Chapter 6(1) - Chapter 6 Self-study Quiz 1 A disadvantage...

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Chapter 6 Self-study Quiz 1. A disadvantage of the high-low method of cost analysis is that: a. it cannot be used when there are a very large number of observations. b. it is too time consuming to apply. c. it uses two extreme data points, which may not be representative of normal conditions. d. it relies totally on the judgment of the person performing the cost analysis. 2. The following information pertains to activity and costs for two recent months: October November activity level in units 5,000 10,000 variable costs $ 10,000 ? fixed costs 30,000 ? Mixed costs 20,000 ? total costs $ 60,000 $ 75,000 Assuming that these activity levels are within the relevant range, the mixed costs for November were: 3. Marger, Inc. is attempting to classify costs according to their cost behavior. Data concerning activity and costs are listed below: April May Sales in units…………….. 3,200 4,500 Cost: Cost A………………. $5,600 $5,600 Cost B………………. 4,480 6,300 Cost C………………. 3,950 5,250 The costs would be classified as follows: Cost A Cost B Cost C
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  • Spring '12
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