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Brooklyn sells a single product to wholesalers. The company’s budget for the upcoming year revealed anticipated units 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
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
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