Question 1

The HomeAmour Company operates their production and administrative activities from a single facility. Which of the following would be an example of a facility-level cost? a. Salary of the Chief Operating Officer.
B) Raw materials used to produce units.
C) Depreciation on the equipment used in the factory.
D) Freight paid on finished units shipped to customers.

Accepted Answer

The answer of The HomeAmour Company operates their production and...

Question 2

If a production facility increases its production by 1,500 units, its: a. Variable (unit-level) cost per unit will increase.
B) Fixed cost per unit will increase.
C) Total fixed costs will decrease.
D) Fixed cost per unit will decrease.

Accepted Answer

The answer of If a production facility increases its production...

Question 3

Which of the following items is not an example of a direct cost in the production of a refrigerator? a. Raw materials.
B) The cost of a machine used only for manufacturing this line of refrigerators.
C) Salary of factory assembly line workers.
D) Maintaining the sales office.
E) All of the above could be direct costs.

Accepted Answer

The answer of Which of the following items is not...

Question 4

Suppose fixed costs are $500, variable cost is $5 per unit, and step costs are $50 for every 20 unit produced. What is the total cost of producing 25 units? a. $675
B) $688
C) $725
D) $800
E) $625

Accepted Answer

The answer of Suppose fixed costs are $500, variable cost...

Question 5

During the month of September the Gaffney Company, which operates one factory location and one administrative location, reported the following costs:  Facility costs total:

Accepted Answer

The question does not specify which costs fall under the category of "facility costs," but since Gaffney Company only operates one factory and one administrative location, it is safe to assume that these costs are related to those two locations. Out of the given answer choices, B ($5,400) is the most reasonable estimate for the combined facility costs of Gaffney Company's two locations for a month.

Question 6

In June, Ace Manufacturing Plant produced 100 units of propane canisters for sale. The total variable costs were $5,000 and the fixed costs for the plant amounted to $3,000. How much is the unit variable cost for canisters if 120 canisters are produced? a. $50.00
B) $66.67
C) $80.00
D) $41.67

Accepted Answer

The answer of In June, Ace Manufacturing Plant produced 100...

Question 7

Considering only controllable costs and benefits in an analysis: a. Always reduces the number of costs and benefits needing to be measured.
B) Never reduces the number of costs and benefits needing to be measured.
C) Reduces only the number of costs to be measured if they are controllable.
D) Will not reduce the number of costs and benefits to be measured if the status quo is an available option.

Accepted Answer

The answer of Considering only controllable costs and benefits in...

Question 8

Organizations frequently refer to indirect costs as: a. Volume costs.
B) Variable costs.
C) Common costs.
D) Special costs.
E) Fixed costs.

Accepted Answer

The answer of Organizations frequently refer to indirect costs as:...

Question 9

A cost that is proportional to the volume of activity is a: a. Mixed cost.
B) Fixed cost.
C) Variable cost.
D) Volume cost.
E) Break-even cost.

Accepted Answer

The answer of A cost that is proportional to the...

Question 10

Which of the following statements describes how step costs relate to fixed and variable costs? a. A step cost behaves more like a variable cost as the step size decreases.
B) A step cost behaves more like a fixed cost as the step size decreases.
C) A step cost behaves like a variable cost, but not like a fixed cost.
D) A step cost behaves like a fixed cost, but not like a variable cost.

Accepted Answer

The answer of Which of the following statements describes how...

Question 11

Production planning required to prepare the production process for the next product is an example of: a. Product-level cost.
B) Facility-level cost.
C) Unit-level cost.
D) Batch-level cost.
E) None of the above.

Accepted Answer

The answer of Production planning required to prepare the production...

Question 12

Variable (unit-level) costs per unit: a. Increase as production increases.
B) Decrease as production decreases.
C) Stay the same at any level of production.
D) Increase as production decreases.

Accepted Answer

The answer of Variable (unit-level) costs per unit: a. Increase...

Question 13

Which of the following is the best example of product-level costs? a. Property taxes of a factory.
B) Cost of plastic for bottled water.
C) Research and development costs.
D) Setup of machine drivers

Accepted Answer

The answer of Which of the following is the best...

Question 14

A direct cost can be: a. Only fixed.
B) Only variable (unit-level).
C) Either fixed or variable (unit-level).
D) Neither fixed nor variable (unit-level).

Accepted Answer

The answer of A direct cost can be: a. Only...

