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Multiple Choice Quiz
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1
 
20x7
20x8
Units
2,600
3,000
Total Cost
$17,550
$20,250

The results above represent what form of cost behavior?

A)Fixed Cost
B)Opportunity Cost
C)Mixed Cost
D)Variable Cost
2
Which of the following best describes the relationship between total fixed costs and total variable costs, as total volume decreases.
A)Total fixed costs stay the same and total variable costs stay the same.
B)Total fixed costs decreases and total variable costs stay the same.
C)Total fixed costs stay the same and total variable costs decrease.
D)Total fixed costs decrease and Total variable costs decrease.
3
Which of the following best describes the relationship between fixed costs per unit and variable costs per unit, as total volume increases?
A)Fixed costs per unit stay the same and variable costs per unit stay the same.
B)Fixed costs per unit stay the same and variable costs per unit increases.
C)Fixed costs per unit increases and variable costs per unit increases.
D)Fixed costs per unit decreases and variable costs per unit stay the same.
4
Which of the following represents the best definition of Contribution Margin?
A)Difference between fixed costs and variable costs.
B)Difference between revenue and fixed costs.
C)Amount available to cover fixed costs and profit.
D)Amount available to cover variable costs.
5

Co. A
Co. B
Co. C
Co. D
Volume (units)
2,000
2,000
2,000
2,000
Fixed Costs
$62,000
$57,000
$52,000
$50,000
Variable Costs
$10,000
$20,000
$30,000
$34,000
Total Costs
$72,000
$77,000
$82,000
$84,000

Assuming all companies charge the same sales price per unit, if Sales volume increases 20% which company would have the largest profit?

A)Co. A
B)Co. B
C)Co. C
D)Co. D
6

Co. A
Co. B
Co. C
Co. D
Volume (units)
2,000
2,000
2,000
2,000
Fixed Costs
$62,000
$57,000
$52,000
$50,000
Variable Costs
$10,000
$20,000
$30,000
$34,000
Total Costs
$72,000
$77,000
$82,000
$84,000

Assuming all companies charge the same sales price per unit, if Sales volume decreases 10% which company would have the largest profit?
A)Co. A
B)Co. B
C)Co. C
D)Co. D
7

Co. A
Co. B
Co. C
Co. D
Volume (units)
2,000
2,000
2,000
2,000
Fixed Costs
$62,000
$57,000
$52,000
$50,000
Variable Costs
$10,000
$20,000
$30,000
$34,000
Total Costs
$72,000
$77,000
$82,000
$84,000

If the sales price per unit is $100 and 2,000 units are sold which company exhibits the best Operating Leverage?
A)Co. A
B)Co. B
C)Co. C
D)Co. D
8

Co. A
Co. B
Co. C
Co. D
Volume (units)
2,000
2,000
2,000
2,000
Fixed Costs
$62,000
$57,000
$52,000
$50,000
Variable Costs
$10,000
$20,000
$30,000
$34,000
Total Costs
$72,000
$77,000
$82,000
$84,000

Which company has the competitive advantage if the price was dropped to $24, to attract all 8,000 units of volume in the market?
A)Co. A
B)Co. B
C)Co. C
D)Co. D
9

A local church wants to rent a hall for $3,000 a day to hold a Bingo fundraiser. Every session of bingo requires a caller for $200. There are supplies that are needed that cost $3 per person playing bingo. On average each bingo player spends $20 and 1,000 people attend each session. $10,000 in prizes are awarded each session.

Total costs for 1 session can be classified as:
Fixed Costs
Variable Costs
$13,200
$3
$ 3,000
$13,200
$13,200
$ 3,000
$10,000
$ 3.200

A)A
B)B
C)C
D)D
10

A local church wants to rent a hall for $3,000 a day to hold a Bingo fundraiser. Every session of bingo requires a caller for $200. There are supplies that are needed that cost $3 per person playing bingo. On average each bingo player spends $20 and 1,000 people attend each session. $10,000 in prizes are awarded each session.

The church conducts 1 Bingo session per month. Over the course of the year, which cost would not act as a variable cost based on just holding one more session?
A)Hall Rental
B)Cost of Supplies
C)Caller Salary
D)Prize Money
11

A local church wants to rent a hall for $3,000 a day to hold a Bingo fundraiser. Every session of bingo requires a caller for $200. There are supplies that are needed that cost $3 per person playing bingo. On average each bingo player spends $20 and 1,000 people attend each session. $10,000 in prizes are awarded each session.

If the church conducts 12 sessions and 1,000 people attend each session then the average cost per session is?
A)9,600
B)14,700
C)15,200
D)16,200
12

A local church wants to rent a hall for $3,000 a day to hold a Bingo fundraiser. Every session of bingo requires a caller for $200. There are supplies that are needed that cost $3 per person playing bingo. On average each bingo player spends $20 and 1,000 people attend each session. $10,000 in prizes are awarded each session.

The church is thinking of holding 2 Bingo sessions per day with 1,000 people attending each session. If they hold the 2 sessions then the average cost per session is?
A)9,600
B)14,700
C)15,200
D)16,200
13

20x7
20x8
Units
2,600
3,000
Total Cost
$22,500
$25,500

The results above represent what form of cost behavior?
A)Fixed cost
B)Variable cost
C)Mixed cost
D)Opportunity cost
14

20x7
20x8
Units
2,600
3,000
Total Cost
$22,500
$25,500

What is the estimated variable cost per unit?
A)8.65
B)8.57
C)8.50
D)7.50
15
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Which of the above costs behaves as a Variable Cost?
A)Rent
B)Salary
C)Cost of Goods sold
D)Depreciation
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Which of the above costs behaves as a Mixed Cost?
A)Rent
B)Salary
C)Cost of Goods sold
D)Depreciation
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Which doesn't contain any fixed cost behavior?
A)Rent
B)Salary
C)Cost of Goods sold
D)Depreciation
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If 300 units are sold what is the Contribution Margin?
A)$ 7,500
B)$10,500
C)$13,500
D)$18,000
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What is Total Fixed Cost?
A)$5,000
B)$6,000
C)$6,010
D)$9,000
20
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Between 20x5 and 20x6 the number of tickets sold increased by what "%"?
A)500
B)600
C)25
D)24
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Between 20x6 & 20x7 the price of Tickets increased by what percentage?
A)60,000 %
B)25 %
C)24 %
D)0 %
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The "Cost of Equipment" behaves as a:
A)Fixed cost
B)Variable cost
C)Mixed cost
D)Total cost
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Between 20x7 & 20x8 the Gross Profit increases by what percentage?
A)8.3 %
B)(8.3 %)
C)7.7 %
D)(7.7 %)
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Between which years is there the largest percentage increase in tickets sold?
A)20x5 & 20x6
B)20x6 & 20x7
C)20x7 & 20x8
D)20x6 & 20x8







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