MSQ-01 - Activity Cost & CVP Analysis (Final)

# 6 total production costs of prior periods for a

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6. Total production costs of prior periods for a company are listed as follows. Assume that the same cost behavior patterns can be extended linearly over the range of 3,000 to 35,000 units and that the cost driver for each cost is the number of units produced. Production in units per month 3,000 9,000 16,000 35,000 Cost X \$23,700 \$52,680 \$86,490 \$178,260 Cost Y 47,280 141,840 252,160 551,600 What is the average cost per unit at a production level of 8,000 units for cost X? A . \$5.98 B. \$5.85 C. \$7.90 D. \$4.83 7. Ultra Vogue Co. sells 50,000 units of “yo” a top-of-the-line garden sprinkler. These were taken from the company’s records: Accounts receivable, P129,000. Contribution margin ratio, 49%. Days sales outstanding, 15 days. Profit for the period was P485,040. The ending receivables balance is the average balance during the year. Assume a 360-day year. All sales are on credit. Determine the company’s break-even revenue. A . P2,106,122 B. P1,032,000 C. P3,096,000 D. P1,517,040 MSQ-01 Page 6

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8. Sago Co. uses regression analysis to develop a model for predicting overhead costs. Two different cost drivers (machine hours and direct materials weight) are under consideration as the independent variable. Relevant data were run on a computer using one of the standard regression programs, with the following results: Coefficient Machine hours Direct materials weight Y intercept 2,500 4,600 B 5.00 2.60 R 2 0.70 0.50 What regression equation should be used? A . Y = 2,500 + 5.0X C. Y = 4,600 + 2.6X B. Y = 2,500 + 3.5X D. Y = 4,600 +1.3X
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