Question 15

Advertising and research and development costs are examples of: a. Product-level cost.
B) Facility-level cost.
C) Unit-level cost.
D) Batch-level cost.
E) None of the above.

Accepted Answer

The answer of Advertising and research and development costs are...

Question 16

During the month of March the Richards Company, which operates one factory location and one administrative location, reported the following costs:  Indirect costs total:

Accepted Answer

The only relevant information given is the total of indirect costs, which is $2,200. Therefore, the answer is C.

Question 17

Which of the following will least likely be a variable cost for Pizza Hut? a. Dough, sauce, and cheese.
B) Boxes for 'to go' pizza orders.
C) Cooking ovens.
D) Cashiers' hourly wages

Accepted Answer

The answer of Which of the following will least likely...

Question 18

Factory rent is an example of: a. Product-level cost.
B) Facility-level cost.
C) Unit-level cost.
D) Batch-level cost.
E) None of the above.

Accepted Answer

The answer of Factory rent is an example of: a....

Question 19

Which of the following is the best example of a variable cost? a. Monthly loan payment on a plant generator.
B) Labor cost for plant employees.
C) Lease payment for the office copy machine.
D) General manager's salary.

Accepted Answer

The answer of Which of the following is the best...

Question 20

During May, Mayer Company's total fixed costs were $5,000 and variable costs were $7,000 when 500 units were produced. How much is total cost for June if 600 units are produced? a. $13,400
B) $12,000
C) $7,000
D) $14,400

Accepted Answer

The answer of During May, Mayer Company's total fixed costs...

Quiz 2: Identification and Estimating Costs and Benefits

If a production facility increases its production by 1,500 units, its: a. Variable (unit-level) cost per unit will increase. B) Fixed cost per unit will increase. C) Total fixed costs will decrease. D) Fixed cost per unit will decrease.

Suppose fixed costs are $500, variable cost is $5 per unit, and step costs are $50 for every 20 unit produced. What is the total cost of producing 25 units? a. $675 B) $688 C) $725 D) $800 E) $625

During the month of September the Gaffney Company, which operates one factory location and one administrative location, reported the following costs: Facility costs total:

In June, Ace Manufacturing Plant produced 100 units of propane canisters for sale. The total variable costs were $5,000 and the fixed costs for the plant amounted to $3,000. How much is the unit variable cost for canisters if 120 canisters are produced? a. $50.00 B) $66.67 C) $80.00 D) $41.67

Organizations frequently refer to indirect costs as: a. Volume costs. B) Variable costs. C) Common costs. D) Special costs. E) Fixed costs.

A cost that is proportional to the volume of activity is a: a. Mixed cost. B) Fixed cost. C) Variable cost. D) Volume cost. E) Break-even cost.

Production planning required to prepare the production process for the next product is an example of: a. Product-level cost. B) Facility-level cost. C) Unit-level cost. D) Batch-level cost. E) None of the above.

Variable (unit-level) costs per unit: a. Increase as production increases. B) Decrease as production decreases. C) Stay the same at any level of production. D) Increase as production decreases.

Which of the following is the best example of product-level costs? a. Property taxes of a factory. B) Cost of plastic for bottled water. C) Research and development costs. D) Setup of machine drivers

A direct cost can be: a. Only fixed. B) Only variable (unit-level). C) Either fixed or variable (unit-level). D) Neither fixed nor variable (unit-level).

Advertising and research and development costs are examples of: a. Product-level cost. B) Facility-level cost. C) Unit-level cost. D) Batch-level cost. E) None of the above.

During the month of March the Richards Company, which operates one factory location and one administrative location, reported the following costs: Indirect costs total:

Which of the following will least likely be a variable cost for Pizza Hut? a. Dough, sauce, and cheese. B) Boxes for 'to go' pizza orders. C) Cooking ovens. D) Cashiers' hourly wages

Factory rent is an example of: a. Product-level cost. B) Facility-level cost. C) Unit-level cost. D) Batch-level cost. E) None of the above.

Which of the following is the best example of a variable cost? a. Monthly loan payment on a plant generator. B) Labor cost for plant employees. C) Lease payment for the office copy machine. D) General manager's salary.

During May, Mayer Company's total fixed costs were $5,000 and variable costs were $7,000 when 500 units were produced. How much is total cost for June if 600 units are produced? a. $13,400 B) $12,000 C) $7,000 D) $14,400