Accounting

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Question 1 Most operating decisions of management focus on a narrow range of activity called the: relevant range of production strategic level of production optimal level of production tactical operating level of production Question 2 Which of the following is NOT an example of a cost that varies in total as the number of units produced changes? Electricity per KWH to operate factory equipment Direct materials cost Insurance premiums on factory building Wages of assembly worker Question 3 A cost that has characteristics of both a variable cost and a fixed cost is called a: variable/fixed cost mixed cost discretionary cost sunk cost Question 4 Which of the following costs is a mixed cost? Salary of a factory supervisor Electricity costs of $2 per kilowatt-hour Rental costs of $5,000 per month plus $.30 per machine hour of use Straight-line depreciation on factory equipment Question 5 Given the following cost and activity observations for Bounty Company’s utilities, use the high-low method to calculate Bounty’ variable utilities costs per machine hour. C o s t Machine Hours March $3,100 15,000 April 2,700 10,000 May 2,900 12,000 June 3,600 18,000 $10.00 $.67 $.63 $.11 Question 6
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Given the following cost and activity observations for Smithson Company’s utilities, use the high-low method to calculate Smithson’s fixed costs per month. Round variable cost per unit to two decimal places in your calculations. C o s t Machine Hours January $52,200 20,000 February 75,000 29,000 March 57,000 22,000 April 64,000 24,500 $1,630 $50,000 $12,500 $5,000 Question 7 The manufacturing cost of Prancer Industries for three months of the year are provided below: Total Cost Production April $ 60,700 1,200 Units May 80,920 1,800 June 100,300 2,400 Using the high-low method, the variable cost per unit, and the total fixed costs are: $32.30 per unit and $77,520 respectively. $33 per unit and $21,100 respectively. $32 per unit and $76,800 respectively. $32.30 per unit and $22,780 respectively. Question 8 Cool-It Company manufactures and sells commercial air conditioners. Because of current trends, it expects to increase sales by 15 percent next year. If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year’s total amounts for the following costs. Variable Costs Fixed Costs Mixed Costs increase increase increase increase no change increase no change no change increase decrease increase increase Question 9 Given the following costs and activities for Downing Company electrical costs, use the high-low method to calculate Downings’s variable electrical costs per machine hour. Costs Machine Hours
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April $11,700 15,000 May $13,200 17,500 June $11,400 14,500 2.08 6.00 .60 1.20 Question 10 The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed: contribution margin analysis cost-volume-profit analysis budgetary analysis gross profit analysis Question 11 What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?
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This document was uploaded on 03/09/2012.

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test 2 - Question 1 Most operating decisions of management...

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