QUESTION 1 An easy way to estimate the variable and fixed costs components of a mixed cost is by: a scatter plot. the high-low method. a regression analysis. a guesstimate. 4 points QUESTION 2 What term represents the total cost in the equation: y = vx + f? vx 4 points QUESTION 3 Two types of costs that each combine fixed cost and variable cost behaviors are: capacity and incremental costs. semi-fixed and semi-variable costs. composite and average costs. step and mixed costs. 4 points QUESTION 4 Costs that change abruptly at different levels of activity because the resources are available only in indivisible chunks are called: mixed costs. variable costs. fixed costs. step costs. 4 points QUESTION 5 If a company’s overhead cost equation is y = $8.80x + $120,020. The x is: the volume of activity. the total fixed costs. the total overhead costs. the total variable costs. 4 points QUESTION 6 A compensation plan where the sales force is paid a fixed salary plus commission based on sales is a: purely variable cost. mixed cost. step cost. fixed cost. 4 points QUESTION 7 The representation for total variable costs is: y = vx + f. y = vx. y = vx – f. y = vx + f. 4 points QUESTION 8 Total costs for Bell & Bunn Corporation at 120,000 units are $289,000, while total fixed costs are $145,000. The total variable costs at a level of 250,000 units would be: $300,000. $602,083. $138,720. $302,083. 4 points QUESTION 9 The relevant range applies to: variable costs only. fixed costs only. fixed costs and variable costs. step costs. 4 points QUESTION 10 Which example is NOT a step cost? When oil and gas exploration activity reaches a certain level in a given area, a company leases an additional rig. The lease cost of the rig is a step cost. When 10 nurses are added to a shift, a nursing supervisor is also added to the shift. The salaries of the nursing supervisors are a step cost. When a telemarketing company adds ten workers to a shift, a supervisor is also added to the shift. The salaries of the supervisors are a step cost. When a manufacturing company ceases production, a skeleton crew of maintenance workers continues to work, but the rest are terminated. When production resumes, maintenance workers are rehired in direct proportion to the amount of production. The wages of the maintenance workers are a step cost. 4 points QUESTION 11 The controller for Camden’s Bike Shop has gathered the following cost and activity level information: Average total cost per unit $225.00 Production level used to calculate average cost 1,000 Total fixed costs $80,000 What is the total cost of producing 1,000 racing bicycles? What is the variable cost of producing each racing bicycle? Suppose the controller uses the average cost to predict total costs. What total cost would the controller calculate for 2,500 racing bicycles? If the controller uses the cost equation to predict total costs, what total cost would the controller calculate for 2,500 racing bicycles? Is there a difference between the forecasted total cost using average cost versus the cost equation? If there is a difference, what creates the difference? If there is no difference, when would there be a difference? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph Open Sans,sans-serif 10pt P 0 WORDSPOWERED BY TINY 20 points QUESTION 12 The managerial accountant at Fast and Mean Manufacturing reported that the organization contains an automated production line to manufacture and produce its products for consumers to enjoy in the marketplace. The managerial accountant reported that the company uses the high-low method to estimate the costs in the new budget. The managerial accountant reported the following information: Month Total Machine-Hours Total Costs January 250,000 $5,500,000 February 248,000 $5,260,000 March 249,000 $5,400,000 April 248,000 $5,220,000 May 238,000 $5,180,000 June 230,000 $5,130,000 Compute the slope of the mixed cost, or the variable cost per unit of activity. Compute the vertical intercept, or the fixed cost component of the mixed cost. What is the mixed cost equation? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph Open Sans,sans-serif 10pt P 0 WORDSPOWERED BY TINY 20 points QUESTION 13 The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information: Sunny Manufacturing Cost Report January – June 20XX Month Machine-Hours Total Costs January 1,800 $21,500 February 2,900 $23,200 March 1,000 $19,750 April 2,400 $21,000 May 3,400 $23,900 Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph Open Sans,sans-serif 10pt P 0 WORDSPOWERED BY TINY 20 points Click Save and Submit to save and submit. Click Save All Answers to save all answers.
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