Chapter 4 and 6 Quiz Review.docx

# Stanleys bicycles store buys bicycles on average for

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16. Stanley's Bicycles store buys bicycles on average for \$ 610 and sells them on average for \$ 790. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays \$ 1,500 a month rent for his store, and also pays \$ 5, 000 a month to his staff in addition to the commissions. Stanley sold 140 bicycles in June. If Stanley prepares a contribution margin income statement for the month of June, what would be his operating income? a. \$110,600 b. \$2,110 c. \$10,250 d. \$101,990 17. Stanley's Bicycles store buys bicycles on average for \$ 610 and sells them on average for \$ 790. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays \$ 1,900 a month rent for his store, and also pays \$ 3,000 a month to his staff in addition to the commissions. Stanley sold 140 bicycles in June. If Stanley prepares a contribution margin income statement for the month of June, what would be his operating income? 18. Total variable costs change in direct proportion to changes in volume.

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19. Using account analysis, what type of cost is an electric bill that charges a flat monthly fee plus a charge for each kilowatt hour of electricity used? 20. The high-low method uses only two of the historical data points to estimate a cost equation. a. True b. False 21. When preparing a scatterplot, how should the data be graphed? 22. The data points with the ________ should be selected for use in calculating the variable cost per unit and the total fixed costs when using the high-low method.
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