2009-07-29_122700_Mathew_2

# 2009-07-29_122700_Mathew_2 - 1)You are applying the...

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1)You are applying the scattergraph method and find that the regression line you have drawn passes through a data point with the following coordinates: 7,500 units and \$10,000. The regression line passes through the Y axis at the \$4,000 point. Which of the following is the cost formula that represents the slope of this line? a. Y=\$4,000+\$1.25X b. Y=\$4,000+\$0.80X c. Y=\$10,000+\$1.33X d. None of the above is true 2) Contribution margin is computed as sales revenue minus: a. fixed expenses b. variable expenses c. cost of goods sold d. cost of goods manufactured 3) A consulting company would like to develop a method of predicting its total costs in a period. The following past costs have been recorded by the company in two periods: Number of client hours= 420 515 Total cost=\$82,200 \$90,275 The best estimate of the cost formula for the company (where X is the number of client- hours) is: a. Y = \$46,500 + \$85 X b. Y = \$42,000 + \$95 X c. Y = \$46,500 – \$85 X d. Y = \$51,500 – \$95 X 4) Gasson Company is a merchandising firm. Next month the company expects to sell 800 units. The following data describe the company's revenue and cost structure: Selling price per unit=\$40 Sales commission= 5% Purchase price(cost) per unit=\$18 Advertising expense=\$4,000 per month Administrative expense=\$4,500 per month plus 15% of sales Assume that all activity mentioned in this problem is within the relevant range. The expected total administrative expense next month is: \$9,300 5) At an activity level of 8,400 machine-hours in a month, Braughton Corporation's total variable maintenance and repair cost is \$697,284 and its total fixed maintenance and repair cost is \$464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range. \$1,169,685

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6) Which of the following statements is true when referring to the high-low method of cost analysis? a. The high-low method has no major weaknesses. b. The high-low method is very hard to apply. c. In essence, the high-low method draws a straight line through two data points. d. None of the above is true. 7) Gasson Company is a merchandising firm. Next month the company expects to sell 800 units. The following data describe the company's revenue and cost structure: Selling price per unit=\$40 Sales commission= 5% Purchase price(cost) per unit=\$18 Advertising expense=\$4,000 per month Administrative expense=\$4,500 per month plus 15% of sales
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2009-07-29_122700_Mathew_2 - 1)You are applying the...

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