Fixed Cost Questions and Answers

Classify the following cost as variable or fixed, with respect to the indicated measure of activity. | Cost | Measure of Activity | The cost of X-ray film used in the radiology lab at Virginia Maso...

Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expect...

Blue Denim Company makes blue jeans. The company controller wants to calculate the fixed and variable cost associate with electricity used in the factory. In March, the highest level of activity of...

A company estimates that its total cost to acquire materials, set up machines, and produce products is $150.00 per unit produced in 2016. In 2016, there we 100,000 units produced, and variable cost...

Fixed costs vary directly in total amount with changes in the volume of production activity or output. a. True b. False

A firm's fixed costs for producing zero units of output is equal to $15,000. Complete the table below to find the variable cost at all levels of output. | Quantity | Fixed Cost | Average Total Co...

Mixed costs exhibit some of the characteristics of both fixed costs and variable costs. a. True b. False

Mixed costs contain a variable portion of the cost that will be incurred even when the plant is idle and a fixed portion that will increase directly with production volume. a. True b. False

A firm's fixed costs for producing zero units of output is equal to $15,000. Use the table below and find the average fixed cost at all levels of output. | Quantity | Fixed Cost | Average Total C...

Last year, Jasper Company earned operating income of $14,640 with a contribution margin ratio of 0.15. Actual revenue was $244,000. Calculate the total fixed cost.

The phone bill for a corporation consists of both fixed and variable costs. January 460 minutes, $3,000. February 200 minutes, $2,675. March 160 minutes, $2,625. April 300 minutes, $2,800. If the c...

In the above table, if the fixed cost is $45, then the average total cost of producing 24 units of output is $______. (Round the answers to two decimal points.)

The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at 80% of its full capacity of 3,800 sets per qu...

What does the "relevant range" have to do with fixed costs?

Kamili Company sells two different products. Following are the average monthly revenues and costs over the past year: Product A: Sales Quantity 20,000 units, Price per unit $10, Contribution margin...

Explain the following cost briefly: Fixed cost.

Consider the table below. For each level of output, input the values for the Average Fixed Cost (AFC). | Cases of LED light bulbs produced in an hour | Total Cost | Variable Costs | 0 | $4,500 |...

Which of the following is a variable cost? A. Straight-line depreciation expense B. Direct materials cost C. Salary of plant manager D. Property tax

All of the following will be included in the cost of a fixed asset except _____. a. the cost of installing equipment b. mistakes in installation c. freight costs d. direct costs of new construction

Which of the following statements is true if total fixed costs decrease while the sales price per unit and variable cost per unit remain constant? A. The breakeven point decreases. B. The contrib...

Variable costs and fixed costs can best be described by which of the following when related to changing production levels? A. Fixed costs stay constant per unit, but variable costs vary per unit. B...

Why are the variances for fixed costs different from the variances for variable cost?

The following information is for X Company's two products, A and B, last year: Product A Product B Sales $92,860 $85,700 Total variable costs 55,716 46,278 Total fixed costs 29,670 72,730 Profit $7...

Total fixed costs ________ while unit fixed costs _________ with an increase in production volumes. A. decrease, decrease B. stay constant, stay constant C. stay constant, decrease D. increase, inc...

Which of the following is a cost that varies in total with changes in the activity level? a. Fixed Cost b. Variable Cost

Which of the following is a cost that varies per unit? a. Fixed Cost b. Variable Cost

Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $105 per unit Fixed manufacturing overhead costs $675,000 Sales pric...

A motor vehicle has annual depreciation of $2,500, oil changes cost $230, automobile insurance costs $550, and license plates cost $125. What is the annual amount of the total fixed operating cost...

A company has monthly fixed costs of $135,000. The variable costs are $5.00 per unit. If the sales price of a unit is $12.00 and we sell 7500 units, the company's average fixed costs per unit will...

Vortex produces laser pointers. Each pointer has a variable cost of $260, fixed costs of $56,000 {per month), and a sale price per unit of $500. If the company produces and sells 400 pointers in J...

At a sales volume of 38,500 units, Carne Company's sales commissions (a cost that is variable with respect to sales volume) total $646,800. What should be the total sales commissions at a sales vol...

Paolucci Corporation's relevant range of activity is 7,500 units to 15,500 units. When it produces and sells 11,500 units, its average costs per unit are as follows: Average Cost per Unit Direct ma...

Which of the following is the total mixed cost equation for a factory where machine operating costs include $300,000 of machine depreciation per year, plus $70 of utility costs for each day the mac...

Colasuonno Corporation has two divisions: the West Division and the East Division. The corporation's net operating income is $88,800. The West Division's divisional segment margin is $39,500 and th...

The alpha company makes 200 units of product A and 500 units of product B. Product A uses $5 of direct materials per unit and $30 of direct labor per unit. Product B uses $3 of direct materials per...

Fixed costs may be relevant in a decision. a. True b. False

Erkkila Inc. reports that at an activity level of 7,300 machine-hours in a month, its total variable inspection cost is $425,030 and its total fixed inspection cost is $192,204. What would be the...

At various activity levels, Jensen Company incurred the following cost. Identify the cost as either fixed or variable. | | Units Sold | | | | | Cost | 20 | 40 | 60 | 80 | 100 | Total salary cost...

Martinez Company's relevant range of production is 8,300 units to 13,300 units. When it produces and sells 10,800 units, its unit costs are as follows: Amount Per Unit Direct materials $ 5.80;...

At various activity levels, Jensen Company incurred the following cost. Identify the cost as either fixed or variable. | | Units Sold | | | | | Cost | 20 | 40 | 60 | 80 | 100 | Cost per unit of...

At various activity levels, Jensen Company incurred the following cost. Identify the cost as either fixed or variable. | | Units Sold | | | | | Cost | 20 | 40 | 60 | 80 | 100 | Total Rent Cost |...

What formula would be use to calculate the following: Last year's profit of $34,000 Total sales unit 4500 Sales price $125 Fixed costs $205,000 Calculate the income with a sales volume increase o...

McKnight Industries is in the process of analyzing its manufacturing overhead cost. The company is not sure if the number of units produced or a number of direct labor (DL) hours is the best cost d...

The highest value of total cost was $800,000 in June for Horchata Beverages, Inc. Its lowest value of total cost was $510,000 in December. The company makes a single product. The production volume...

A cellphone service provider charges $5.00 per month and $0.20 per minute per call. If a customer's current bill is $55, how many minutes did the customer use? (Round any intermediate calculations...

Why are mixed costs sometimes called semi-variables?

