Fluent Essays

just answer all the questions in the word file that havent been answered in green. however, no longer than 1 hours. I set the time as 10 because i cant choose people answer.docx Unformatted Attachment Preview 1. Cost behavior is A. the difference between sales revenue and fixed costs. B. the same as absorption costing. C. the amount of sales necessary to achieve a specific profit. D. the way in which costs change when the activity level changes. 2. A cost driver A. is the same as a fixed cost. B. is the same as margin of safety. C. is an activity that causes total costs to change. D. is a method of calculating mixed costs. 3. Relevant range A. only applies to variable costs. B. is the range of activity over which our assumptions about cost behavior are true. C. is defined as the break-even point. D. increases in total as the activity level increases. 4. A cost that changes, in total, in direct proportion to changes in activity levels is a(n) A. absorption cost. B. contribution margin. C. variable cost. D, fixed cost. 5. Which of the following statements is true? A. Fixed costs are constant on a per unit basis. B. Variable costs per unit stay the same as activity volume increases. C. Variable costs are constant in total dollars. D. Fixed costs per unit increase as activity volume inceases. . 6. If sales revenue decreases, variable costs will A. decrease in total. B. increase in total. C. decrease on a per unit basis. D. increase on a per unit basis. 7. If sales revenue increase, fixed costs will A. decrease in total. B. increase in total. C. increase on a per unit basis. D. decrease on a per unit basis. 8. A steep slope of the cost line on a scatter graph represents A. A strong relationship between X and Y, where prices can be set. B. fixed cost per unit. C. total fixed cost. D. total variable cost. 9. Total contribution margin is defined as A. contribution margin per unit times units sold. B. cost to produce times units sold. C. selling price times units sold. D. total variable costs less fixed costs. 10. The unit contribution margin A. equals total sales revenue minus total variable costs. B. tells us how much each additional unit sold will increase profit. C. equals total contribution margin times total units. D. equals overall profit per unit. 11. The contribution margin ratio is A. the contribution margin stated as a percentage of total costs. B. the contribution margin stated as a percentage of sales. C. the contribution margin stated as a percentage of profit. D. the contribution margin stated as a percentage of variable costs. 12. The formula for break-even point in terms of units is A. Total costs/Unit contribution margin B. Total fixed costs/Unit contribution margin C. Total fixed costs/Contribution margin ratio D. Total variable costs/Total fixed costs 13. Degree of operating leverage is used to A. calculate profit change given sales change. B. calculate sales change given profit change. C. calculate break-even sales given sales change. D. calculate break-even sales given profit change. 14. A relevant cost is A. the foregone benefit of choosing to do one thing instead of another. B. a cost that has already been incurred. C. a variable cost that is the same regardless of the alternative the manager chooses. D. cost that differs across decision alternatives. 15. The foregone benefit of choosing one alternative over another is measured by: A. opportunity costs. B. activity-based costs. C. differential costs. D. capital costs 16. Which of the following is not another term for relevant costs? A. Differential costs B. Opportunity costs C. Incremental costs D. Avoidable costs 17. A make-or-buy decision is the same as: A. an outsourcing decision. B. an opportunity cost. C. a keep-or-drop decision. D. a sunk cost. 18. Which of the following is irrelevant to the decision to eliminate an unprofitable segment? A. The segment margin B. Direct fixed costs C. Common fixed costs D. Segment revenue 19. Which of the following is not relevant to a sell-or-process further decision? A. The cost of processing the product as is. B. The cost of processing the product further. C. The opportunity cost of spending resources processing the product further. D. The incremental revenue from processing the product further. 20. Which of the following statements is false? A. Sunk costs are never relevant. B. Sunk costs are costs that occurred in the past. C. To be relevant, a cost must be an opportunity cost. D. To be relevant, a cost must occur in the future. Part II – Problems -Cost behavior, - 3.0 points each. Total = 24 points. 1.When Sherka, Inc. sells 40,000 units, its total variable cost is $104,000. What is its total variable cost when it sells 45,000 units? A. $84,000 B. $96,000 C. $108,000 D. $117,000 2. When Sherka, Inc. sells 40,000 units, its total fixed cost is $96,000. What is its total fixed cost when it sells 45,000 units? A. $84,000 B. $96,000 C. $108,000 D. It cannot be determined from the information given. 