Homework Answers
| Q1. | |||||||||
| Answer is b. Committed fixed cost | |||||||||
| Q2. | |||||||||
| Answer is c. Quantitative estimate of both total fixed cost and variable cost per unit of the cost drivers. | |||||||||
| Explanation: | |||||||||
| Cost formula explains the total cost of the product at any level of production. It includes both the fixed cost in total and variable cost per unit. | |||||||||
| Q3. | |||||||||
| Answer is a. Administrative expenses | |||||||||
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The cost of purchase of plant and equipment is an example of a(n): a. unavoidable variable...
Turquoise Company manufactures travel bags. The high output occurred in May, with 1,000 units produced at...
Turquoise Company manufactures travel bags. The high output occurred in May, with 1,000 units produced at a total cost of $8,200. The low output was in January, with 600 units produced at a total cost of $3,200. Determine the variable rate by using the high and low points 55:33 b. 55.00 C. 58.20 12.50 Which of the following costs is classified as a period cost under variable costing? a. Variable manufacturing overhead b. The cost of direct materials c. Fixed...
The purpose of creating a cost formula is to provide: a. a quantitative estimate of both...
The purpose of creating a cost formula is to provide: a. a quantitative estimate of both total fixed costs and the variable cost per unit of the cost drivers. b. a qualitative estimate of only the variable cost per unit of the cost drivers c. a quantitative estimate of only the total fixed costs of the cost drivers. d. a qualitative estimate of both total fixed costs and the variable cost per unit of the cost drivers. Turquoise Company manufactures...
If the cost equation yields a coefficient of determination of 80%, it means that the: a....
If the cost equation yields a coefficient of determination of 80%, it means that the: a. independent variable explains 20% of the variability in cost. b, dependent variable explains 20% of the variability in cost. c, dependent variable explains 80% of the variability in cost. d, independent variable explains 80% of the variability in cost The following data relates to Mandarin Company. Units in beginning inventory Units produced Units sold ($300 per unit) Variable costs per unit: Direct materials Direct...
12. Costs that change abruptby at intervals of activity because the resources and their cost come...
12. Costs that change abruptby at intervals of activity because the resources and their cost come D. Step costs t.3. Which of the following terms appears on an income statement prepared using the approach but not on an income statement using absorption costing: ing income B. Gross profit C. Contribution margin D. Sales 14. Activities that affect costs are often called A. Cost drivers B. Stages of production C. Fixed activities D. Variable activities 15. At an activity level of...
Cost of advertising is an example of a discretionary fixed cost O semi-variable cost committed fixed...
Cost of advertising is an example of a discretionary fixed cost O semi-variable cost committed fixed cost variable cost
Which of the following costs is classified as a period cost under variable costing? O a....
Which of the following costs is classified as a period cost under variable costing? O a. Fixed manufacturing overhead O b. Variable manufacturing overhead O c. The cost of direct materials O d. The cost of direct labor Which of the following is true of a fixed cost? O a. Fixed costs in total vary in direct proportion to changes in output within the relevant range. O b. The per unit fixed cost increases with an increase in the level...
1) 2) 3) 4) 5) If variable costs per unit decreased because of a decrease in...
1)
2)
3)
4)
5)
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would Oa. decrease Ob. increase Oc. remain the same Od. increase or decrease, depending upon the percentage increase in utility rates If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage? Oa. 0.0 Ob. 1.3 Oc. 7.5 Od. 2.0 If fixed costs are $561,000 and the unit contribution margin...
Cost A Cost B Cost C Total Costs 60,000 units $75,000 $120,000 $65,000 $260,000 90,000 units...
Cost A Cost B Cost C Total Costs 60,000 units $75,000 $120,000 $65,000 $260,000 90,000 units $75,000 $180,000 $80,000 $335,000 Cost B is a cost. O A. sunk O B. fixed O c. mixed OD. variable Total fixed costs for Taylor Incorporated are $270,000. Total costs, including both fixed and variable, are $400,000 if 151,000 units are produced. The variable cost per unit is O A. $4.44/unit. O B. $1.79/unit O c. $2.65/unit. OD. $0.86/unit Which of the following would...
If marginal cost is below average variable cost OA) average variable cost is less than average...