Consider the following cost from a manufacturing business: Bookkeeping expenses. Which of the following reflects or best describes the given cost? a. Direct labor b. Indirect costs c. Period costs...

The company manufactures CDs and DVDs both assembled as 10 discs per pack. Predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. Predicted costs for the year are: Variable costs Fixed...

Adria Lopez, owner of Success Systems, decides to diversify her business by also manufacturing computer workstation furniture. Classify the following manufacturing cost of her company by behavior a...

Listed below are the total costs associated with the 2015 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $464 each. Classify the following cost and its amount as eit...

Classify the following cost as variable, fixed, mixed, or step. Sales volume is the cost driver. | | Classification | Electric power in a factory |

Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. Classify the following cost incurred by Seymour in the production and sale of blue jea...

Why is it so important to distinguish between fixed and variable costs?

A mixed cost contains both selling and administrative cost elements. a. True. b. False.

Classify the following cost as either a variable cost or a fixed cost: Conference exhibitor fee of $3,000.

Classify the following cost as either a variable cost or a fixed cost: Travel expenses for conference (e.g. airfare, meals, taxi, etc.) amounting to $1,200.

Classify the following cost as either a variable cost or a fixed cost: Phone/internet expenses amounting to $150 per month.

Classify the following cost as either a variable cost or a fixed cost: Bank fees of $200.

Classify the following cost as either a variable cost or a fixed cost: Advertising fees amounting to $3,000.

Classify the following cost as either a variable cost or a fixed cost: Labor cost of $400 per month.

Classify the following cost as either a variable cost or a fixed cost: Utilities amounting to $100 per month.

Classify the following cost as either a variable cost or a fixed cost: Office supplies of $900.

Classify the following cost as either a variable cost or a fixed cost: Shipping expenses of $3 per unit.

A manufacturer has invested $120,000 in a new product and wants to set a price to earn an $80,000 profit. The variable cost per unit is $20 and the company sells the units at $100. How many units...

As fixed costs change, a revised break-even level calculation requires that the new total fixed cost be divided by the contribution margin. a. True. b. False.

The manufacturer of a T-shirt normally sells each piece for 98.00. Based on data from the Accounting Department, normal costs per piece are: Variable costs: Direct labor 24.00 Direct materials...

A small publishing company is planning to publish a new book. The production costs will include one-time fixed costs (such as editing) and variable costs (such as printing). The one-time fixed cost...

Valley City Kite Company manufactures & sells kites for $5 each. The variable cost per kite is $2 with the current annual sales volume of 75,000 kites. This volume is currently Valley City Kite's b...

Over the relevant range of output, fixed costs remain unchanged. a. True b. False

A __________________ cost does not change in total in proportion to changes in the volume of activity within the relevant range.

Determine whether the following is a variable cost or a fixed cost: Depreciation.

Determine whether the following is a variable cost or a fixed cost: Taxes and Licenses.

Determine whether the following is a variable cost or a fixed cost: Office supplies.

Determine whether the following is a variable cost or a fixed cost: Utilities.

Determine whether the following is a variable cost or a fixed cost: Professional Fees.

Determine whether the following is a variable cost or a fixed cost: Accounting Fees.

Determine whether the following is a variable cost or a fixed cost: Dues and Subscriptions.

A company has $7.00 per unit in variable costs and $3.20 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.51, what price should be charged if 60,000 unit...

Determine whether the following is a variable cost or a fixed cost: Interest Expenses.

Determine whether the following is a variable cost or a fixed cost: Advertisement.

Determine whether the following is a variable cost or a fixed cost: Payroll expenses.

Determine whether the following is a variable cost or a fixed cost: Rent Expense.

Determine whether the following is a variable cost or a fixed cost: Amortization.

Sandford Company manufactures one product. Its variable manufacturing cost is $16 per unit and the total fixed manufacturing cost is $600,000. Calculate Sandford's total manufacturing costs if it p...

Ocean City Kite Company manufactures & sells kites for $6 each. The variable cost per kite is $2.50 with the current annual sales volume of 80,000 kites. This volume is currently Ocean City Kite's...

The accounting break-even production quantity for a project is 5,799 units. The fixed costs are $92,640, the depreciation is $36,210, and the sales price per unit is $48.29. What is the variable co...

Wages paid to seamstresses, utilities for factories, and wages to cutters; are they fixed costs?

A firm has a total revenue of $15 million, fixed costs of $6 million, and variable costs of $8 million. What should the firm do in the long run?

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Sales commissions paid to sales associates in a department store.

Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. Classify the following cost incurred by Seymour in the production and sale of blue jea...

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Material handling costs for Frito Lay Company, a food manufacturer.

Jack has provided you with the following cost information: | Item (Labor) | Cost | Marketing | $100/month, $1/pizza Classify the given cost by behavior (fixed or variable), traceability (direct...

Jack has provided you with the following cost information: | Item (Labor) | Cost | Salary - Chef | $2,000/month Classify the given cost by behavior (fixed or variable), traceability (direct or...

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Electricity cost to heat and light a law firm.

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Wages paid to production workers in a General Motors plant.

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Shipping cost for Amazon.

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Fuel costs for Southwest Airlines.

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Insurance on a Hershey factory.

Consider the following cost and classify it as either variable or fixed, with respect to the volume or level of activity: Salary of a supervisor in a Best Buy distribution center.

Jim is considering quitting his job and using his savings to start a small business. He expects that his costs will consist of a lease on the building, inventory, wages for two workers, electricity...

Consider the following information. How much is the total cost when output is zero? | Output | Fixed cost | Variable cost | 1 | 100 | 100 | 2 | 100 | 180 | 3 | 100 | 240 | 4 | 100 | 320

What do we call fixed costs that are the result of previous management decisions that current managers have no control over in the short run?

Classify the following cost as variable or fixed, with respect to the indicated measure of activity. | Cost | Measure of activity | Property insurance on a Coca-Cola bottling plant | Number of ca...

Classify the following cost as variable or fixed, with respect to the indicated measure of activity. | Cost | Measure of activity | The cost of sales commissions paid to salespersons at a Nordstr...

Complete the following table by filling in the values under the average fixed cost column. | Output | Fixed cost | Variable cost | Average fixed cost | 1 | 1,000 | 500 | | 2 | 1,000 | 800 | | 3...

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement and segmented by division: Total Company Southern Northern Sales $...

Vargis Corporation has a machining capacity of 200,000 hours per year. Utilization of capacity is normally 75%; it has been as low as 40% and as high as 90%. An analysis of the accounting records r...