3. The per-unit amount of three different production costs for Thunderbird, Inc., are as follows: Production = 16,000 Production = 64,000 Cost A (per unit) $ 32.00 $ 8.00 Cost B (per unit) $ 24.00 $ 18.00 What type of cost is each? A) Cost A is fixed, Cost B is mixed, Cost C is variable. B) Cost A is fixed, Cost B is variable, Cost C is mixed. C) Cost A is variable, Cost B is mixed, Cost C is fixed. D) Cost A is variable, Cost B is fixed, Cost C is mixed. Cost C (per unit) $ 19.20 $ 19.20 4, 5, 6 (9 points) Island Enterprises has presented the following information for the past eight months operations: Month April May June July August September October November Units 4,000 3,200 1,400 2,800 3,500 4,200 3,900 3,400 Total Cost $ 17,600 $ 14,900 $ 11,100 $ 13,200 $ 16,000 $ 17,400 $ 16,500 $ 15,700 4, 5 Using the high-low method, calculate the variable cost per unit (3 pts) and fixed cost per month (3 pts). 6. What would total costs be for a month with 3,000 units produced (3pts)? 7. Arnold Corp has fixed costs of $25,000. Arnold expects profit of $325,000 at its anticipated level of production, 50,000 units. What is Arnolds unit contribution margin? A. $5 B. $10 C. $7 D. $20 8. Arnold Corp has a selling price of $20, variable costs of $16 per unit, and fixed costs of $25,000. If Arnold sells 12,000 units, the contribution margin ratio will equal A. $60,000 B. 25\% C. 14.6\% D. 20.\% Part III – Problems - CVP, - 3.0 points each. Total = 24 points. 1. Thunder Corp. has a selling price of $25 per unit, variable costs of $20 per unit, and fixed costs of $35,000. How many units must be sold to break even? A. 7,000 B. 14,000 C. 3,500 D. 2,334 2. Last month Kallina Company had a $30,000 profit on sales of $250,000. Fixed costs are $60,000 a month. What sales revenue is needed for Calico to break even? A. $166,667 B. $90,000 C. $30,000 D. $280,000 3. Nyota Corp sells two products. Product A sells for $100 per unit, and has unit variable costs of $60. Product B sells for $70 per unit, and has unit variable costs of $50. Currently, Nyota sells three units of product B for every one unit of product A sold. Nyota has fixed costs of $750,000. What is Nyotas breakeven point in units? A. 30,000 units of A and 30,000 units of B B. 7,500 units of A and 22,500 units of B C. 22,500 units of A and 7,500 units of B D. 15,000 units of A and 15,000 units of B 4. Perisia, Inc. has fixed costs of $200,000, sales price of $50, and variable cost of $30 per unit. How many units must be sold to earn profit of $50,000? A. 2,500 B. 10,000 C. 12,500 D. 20,000 5. Perisia, Inc. has fixed costs of $200,000 and a contribution margin ratio of 40\%. How much sales revenue must be earned for a profit of $50,000? A. $125,000 B. $500,000 C. $625,000 D. $1,000,000 6. Boose Corp has fixed costs of $500,000 and a contribution margin ratio of 25\%. Currently, sales are $3,000,000. What is Booses margin of safety? A. $1,000,000 B. $2,000,000 C. $3,000,000 D. $4,000,000 7. Frank Corp has a contribution margin of $600,000 and profit of $150,000. What is its degree of operating leverage? A. .25 B. 4 C. 2.5 D. 3 8. In year ended December 31, 2019, Frank Corp had a contribution margin of $600,000 and profit of $150,000. If sales increase 30\%, what will profits be in December 31,2020? A. $330,000 B. $195,000. C. $180,000 D. $600,000 Part IV – Problems –Analysis - 3.0 points each. Total = 12 points. 1. Dot has received a special order for 2,000 units of its product at a special price. The product normally sells for $200 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit $ 60 40 30 50 $ 180 Assume that Dot has sufficient capacity to fill the order without harming normal production and sales. What minimum price should Dot charge to achieve a $50,000 incremental profit? A) $225 B) $155 C) $168 D) $180 2. Olive Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Per unit $ 12 8 12 8 $ 40 An outside supplier has offered to provide Olive Corp. with the 20,000 subcomponents at a $36 per unit price. Fixed overhead is not avoidable. If Olive Corp. accepts the outside offer, what will be the effect on short-term profits? A) $160,000 decrease B) $320,000 increase C) $160,000 increase D) $80,000 decrease 3. Davenport Inc. has two divisions, Howard and Jones. Following is the income statement for the past month: Sales Variable Costs Howard $ 800,000 600,000 Contribution Margin Fixed Costs (allocated) $ 200,000 150,000 $ 20,000 150,000 $ 220,000 300,000 Profit Margin $ $ (130000) $ (80,000) 50,000 $ Jones 600,000 580,000 Total $ 1,400000 $ 1,180000 What would Davenports profit margin be if the Jones division was dropped? A) $80,000 loss B) $100,000 loss C) $50,000 profit D) $70,000 profit 4. Dardon Company currently produces three products from a joint process. The joint process has total costs of $250,000 per month. All three products, A, B & C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: A B Units 50,000 75,000 Immediate Sales Price $ 5 $ 10 Later Sales Price $ 10 $ 15 C 100000 $ 15 $ 17 Unit Cost of Further Processing $ 6 $ 4 $ 3 Which of the products should be sold immediately without further processing? A) Product A only B) Products B and C C) Products A and C D) Product B only ... Purchase answer to see full attachment