If marginal cost is below average variable cost OA) average variable cost is less than average fixed cost. B) average total cost is increasing but average variable cost is decreasing. OC) both average total cost and average variable cost are increasing. D) both average total cost and average variable cost are decreasing.
Pierce Company had the following costs: Calculate the unit product cost using absorption costing and variable...
Pierce Company had the following costs:
Calculate the unit product cost using absorption costing and
variable costing.
Units produced 500 units Manufacturing costs: Direct materials Direct labor 25 per unit 45 per unit 15 per unit 5,000 per year Variable manufacturing overhead Fixed manufacturing overhead Selling and administrative costs: Variable selling and administrative costs 30 per unit 3,200 per year Fixed selling and administrative costs 1. Pierce Company had the following costs: Click on the icon to view the data.)...
Turquoise Company manufactures travel bags. The high output occurred in May, with 1,000 units produced at a total cost of $8,200. The low output was in January, with 600 units produced at a total cost of $3,200. Determine the variable rate by using the high and low points 55:33 b. 55.00 C. 58.20 12.50 Which of the following costs is classified as a period cost under variable costing? a. Variable manufacturing overhead b. The cost of direct materials c. Fixed...
The purpose of creating a cost formula is to provide: a. a quantitative estimate of both total fixed costs and the variable cost per unit of the cost drivers. b. a qualitative estimate of only the variable cost per unit of the cost drivers c. a quantitative estimate of only the total fixed costs of the cost drivers. d. a qualitative estimate of both total fixed costs and the variable cost per unit of the cost drivers. Turquoise Company manufactures...
If the cost equation yields a coefficient of determination of 80%, it means that the: a. independent variable explains 20% of the variability in cost. b, dependent variable explains 20% of the variability in cost. c, dependent variable explains 80% of the variability in cost. d, independent variable explains 80% of the variability in cost The following data relates to Mandarin Company. Units in beginning inventory Units produced Units sold ($300 per unit) Variable costs per unit: Direct materials Direct...
12. Costs that change abruptby at intervals of activity because the resources and their cost come D. Step costs t.3. Which of the following terms appears on an income statement prepared using the approach but not on an income statement using absorption costing: ing income B. Gross profit C. Contribution margin D. Sales 14. Activities that affect costs are often called A. Cost drivers B. Stages of production C. Fixed activities D. Variable activities 15. At an activity level of...
Cost of advertising is an example of a discretionary fixed cost O semi-variable cost committed fixed cost variable cost
Which of the following costs is classified as a period cost under variable costing? O a. Fixed manufacturing overhead O b. Variable manufacturing overhead O c. The cost of direct materials O d. The cost of direct labor Which of the following is true of a fixed cost? O a. Fixed costs in total vary in direct proportion to changes in output within the relevant range. O b. The per unit fixed cost increases with an increase in the level...
1)
2)
3)
4)
5)
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would Oa. decrease Ob. increase Oc. remain the same Od. increase or decrease, depending upon the percentage increase in utility rates If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage? Oa. 0.0 Ob. 1.3 Oc. 7.5 Od. 2.0 If fixed costs are $561,000 and the unit contribution margin...
Cost A Cost B Cost C Total Costs 60,000 units $75,000 $120,000 $65,000 $260,000 90,000 units $75,000 $180,000 $80,000 $335,000 Cost B is a cost. O A. sunk O B. fixed O c. mixed OD. variable Total fixed costs for Taylor Incorporated are $270,000. Total costs, including both fixed and variable, are $400,000 if 151,000 units are produced. The variable cost per unit is O A. $4.44/unit. O B. $1.79/unit O c. $2.65/unit. OD. $0.86/unit Which of the following would...
If marginal cost is below average variable cost OA) average variable cost is less than average fixed cost. B) average total cost is increasing but average variable cost is decreasing. OC) both average total cost and average variable cost are increasing. D) both average total cost and average variable cost are decreasing.
Pierce Company had the following costs:
Calculate the unit product cost using absorption costing and
variable costing.
Units produced 500 units Manufacturing costs: Direct materials Direct labor 25 per unit 45 per unit 15 per unit 5,000 per year Variable manufacturing overhead Fixed manufacturing overhead Selling and administrative costs: Variable selling and administrative costs 30 per unit 3,200 per year Fixed selling and administrative costs 1. Pierce Company had the following costs: Click on the icon to view the data.)...
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