A medical office does MRI (magnetic resonance imaging) scans on patients. It has two MRI machines. Each scan requires a technician to run the MRI machine. Below is the production function for the o...

Which statement is false? a) There are no fixed costs in the long run. b) Fixed costs are zero if the firm is producing nothing. c) Fixed costs do not depend on the firm's level of output. d) F...

Ken Washburn and Associates incurred a total cost of $10,000 to produce 500 custom mirrors. A total of 550 hours were required for the production of the mirrors. Direct labor is variable and costs...

If the variable cost amounts to $130,000 when sales are $250,000, what will the variable cost be when sales are $350,000?

What are several pros and cons of using only one fixed budget for the year?

Which of the following statement is not true? A) The cost of inputs that are impossible to adjust in the short run can be a source of fixed costs. B) Total fixed costs equal total costs minus the t...

A decreasing-cost industry is one in which: A) contraction of the industry will decrease unit costs. B) input prices fall or technology improves as the industry expands. C) the long-run supply c...

A constant-cost industry is one in which: A) resource prices fall as output is increased. B) resource prices rise as output is increased. C) resource prices remain unchanged as output is increas...

Expense A is a fixed cost, while expense B 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 activi...

Determine the fixed- and variable-cost components using the high-low method. Month Total Maintenance Costs Total Machine Hours January $2,500 300 February 3,000 350 March 3,600 500 April 4,500 690...

Wall Company incurred $30,000 of fixed costs and $40,000 of variable costs when 2,000 units of product were made and sold. If the company's volume increases to 2,500 units, what would be the compan...

A strawberry farmer has 5,000 pounds of strawberries ready to harvest. The cost of picking and transporting the strawberries to the market is $3,500. If the market pays $0.60 per pound of strawberr...

Supply costs at Coulthard Corporation's chain of gyms are listed below: Client-Visits Supply Cost March 11,666 $28,349 April 11,462 $28,296 May 11,994 $28,434 June 13,900 $28,930 July 11,726 $28,36...

Supply costs at Coulthard Corporation's chain of gyms are listed below. Client-Visits Supply Cost March 11,657 $28,402 April 11,453 $28,324 May 11,985 $28,526 June 13,000 $28,912 July 11,717 $28,42...

Supply costs at Coulthard Corporation's chain of gyms are listed below. Client-Visits Supply Cost March 11,664 $28,356 April 11,460 $$28,299 May 11,992 $28,448 June 13,700 $28,926 July 11,724 $28,3...

Supply costs at Coulthard Corporation's chain of gyms are listed below. Client Visits Supply Cost March 11,656 $28,412 April 11,452 $28,331 May 11,984 $28,544 June 12,900 $28,910 July 11,716 $28,43...

Supply costs at Coulthard Corporation's chain of gyms are listed below: Client Visits Supply Cost March 11,663 $28,362 April 11,459 $28,303 May 11,991 $28,457 June 13,600 $28,924 July 11,723 $28,38...

The linear equation Y = a + bX is often used to express cost formulas. In this equation: a. the Y term represents a total fixed cost. b. the a term represents the variable cost in total. c. the X t...

Munoz Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 3,000 and 9,000 trophies per year. The following cost data apply...

Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 10,000 T-shirts at $18 each in the coming year. Product costs include: Direct materials per T-shirt $...

Determine whether the following is true or false: As activity decreases within the relevant range, fixed costs remain constant on a per unit basis.

A project currently generates sales of $10 million, variable costs equal to 40% of sales, and fixed costs of $2.3 million. The firm's tax rate is 20%. The project will last for 10 years. The discou...

Thornton Corporation incurs the following annual fixed costs: Item Cost Depreciation $65,000 Officers' salaries 170,000 Long-term lease 60,000 Property taxes 12,000 Required: Determine the total fi...

The short-run average VARIABLE cost can never exceed the long-run average total cost. Which of the following statements is/are correct? a. All costs are explicit. b. Long-run average total cost rem...

When distinguishing between fixed costs and variable costs, which of the following statements is true? 1) As production rises, variable costs per unit will fall. 2) As production rises, total fixed...

Handy's Hats makes the world's best hats. Information for the last eight months follows: Month Number of Hats Produced Total Cost January 6,750 $11,300 February 5,540 $10,200 March 6,250 $10,900 Ap...

Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct mate...

EcoBrite Labs performs tests on water samples supplied by outside companies to ensure that their wastewater meets environmental standards. Customers deliver water samples to the lab and receive lab...

(blank) is a cost that does not change, no matter how much of a good is produced.

Total fixed costs are $250,000 when 50,000 units are produced. Compute the fixed costs when 60,000 units are produced, assuming no other changes: a. $250,000 total b. $200,000 total c. $6 per unit...

Sherri's Tan-O-Rama is a local tanning salon. The following information reflects the number of appointments and total costs for the first half of the year: Month Number of Appointments Total Cost J...

For the following product cost related to the production of lawn furnitures, indicate whether it is a variable or a fixed cost, and a direct or an indirect cost: Annual flat fee for office security.

Suppose your cell phone company offers a plan under which you can buy time in blocks of 100 minutes. Every 100-minute block costs $15. If you use 101 minutes you will pay $30. This is an example of...

Which of the following is a characteristic of a fixed cost? a. The total cost remains constant, regardless of changes in the level of activity. b. The cost per unit varies proportionately with chan...

If the activity level increases, what happens to the unit fixed cost? a. It decreases. b. It increases. c. It remains the same. d. It depends on how much the activity level increases.

Intuit Inc. develops and sells software products for the personal finance market, including popular titles such as Quickbooks and TurboTax. Classify each of the following costs and expenses for thi...

Converse, an apparel company, has been fairly successful selling denim-colored college sportswear. Lydia sees an opportunity for profit and enters the market. In the short run, Lydia should: a. sh...

Is airline price discrimination just unfair or are there benefits to both business and leisure passengers?

Complete the following table. | Units (Q) | FC ($) | VC ($) | AFC ($) | 0 | 300.00 | 30.00 | - | 1 | 300.00 | 45.00 | | 2 | 300.00 | 52.50 | | 3 | 300.00 | 75.00 | | 4 | 300.00 | 120.00 |

Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows: Sales $2,880,000 Cost of goods sold 1,4...

As the production rate is increased, average fixed costs: A. Are constant B. First fall, then rise (in a U-shaped curve) C. Decline D. Increase

10. Sally, Inc. has consistent fixed costs and contribution margin ratios from month to month. In January, Sally produced a $180,800 profit from $300,000 in revenue. In February, Sally produced a $...

