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QUIZ 3_ACC312-Platt-Spr07_SOLUTION

QUIZ 3_ACC312-Platt-Spr07_SOLUTION - variable cost per unit...

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ACC 312 QUIZ #3 NAME VERSION A Section (circle): 11:00 12:30 2:00 1. Which one of the following graphs represents a Semi-Variable Cost? 2. Which one of the following does NOT describe the concept of “Relevant Range”? a. Often provides a justification for using a linear variable cost function. b. Needs to be considered if planning for a dramatic increase in production quantity. c. Includes the range of activity observed in historical data used for cost estimation. d. Illustrates the effect of a step-fixed cost. e. Applies to both fixed and variable costs. 3. In the High-Low Method of cost estimation, “high” and “low” are established according to the level of which of the following? 4. ZedCo must sell 36,000 units of its one product, Alpha, to break even. If its fixed costs are $162,000 and variable cost per unit of Alpha is 40% of selling price, what is the
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Unformatted text preview: variable cost per unit of Alpha? a. $3.00 b. $4.00 c. $4.50 d. $5.00 e. $7.50 5. TechCo has an Operating Leverage Factor of 8.0. If its Variable Cost (in total) is $100,000 and its Operating Income is $50,000, how much is Fixed Cost (total)? a. $12,500 b. $300,000 c. $350,000 d. $400,000 e. $800,000 Answers Here a. b. c. d. a d d a c Q $ Q $ Q $ Q $ OLF 8.0 x OI $50k = CM $400k; CM $400k – FC ?? = OI $50k; so solving FC = $350k B/E Units 36k = FC $162k / CM/Unit ??; solving CM/Unit = $4.50; Price – VC = CM, and we know that VC = .4P and CM = $4.50; so P - .4P = $4.50; and solving P = $7.50 so VC = (.4)(7.50) = $3.00. Note that graphs have been reordered in different versions of quiz, so answer is not always d....
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