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Practice Quiz
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1
Which costs will change with an increase in activity within the relevant range?
A)Total fixed costs and total variable cost.
B)Per unit fixed costs and total variable cost.
C)Per unit variable cost and per unit fixed cost.
D)Per unit fixed cost and total fixed cost.
2
Expense #1 is a fixed cost; expense #2 is a variable cost. During the current year the activity level has increased, but is still within the relevant range. In terms of cost per unit of activity, we would expect that:
A)expense #1 will be unchanged.
B)expense #2 will decrease.
C)expense #1 will decrease.
D)expense #2 will increase.
3
An analysis of past janitorial costs indicates that janitorial cost is an average of $0.80 per machine-hour at an activity level of 40,000 machine-hours and $1.00 per machine-hour at an activity level of 32,000 machine-hours. Assuming that this activity is within the relevant range, what is the total expected janitorial cost if the activity level is 37,000 machine-hours?
A)$6,400
B)$27,840
C)$32,000
D)$36,000
4
Shipping expense is $10,000 for 1,000 pounds shipped and $13,750 for 1,500 pounds shipped. Assuming that this activity is within the relevant range, if the company ships 1,250 pounds, its expected shipping expense is closest to:
A)$10,000.
B)$11,458.
C)$11,875.
D)$12,500.
5
Given the cost formula Y = $30,000 + $5X, total cost at an activity level of 16,000 units would be:
A)$30,000.
B)$46,000.
C)$80,000.
D)$110,000.
6
Colloseu Company would like to classify the following costs according to cost behavior. The following data is available:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073048836/346046/chap5002.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>
Which of the following classifications best describes the behavior of Cost #2?
A)Mixed.
B)Variable.
C)Fixed.
D)none of the above.
7
Colloseu Company would like to classify the following costs according to cost behavior. The following data is available:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073048836/346046/chap5003.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>
Which of the following classifications best describes the behavior of Cost #3?
A)Mixed.
B)Variable.
C)Fixed.
D)none of the above.
8
The following information has been provided by the Douglas Grocery Store for the first quarter of the year:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073048836/346046/chap5005.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (14.0K)</a>
The gross margin of Douglas Grocery Store for the first quarter is:
A)$280,000.
B)$380,000.
C)$420,000.
D)$440,000.
9
The following information has been provided by the Batavia Office Supply Store for the first quarter of the year:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073048836/346046/chap5007.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (14.0K)</a>
The contribution margin of Batavia Office Supply Store for the first quarter is:
A)$560,000.
B)$760,000.
C)$840,000.
D)$1,200,000.
10
LaPorte Company has provided the following data for the second quarter of the most recent year:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073048836/346046/chap5009.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (16.0K)</a>
Assume that direct labor is a variable cost and that there were no beginning or ending inventories. The total contribution margin of LaPorte Company for the second quarter was:
A)$74,500.
B)$174,000.
C)$352,000.
D)$422,000.





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