In the case of a manufacturing organization, which of the following is a variable cost that varies directly with the sales volume? A) shipping cost B) interest cost C) dividend cost D) rental c...

Does litigation claim fall under non-current liabilities in the balance sheet? Explain.

As the volume of production increases, the fixed cost per unit of the product decreases. a. True b. False

Consider the following cost item: Hamburger buns in a Wendy's restaurant. Determine whether the cost is fixed or variable with respect to the number of units produced and sold. Also, determine whet...

A cell phone company offers two different plans. Plan A costs $88 per month for unlimited talk and text. Plan B costs $0.20 per minute plus $0.10 per text message sent. You need to purchase a plan...

Wall Company incurred $30,000 of fixed costs and $40,000 of variable costs when 1,000 units of product were made and sold. If the company's volume increases to 1,500 units, the company's total cost...

Hico Bottling Company pays its production manager a salary of $5,000 per month. Salespersons are paid strictly on commission, at $2 for each case of product sold. For Hico Bottling Company, the pr...

When a mixed cost is graphed, the Y-intercept corresponds to the: a. step cost. b. price of the units sold. c. fixed cost. d. variable rate.

Discretionary fixed cost does not include ____. a. assembly wages b. public relations costs c. advertising costs d. leasing costs

The contribution margin is equal to price per unit minus total costs per unit. True or false?

On a per-unit basis, this cost increases with each level of activity. A. Fixed B. Variable C. Mixed D. None of these

In total, this cost remains constant despite changes in activity or sales volumes. A. Fixed B. Variable C. Mixed D. None of these

When 24,000 units are produced, fixed costs are $15 per unit. Therefore, when 20,000 units are produced, fixed costs will _____. A. total $300,000 B. decrease to $12.50 per unit C. remain at $15...

A certain product may be manufactured using two different methods as shown below. First method, fixed costs per period are 600,000 pounds and variable costs are 295 pounds per unit of the product....

Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The company's monthly fixed expense is $31,800. Calculate the unit sales needed...

Pacific Parts produces a single part for sale. The part sells for $37 per unit. Fixed costs are $890,000 annually. Production and sales of 230,000 units annually result in profit before taxes of $2...

Windham Corporation has provided the following cost data for last year when 350,000 units were produced and sold: Raw materials $350,000 Direct labor $100,000 Manufacturing overhead $300,000 Sellin...

Darby Company, operating at full capacity, sold 125,550 units at a price of $69 per unit during the current year. Its income statement for the current year is as follows: Sales - $8,662,950 Cost...

Ben Palman owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20% of the price of each piece as his fee. Space is limited, and there are costs involved, so Ben...

Risk is reduced when a high proportion of costs are fixed. True or false?

Indicate whether the cost is mainly fixed or variable with respect to the measure of activity listed below it. Cost Description: Shift manager's wages at a coffee shop Measure of Activity: Dollar...

Indicate whether the cost is mainly fixed or variable with respect to the measure of activity listed below it. Cost Description: Cook's wages at a coffee shop Measure of Activity: Dollar sales

Baird Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $75,000 per concert. a. What are the total band cost and the cost per person if concer...

Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: If 6,000 units are produced, wh...

The fixed costs per unit are $10 when a company makes 10,000 units. What are the per unit fixed costs when 12,500 units are produced? A) $6.00 B) $12.00 C) $10.00 D) $8.00

SIC stands for Special Item Code. True or false?

In March, Josephine used 2,500 units of electricity at 0.09 pounds per unit, plus a further 1,400 units at 0.05 pounds per unit. In addition, she paid a standing charge. The total of the electrici...

The cost for a long-distance telephone call is $0.36 for the first minute and $0.21 for each additional minute or portion thereof. Write an inequality representing the number of minutes a person co...

Identify whether the following is best described as a fixed, variable, or mixed cost with respect to product units: Rubber used to manufacture athletic shoes.

Sam's Sushi serves only a fixed-price lunch. The price of $8 and the variable cost of $4 per meal remain constant regardless of volume. Sam can increase lunch volume by opening and staffing additio...

The fixed cost per unit is considered constant despite the changes in volume of activity within the relevant range. a. True. b. False.

Dilly LLC, wants to make a profit of $30,000. It has variable costs of $67 per unit and fixed costs of $20,000. How much must it charge per unit if 5,000 units are sold? a. $37 b. $67 c. $52 d....

Distinguish between direct costs, indirect costs, and factory overhead. Explain each and how they differ.

Martinez Company's relevant range of production is 7,500 units to 12,500 units. If 11,000 units are produced, what is the total amounts of direct and indirect manufacturing costs incurred to suppor...

Martinez Company's relevant range of production is 7,500 units to 12,500 units. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of p...

Martinez Company's relevant range of production is 7,500 units to 12,500 units. If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced? The average costs per u...

Martinez Company's relevant range of production is 7,500 units to 12,500 units. For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units? The averag...

Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: [TABLE] With respect to cost classifications for predi...

Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct mate...

Consider the information given in the table below. If 22,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? | | Amount...

An economist estimated that the cost function of single-product firm is C(Q) = 100 + 20Q + 15Q^2 + 10Q^3, where Q is the quantity of output. Calculate the average fixed cost of producing 10 units o...

Suppose Reeder, Corp. has three divisions, all using the warehouse: Pipes, Seals, and Flanges. The total warehousing cost is $40,000. The total warehouse space is 100,000 square feet, of which Pipe...

Variable manufacturing costs are $126 per unit, and fixed manufacturing costs are $157,500. Sales are estimated to be 10,000 units. A. How much would absorption costing income from operations diffe...

An economist estimated that the cost function of a single-product firm is C(Q) = 100 + 20Q + 15Q^2 + 10Q^3, where Q is the quantity. Calculate the fixed cost of producing 10 units of output.

What is the cost that does not vary with the level of an activity?

Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting an operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,0...

Which of the following is not an example of a cost that varies in total as the number of units produced changes? a. Electricity per KWH to operate factory equipment. b. Straight-line depreciation...

Given in the table below is the available information for Snap Company. Fixed overhead costs are $40,000 annually and fixed selling and administrative costs are $32,000 annually. Selling price is $...

A cost that is part selling cost and part manufacturing cost is referred to as a mixed cost. a. True b. False

In 2013, Fairview Corporation sold 100,000 units of its product for $20 each. The variable cost per unit was $14, and Fairview's margin of safety was 40,000 units. What was the amount of Fairview's...

