: in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze cost. How much would Swanson’s pay if made 5,500 copies?
- $382.50
- $322, $300
- $292.50
- An amount other than those given
- Swanson and Associates presently lease a copy machine under an agreement that calls for fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March: in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze cost. Swanson’s monthly fixed fee is:
- $80
- $102
- $106
- $112
- An amount other than those given
- Yellow Dot, Inc. sells a single product for $10. Variable cost are $4 per unit and fixed cost total $120,000 at a volume level of 10,000 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of $240,000
- $400,000
- $500,000
- $600,000
- $750,000
- $900,000
- A manager who wants to determine the percentage impact on income of a given percentage change is sales would multiply the percentage increase/decrease in sales revenue by the:
- Contribution margin
- Gross margin
- Operating leverage factor
- Safety margin
- Contribution margin ratio
- DuChien Corporation recently produced and sold 100,000 units. Fixed cost at this level of activity amounted to $50,000; variable cost were $100,000. How much coat would the company anticipate id during the next period it produced and sold $102,000 units?
- $150,000
- $151,000
- $152,000
- $153,000
- Some other amount not listed
- Swanson and Associates presently leases a copy machine under an agreement that calls for fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March: in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze cost. Swanson’s variable cost per copy is:
- $0.040
- $0.051
- $0.053
- $0.056
- An amount other than those given above
- Northlake Inc. uses the high low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance cost averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company’s fixed maintenance cost were:
- $24,000
- $90,000
- $210,000
- $234,000
- An amount other than those listed above
- At a volume of 20,000 units, Dries reported sales revenue of $1,000,000, variable cost of $300,000, and fixed cost of $260,000. The company’s break-even point in units is:
- 7,027 (rounded)
- 8,667 (rounded)
- 9,286 (rounded)
- 7,429 (rounded)
- An amount other than those listed above
- A forecast of a cost at a particular level of activity is termed:
- Cost estimation
- Cost prediction
- Cost behavior
- Cost analysis
- Cost approximation
- Booster, Inc. recently conducted a lest- squares regression analysis to predict selling expenses. The company has constructed the following regression equation: Y = 329,000 + 7.08X. Which of the following statements is false if the primary cost driver is number of units sold?
- The company anticipates $329,000 of fixed selling expenses
- “Y” represents total selling expense
- The company expects both variable and fixed selling expenses
- For each unit sold, total selling expenses will increase by $7.08
- “X” represents the number of hours worked during the period
- At a volume of 20,000 units, Dries reported sales revenue of $1,000,000, variable cost of $300,000, and fixed cost of $260,000. The company’s contribution margin per units is:
- $22
- $28
- $35
- $37
- An amount other than those listed above
- The difference between budgeted sales revenue and break-even sales revenue is the :
- Contribution margin
- Contribution margin ration
- Safety margin
- Target net profit
- Operational leverage
- The contribution margin ratio is:
- The difference between the selling price and the variable cost per unit
- Fixed cost per unit divided by variable cost per unit
- Variable cost per unit divided buy the selling price
- Unit contribution margin divided by the selling price
- Unit contribution margin divided by the fixed cost per unit
- A company has fixed cost of $900 and a per unit contribution margin of $3. Which of the following statement is (are) true?
- Total contribution margin equals the sum of variable cost plus fixed cost
- The situation described is not possible and there must be an error
- Once the break even point is reached, the company will increase income at the rate of $3 per unit
- The firm will definitely lose money in this situation
- Ribco Co. makes and sells only one product. The unit contribution margin is $6 and break even point in unit sales is 24,000. The company’s fixed cost are:
- $4,000
- $14,400
- $40,000
- $144,000
- An amount other than those above