Booble, Inc. has a contribution margin ratio of 47%. This month, sales revenue was $211,000, and profit was $46,300. How much are Booble's fixed costs? a) $21,761 b) $49,585 c) $52,870 d) $99,170

When a department or product line is dropped, the common fixed costs which had been allocated to that department: A. are eliminated. B. become variable costs. C. are allocated to the remaining d...

Given the following information, determine the variable cost per dollar of sales revenue and the total fixed costs, using both the high and low data to confirm your calculations. The high total sal...

X Company has the following data from 2014 and 2015: \\ \\ Expected production in 2016 is 43,500 units. Using the high-low method with the 2014 and 2015 data to determine the parameters of the cos...

What are costs that rise or fall depending on how much is produced?

What is a cost that does not change, no matter how much of a good is produced?

Lorge Corporation has collected the following information after its first year of sales. Sales were $2,020,800 on 126,300 units; selling expenses $303,120 (40% variable and 60% fixed); direct mater...

Deciding to invest in capital is a short-run decision. True or False?

Fixed costs should be ignored when evaluating how well a manager has controlled costs. True or False.

The fixed cost for this firm is $_____. A. 80 B. 90 C. 50 D. 100 ||Quantity (units)||Total revenue ($)||Total cost ($) |0|0|50 |1|90|80 |2|180|120 |3|270|170 |4|360|230 |5|450|300 |6|540|380 |7|630...

What are the fixed costs of production for this firm? A.$34 B. $4 C. $30 D. $50 ||Barrel of oil produced||Marginal revenue||Marginal cost||Average costs |1|$50|$4|$34 |2|50|6|40 |3|50|11|17 |4|50|1...

Austin Boston corporation's balance sheet for last year is present below: Cash $400,000 Accounts payable $1,500,000 Accounts receivable 2,000,000 Notes payable 1,000,000 Inventory 3,000,000 Mortgag...

Pipit Corporation has two divisions: the East Division and the West Division. The corporation's net operating income is $75,000. The East Division's divisional segment margin is $100,000 and the We...

Lorge Corporation has collected the following information after its first year of sales. Sales were $2,100,000 on 105,000 units; selling expenses $250,000 (40% variable and 60% fixed); direct mater...

On August 1, 2015, Tanner Corporation purchased a new machine on a deferred payment basis. A down payment of $2,000 was made and 4 annual installments of $6,000 each are to be made beginning on Sep...

Macaulay Roller Skates has three product lines - D, E, and F. The following information is available: D E F Sales revenue 90,000 50,000 30,000 Variable costs (40,000) (15,000) (12,000) Contribution...

Total costs are $210,000 when 15,000 units are produced; of this amount, variable costs are $68,000. What are the total costs when 21,000 units are produced? a. $237,200. b. $266,800. c. $294,00...

The fixed costs per unit are $20 when a company produces 20,000 units of product. What are the fixed costs per unit when 15,000 units are produced? a. $26.67. b. $20.00. c. $15.00. d. $14.17....

Vin Diesel owns the Fredonia Barber Shop. He employs 6.00 barbers and pays each a base rate of $1,350 per month. One of the barbers serves as the manager and receives an extra $530 per month. In ad...

When output is 100 units, the firm s total fixed cost is $500. What will this firm s total fixed cost be if output doubles to 200 units? a. $125 b. $1,000 c. $500 d. $750 e. $250

Let the TC curve be given by the equation TC(Q) = 8Q. The FC curve can be expressed as: A. 8 B. 0 C. 8Q D. It cannot be determined with the information given

Mendoza Company's highest point of total cost was $80,000 in June. Their point of lowest cast was $65,000 in January. The company makes a single product. Production volume in June and January were...

Which of the following are examples of a company's fixed costs: a) wages for hourly workers b) monthly rent for factory or retail space c) raw materials for production

Which of the following is an example of a fixed cost for a manufacturer? A. Income taxes B. Machine repair expense C. Fire insurance on buildings D. Delivery fuel expense

Why might it be misleading to show the fixed costs on a per unit basis?

Total warehouse rent is determined by an annual lease contract of $300,000. Currently, the company stores an average of 10,000 units of product in the warehouse. If the company's volume increases t...

What are the implications/consequences of fixed costs rising for a business?

State a cost of production that is independent of the level of production.

ABC sold a volume of 38,000 units in January (a volume within the relevant range). The cost of insurance on ABC's plant (a cost that is fixed with respect to sales volume) for January was $654,000....

Analysis of the operations of Padillo company shows the fixed costs to be $200,000 and the variable costs to be $8 per unit. The selling price is $16 per unit. a. Derive the break-even point expre...

Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating c...

GOT Manufacturing purchases a key component of one of its products from a local supplier. The current purchase price is $1,513 per unit. Annual component usage should increase from 150 to 750 units...

Suppose you and a friend start a babysitting service on campus. What are your fixed and variable costs?

Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $120,000 Direct Labor 25,000 Variable Overhead 45,000 Fixed Overhead 30,000 I...

GOT Manufacturing purchases a key component of one of its products from a local supplier. The current purchase price is $1,546 per unit. Annual component usage should increase from 150 to 750 units...

AudioCables, Inc., is currently manufacturing an adapter that has a variable cost of $0.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. The current sales volume is 30,00...

Classify each item as direct (D) or indirect (I) and as variable (V) or fixed (F). 1. Factory rent 2. Salary of a factory storeroom clerk 3. Cement for a road builder 4. Supervisor training program...

In a make-or-buy decision, relevant costs include: (a) Unavoidable fixed costs, (b) Fixed factory overhead costs applied to products, (c) Fixed selling and administrative expenses, (d) Avoidable fi...

Straight line depreciation, rent, and manager salaries are examples of variable costs. a. True b. False

Martinez Company's relevant range of production is 7900 units to 12900 units. When it produces and sells 10400 units, its unit costs are given in the table. (A) For financial accounting purposes, w...

Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate's machinery costs $100 per day and is the only fixed input. Her variable cost is comprised of t...

Which of the following is considered a mixed cost for a bakery that makes banana nut bread? A) Bananas B) Building rent of $2,500 per month plus $8.00 per square foot used C) Flour D) Cleaning...

Use the high/low method to determine the fixed costs for a product, which has high and low mixed product costs as follows: 50,000 units produced at a cost of $36,000 and 80,000 units produced at a...

If fixed costs are $741,206 and variable costs are 70% of sales, what is the break-even point (dollars)? A. $518,844 B. $2,470,687 C. $3,211,893 D. $1,260,050

Is a fixed cost an incremental cost? Give an example in which a fixed cost is an incremental cost.

Bloom Company management predicts that it will incur fixed costs of $266,000 and earn a pretax income of $360,400 in the next period. Its expected contribution margin ratio is 54%. A. Compute the a...

Which of the following is not an example of a variable cost? A. Straight-line depreciation on a machine expected to last 8 years B. Piece-rate wages paid to manufacturing workers C. Buttons on wint...

Cost-Volume Profit Analysis Hailstorm Company sells a single product for $22 per unit. Variable costs are $14 per unit and fixed costs are $65,000 at an operating level of 7,000 to 12,000 units. a...

As more units of a product are sold, the total fixed cost typically ____. a) goes up b) goes down c) remains constant d) becomes a variable cost

Bay Corporation is manufacturing a part that is used in its finished product. The costs for each unit of the part follow: Direct materials $17 Direct labor $18 Manufacturing overhead: Variable cost...

The following data pertains to activity and costs for two months: June July Activity level 10,000 units 20,000 units Variable cost $20,000 Fixed cost $15,000 Mixed cost $10,000 Total cost $45,000 $...

Sorrento Company's plant is operating at less than full capacity. The company just received a one-time opportunity to accept an order at a special price below its usual price. The special price exc...

In your city, there are currently three firms providing oil changes. For each firm, there is a fixed cost of $100 per day and a marginal cost of $12 per oil change. Each firm currently maximizes it...

Yesterday, a perfectly competitive producer of construction bricks manufactured and sold 10,000 bricks per week at a market price that was just equal to the minimum average variable cost of produci...

What relationship, if any, can you detect between the fact that farmers' fixed costs of production are large and the supply of most agricultural products is generally inelastic?

For 2013, Winchester Company sold 80,000 units at a selling price of $20 per unit. Variable cost per unit was $15, and Winchester's net income for the year was $40,000. What was the amount of Winch...

Sasha Ltd. manufactures and sells cell phones. The following are some of the costs the company incurs during the production process. Classify the costs Sasha incurs in its production process based...

Assume a fixed cost of $150,000, a variable cost of $70, and a selling price of $90. What is the break-even point? a. 1,600 b. 2,100 c. 7,500 d. 15,000 e. 9,300

Which of the following statements best describes variable costs? a. costs that vary in total in direct proportion to activity b. costs that remain the same in total c. costs that vary on a per un...

X Company uses the high-low method to predict maintenance costs each month, with maintenance hours as the activity measure. The following past monthly cost and activity information is available: Mo...

The following information has been extracted from the books of the ABC Company in respect of its two operating divisions: Batteries Tyre Totals Sales Revenue 1,664,200 96,200 1,760,400 Cost of good...

Janice Huffman has decided to start Baird Cleaning, a residential housecleaning service co. She is able to rent cleaning equipment at a cost of $780 per month. Labor costs are expected to be $70 pe...

During the month of April, Vane Co-produced and sold 10,000 units of a product. Manufacturing and selling costs incurred during April were as follows: Direct materials and direct labor $400,000 Var...

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? a. Direct labor. b. Salary of a factory supervisor. c. Units-of-produc...

Why would a business be more inclined to accept new business at a lower price if it had excess capacity rather than if it was operating at full capacity?

Fanning Corp. incurs the following annual fixed costs: Depreciation $80,000 Officers' salaries $190,000 Long-term lease $42,000 Property taxes $48,000 Determine the total fixed cost per unit of pro...

The company has a capacity to produce 100,000 units in a year. Usually the company produces and sells 80,000 units in any year. The selling price is $20.00; variable production cost is $8.00 per un...

Carboxylic acids (RCO_2H) react with alcohols (R'OH) in the presence of an acid catalyst. The reaction product of propanoic acid with methanol has the following spectroscopic properties. Propose a...

Miller Company's most recent contribution format income statement is shown below: Total Per unit Sales (35,000 units) $210,000 $6.00 Variable expenses 105,000 3.00 Contribution margin 105,000 $3.00...

A manufacturer considers two methods for producing a circuit board. The board can be hand-wired at a $0.98 per unit and annual fixed cost of $1,000. A printed circuit board can be produced using an...

Last month Peggy Company had a $27,180 profit on sales of $344,800. Fixed costs are $76,260 a month. What sales revenue is needed for Peggy to break even?

When a department or product is dropped the common fixed costs which had been allocated to that department: a. are eliminated. b. become variable costs. c. are allocated to the remaining departme...

The following information relates to a product produced by Faulkland Company: Direct materials $15 Direct labor $12 Variable overhead $11 Fixed overhead $13 Unit cost $51 Fixed selling costs are $1...

Total fixed cost is frequently referred to as: a. overhead b. depreciation c. opportunity cost d. marginal cost

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process...

Suppose that a firm's only variable input is labor. When 50 workers are used, the average product of labor is 50, and the marginal product of the 50th worker is 75. The average wage rate is $80, an...

Sunbelt Company produces 100,000 smoothie blenders per month, which is 80% of plant capacity. Variable manufacturing costs are $8 per unit. Fixed manufacturing costs are $400,000, or $4 per unit. T...

A fixed cost is a cost which: a. remains constant in total with changes in the level of activity. b. varies in total with changes in the level of activity. c. varies inversely in total with changes...

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in: a. both variable and fixed costs. b. fixed costs and a decrease in variable co...

You run a school in Florida. The fixed monthly cost is $5,009.00 for rent and utilities, $5,573.00 is spent on salaries, and $1,294.00 on insurance. Also, every student adds up to $95.00 per month...

A property tax is an example of a ______. A. mixed cost B. committed fixed cost C. discretionary cost D. variable cost

Lebo Company produces telephones. The following information is available for this product: Fixed cost per unit $16.20 Variable cost per unit $14.50 Desired ROI per unit $4.50 What is the markup per...

A firm's _____ consist of expenditures that must be made before production starts that typically, over the short run, _____ regardless of the level of production. a) fixed costs; do not change. b)...

It would cost the town of Irondale $50 million to build a gas-powered generator that could produce a maximum of 5 megawatts of electricity at 15 cents per hour. Another alternative would be for Iro...

Given the following cost data, what type of cost is shown? Cost per Unit Number of Units $6,000 1 $3,000 2 $2,000 3 $1,500 4 a. Mixed cost b. Variable cost c. Fixed cost d. Period cost

Rental of equipment at $5,000 per month plus $6 for each machine hour used over 9,000 hours is a type of mixed cost. True or false?

A cost that can be separated into fixed and variable components is called a: a. Mixed cost. b. Step-variable cost. c. Copositive cost. d. Curvilinear cost. e. Differential cost.

The manufacturing costs of Kellam Industries for the first three months of the year follow: Months Total Costs Units Produced January $2,400,000 10,000 units February $2,950,000 42,000 units March...

Variable costs are relevant in deciding whether or not to drop a product. True or false?

For many corporations such as utility companies, a major portion of the cost of production is fixed in the short run. Should these very large fixed costs be ignored when the executives are making o...

Fran Company is currently operating profitably. The company has a fixed cost structure. Based on this information, which of the following statements is true? a. If volume increases by 20%, profitab...

Explain the concept of Average Fixed Cost curve (AFC).

Which of the following is a common fixed cost from the viewpoint of the Service Department in a Toyota dealership? a) The cost of parts used in repairing automobiles. b) Depreciation on tools and e...

Which of the following costs is a mixed cost? a. Electricity costs of $3 per kilowatt-hour b. Straight-line depreciation on factory equipment c. Rental costs of $10,000 per month plus $.30 per mach...

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost. a. True b. False

Traceable fixed costs that the manager of a department cannot change are called: a. Controllable. b. Committed. c. Conditional. d. Common.

Martinez Company's relevant range of production is 8,300 units to 13,300 units. When it produces and sells 10,800 units, its unit costs are as follows: Amount Per Unit Direct materials $5.80 Direct...

Assets acquired or self-constructed should initially be measured at: a) Assets acquired or self-constructed should initially be measured at Future Value b) Assets acquired or self-constructed shoul...

Butler Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 4,000 units: Per unit Revenue $4 Variable costs $1.50 Contribution margin...

A fixed cost: A) Remains the same per unit as output increases and (or) decreases. B) Increases in total as output increases and (or) decreases. C) Remains constant in total no matter the level of...

A fixed cost: A. requires the future outlay of cash and is relevant for future decision-making. B. does not change with changes in the volume of activity within the relevant range. C. is directl...

Transportation modes with high variable costs include: A. Truck. B. Air. C. Water. D. Rail. E. B and D.

Identify and discuss the main variable costs in the airline industry (passenger, freight, etc.).

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $120,000. How many MP3 players must Cunningham sell to earn a net income of $280,000? a. 6,00...

Use the following information: Cost Volume $15,000 3,000 $18,000 4,000 $20,000 7,000 The fixed cost element for the firm is _____. a. $11,250 b. $10,250 c. $12,250 d. $11,350

The activity base selected determines whether a cost behaves as a variable cost or fixed cost. True or false?

A small producer of music boxes wants to move to a larger facility. Two alternative facilities have been found. Site 1 has a fixed cost of $500,000 per year, with a variable cost of $25 per unit. S...

The Donaldson Company reported income from operations of $89,000, a contribution margin of $159,987, and sales totaling $235,546. The company reported fixed costs of _____. A) $75,559 B) $395,53...

Explain the difference between fixed and variable costs and give two examples of each for a car manufacturer.

Erkkila Inc. reports that at an activity level of 6,600 machine hours in a month, its total variable inspection cost is $426,230 and its total fixed inspection cost is $188,301. What would be the...

Variable expenses tend to vary with production. a. True b. False

Fixed costs per unit decrease as production levels decrease. \\ A. True B. False

Costs that change abruptly at different levels of activity because the resources and their costs come in indivisible chunks are called \\ A) variable costs B) step costs C) mixed costs D) fixed...

Which of the following is true about the changes in fixed costs? a. An increase in production will result in a decrease in per unit fixed costs. b. A decrease in fixed costs will result in an incr...

Haskins Products sells 2,500 kayaks per year at a sales price of $450 per unit. Haskins sells in a highly competitive market and uses target pricing. The company has calculated its target full prod...

Nantua Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division: Total Company Southern Northern Sales $4,70...

Based on a predicted level of production and sales of 15,000 units, a company anticipates reporting an operating income of $22,000 after deducting variable costs of $90,000 and fixed costs of $8,00...

Use the partial information regarding FSC Co. below, Units Sold Sales Variable Expense Contribution Margin p/unit Fixed Expense Net Income FSC Co. 10,000 $500,000 $20 $50,000 What are FSC Co.'s To...

A cost that remains constant per unit at various levels of activity is a: a. mixed cost. b. manufacturing cost. c. variable cost. d. fixed cost.

Fork Plastics has examined its utility expense for May and June. In May, the company used 2,200 machine hours and spent $18,600 on utilities. During June the company used 2,650 machine hours and sp...

Which of the following is not a fixed cost? (i) Property taxes. (ii) Straight-line depreciation. (iii) Salary of plant manager. (iv) Direct material cost.

Which one of the following is a name for the range over which a company expects to operate? a. Fixed range b. Variable range c. Mixed range d. Relevant range

Moctezuma Furniture Corporation incurred the following cost: Telephone bill. Identify the cost as variable, fixed or mixed.

Moctezuma Furniture Corporation incurred the following cost: Salaries of factory supervisors. Identify the cost as variable, fixed or mixed.

Moctezuma Furniture Corporation incurred the following cost: Insurance on buildings. Identify the cost as variable, fixed or mixed.

Moctezuma Furniture Corporation incurred the following cost: Property taxes. Identify the cost as variable, fixed or mixed.

Moctezuma Furniture Corporation incurred the following cost: Sales staff salaries. Identify the cost as variable, fixed or mixed.

Moctezuma Furniture Corporation incurred the following cost: Screws used in the production of furniture. Identify the cost as variable, fixed or mixed.

Define the following term: Fixed and variable costs.

Costs that remain constant in total dollar amount as the level of activity changes are called a. Mixed Cost b. Fixed Cost c. Variable Cost d. Opportunity Cost

Which of the following would be classified as a variable cost? a. Straight-line depreciation on production equipment. b. Copy lease payment of $500 per month plus $0.01 per copy. c. Fabric for u...

Jenny's Cutting Station is a new concept in haircuts; low cost and very quick. Set in a local mall, Jenny's offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointme...

Which of the following costs would be incurred even if no units are produced? a. material costs b. direct labor costs c. transportation costs d. building rental costs e. purchasing costs

An example of a committed fixed cost is insurance. a. True b. False

Which of the following is a variable cost? a. Raw materials. b. Rent. c. Insurance expense. d. Salaries.

The recession that started in 2008 produced a surprise for some manufacturers. The number of jobs lost was actually lower than in previous recessions. Between 2000 and 2008 many factories adopted l...

State true or false and justify your answer: Fixed cost is constant at every level of output except zero. When a firm produces no output, fixed costs are zero in the short run.

A firm expects to sell 25,700 units of its product at $11 per unit. Pretax income is predicted to be $60,700. If the variable costs per unit are $5, total fixed costs must be _____. a. $128,500 b...

The management of a company manufacturing surfboards has fixed costs (zero output) of $200 per day and total costs of $3,800 per day at a daily output of 20 boards. a. Assuming the total costs per...

Production material costs are generally fixed costs. True False

Which of the following is the right formula for calculating total mixed cost? A. Total mixed cost = (variable cost per unit x number of units) + total fixed cost B. Total mixed cost = (variable c...

Which of the following statements is true of the behavior of total fixed costs within the relevant range? A. They will decrease as production decreases. B. They will increase as production decrea...

Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The corporation's net operating income is $10,900. The BAJ Division's divisional segment margin is $77,100 and the CBB...

Answer true or false: Fixed costs that are allocated among all departments are known as common fixed costs.

Answer true or false: Written down depreciation of manufacturing equipment is an example of fixed cost.

At a break-even point of 600 units sold, the variable costs were $600 and the fixed costs were $300. What will the sale of each additional unit contribute to profit before income taxes? A. $1.00 B....

Stites Corporation will make $100,000 if it sells 8,000 bathtubs for $200 per unit. If the contribution margin is 30%, what will the fixed costs be? A. $1,020,000 B. $580,000 C. $380,000 D. $480,000

Erkila Inc. reports that at an activity level of 6,700 machine-hours in a month, its total variable inspection cost is $426,380 and its total fixed inspection cost is $192,780. What would be the av...

The cost of direct material is an example of a fixed cost. True or False?

Answer true or false: Mixed costs are costs that have characteristics of both variable and fixed costs.

Answer true or false: Fixed costs are costs that remain the same in total dollar amount as the activity base changes.

The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 500 + 2Q. What is the fixed cost? A. 500 B. 2Q C. 2 D. 2 + (500/Q) E. None of the above

How do fixed costs in a business create a problem for job costing?

Which of the following statements best gives the reason why a data usage bill for a smartphone is an essential (variable) expense? a. It is an obligation to pay, but the spender has some control ov...

Which of the following would you list as an "Essential (Fixed)" expense? a. electricity bill b. telephone usage bill c. rent d. none of the above

Eastern Polymers, Inc., processes a base chemical into plastic. Standard costs and actual costs incurred for the manufacture of 5,200 units of product are given below. Determine the fixed factory o...

When using a flexible budget, what will occur to fixed costs as the activity level increases within the relevant range? A. Fixed costs per unit will decrease. B. Fixed costs per unit will remain un...

State true or false and justify your answer: In a flexible budget, when the activity declines, the total variable cost also declines.

True or false? The primary difference between wages and salaries is the kinds of benefits associated with them.

What are the implications for a business of high operating gearing?

The fixed costs of a business: a. are different each month b. include interest on business loans c. include the cost of production materials d. are based on the quantity of goods produced

Explain the difference between fixed costs (FC) and variable costs (VC) as it relates to production.

Which of the phrases below most closely describes the following term: Fixed costs? a. Costs that increase or decrease in total in response to increases or decreases in the level of business activi...

Last month, a florist sold 910 bunches of flowers, making a profit of $2,005. Fixed costs are $3,000 per month, and the selling price of a bunch of flowers is $7.50. Calculate the variable cost of...

Jackson Company is trying to determine the optimal price to charge for its PUNCH model. Jackson has fixed costs of $50,000 and the PUNCH has variable costs of $12.00 per unit. Jackson has determine...

Core Manufacturing makes a single product. Budget information regarding the current period is given below: Revenue (100,000 units at $8.00) $800,000 Direct materials $170,000 Direct labor 125,000 V...

Quinnett Corporation has two divisions: the Export Products Division and the Business Products Division. The Export Products Division's divisional segment margin is $44,300 and the Business Product...

Fixed costs are constant on both the total cost and per-unit cost basis. (a) True (b) False.

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 18,000 cases of sauce each year but is currently only manufacturing an...

Committed fixed costs are those that relate to the investment in facilities, equipment, and the basic organizational structure of a company. (a) True (b) False.

Fantabulous Products sells 2,000 kayaks per year at a price of $450 per unit. Fantabulous sells in a highly competitive market and uses target pricing. The company has $1,000,000 of assets and the...

The Wall-shire Company has three divisions-Northern, Western, and Southern. The divisions have the following revenues and expenses: Northern Western Southern Sales $450,000 $410,000 680,000 Variabl...

Fixed costs A. are costs that vary with output B. are costs that do not vary with output C. are the costs associated with the fixed inputs D. Both B and C above

True or false? Fixed costs can be changed, but it is extremely costly to do so in a short period of time.

The total fixed costs for a manufacturer of road maps are $25,000, and its unit variable cost is $3. The company sells 20,000 maps and just breaks even. What is the map's selling price? a. $3.75 b....

Which of the following correctly describes fixed and variable cost behavior as total volume increases? a. Unit fixed costs stay the same and unit variable costs increase. b. Total fixed costs sta...

Which of the following would be the least controllable fixed costs? (a) Property taxes (b) Rent (c) Research and development (d) Management training programs.

Why do fixed costs remain constant regardless of the level of output?

Mixed costs: a) Vary with production in direct proportion to volume b) Vary with production but not in direct proportion to volume c) Do not vary with production d) Include only different types of...

Cranberry Wood Products spends an average of $9.50 in labor and $12.40 in materials on every unit it sells. Sales commissions and shipping amount to another $3.10. All other costs are fixed and add...

Paul's Pizza produced and sold 2,000 pizzas last month and had fixed costs of $6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true?...

Which of the following situations will most likely violate cost-volume-profit assumptions about fixed costs? A) When production volume increases beyond the capacity of the plant, a second shift wi...

Higher-level performance reports should allocate both traceable and common fixed costs to lower departments. (a) True (b) False.

________ does not change as output is increased or decreased. (a) Marginal cost (b) Dependent cost (c) Fixed cost (d) Opportunity cost.

Why aren't fixed costs relevant for most short-term decisions?

Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial reporting and tax purposes. The following selected costs were incurred in December, the low point of activity...

Fixed operating expenses include all of the following except _______. (a) rent (b) utilities (c) raw materials (d) depreciation.

Suppose that you have two processes A and B for producing a widget. Process A has a fixed cost of $10,000 and per unit variable cost of $80.00. Process B has a fixed cost of $30,000 and the per uni...

Assume a fixed cost of $950, a variable cost of $4.75 per unit, and a selling price of $6.25 per unit. How many units must be sold to make a profit of $500?