Question 1

A company has fixed costs of $60,000 per month. If sales double from 6,000 to 12,000 units during the month, fixed costs in total will
A)double.
B)remain the same.
C)be cut in half.
D)be none of the above.

Accepted Answer

Fixed costs do not change with the level of sales, so they will remain the same at $60,000 per month regardless of whether sales double or not.

Question 2

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's total sales revenue will be
A)$154,000.
B)$210,000.
C)$84,000.
D)$70,000.

Accepted Answer

Total variable costs = $4.00 x 14,000 units = $56,000 
Total costs = Fixed costs + Variable costs = $84,000 + $56,000 = $140,000 
Total sales revenue = Sales price x Units sold = $15.00 x 14,000 units = $210,000

Therefore, the total sales revenue will be $210,000.

Question 3

Match between columns
                        Premises: Costs that can be traced to the cost object.
The combination of direct labor and manufacturing overhead costs.
The difference in cost between two alternative courses of action.
The cost of producing one more unit.
The total cost divided by the total volume.

Accepted Answer

The Answer of Sunk cost and Variable costs and Differential is...

Question 4

How are average cost and marginal cost computed?

Accepted Answer

The answer of How are average cost and marginal cost...

Question 5

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the company's total variable costs will be
A)$184,000.
B)$154,000.
C)$210,000.
D)$48,000.

Accepted Answer

D)Calculations: $4.00 × 12,000 = $48,000

Question 6

Match between columns
                        Premises: A cost that relates to the cost object, but cannot be traced to it.
A cost that has already been incurred.
Costs that change in total in direct proportion to changes in volume.
The combination of direct materials and direct labor.

Accepted Answer

The Answer of Marginal cost and Indirect cost and Prime is...

Question 7

Kramer Manufacturing produces blenders. Its total fixed costs are $30,000. Its variable costs are $55.00 per blender. As production of blenders increases (within the relevant range), fixed costs will
A)stay the same per unit.
B)decrease as production increases.
C)decrease per unit as production increases.
D)increase as production decreases.

Accepted Answer

Fixed costs per unit decrease as production increases because the total fixed costs are spread over more units, reducing the cost per unit.

Question 8

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's average fixed costs per unit will be
A)$6.00 per unit.
B)$10.00 per unit.
C)$4.00 per unit.
D)$11.00 per unit.

Accepted Answer

A)Calculations: 84,000 / 14,000 = $6.00

Question 9

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the total sales revenue will be
A)$70,000.
B)$84,000.
C)$154,000.
D)$180,000.

Accepted Answer

Total variable costs = (variable cost per unit) x (number of units)
Total variable costs = $4.00 x 12,000 = $48,000

Total costs = (total variable costs) + (total fixed costs)
Total costs = $48,000 + $84,000 = $132,000

Total sales revenue = (selling price per unit) x (number of units)
Total sales revenue = $15.00 x 12,000 = $180,000

Therefore, the total sales revenue will be $180,000.

Question 10

Differentiate between fixed and variable costs and give an example of each.

Accepted Answer

The answer of Differentiate between fixed and variable costs and...

Question 11

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the company's average fixed costs per unit will be
A)$4.00 per unit.
B)$7.00 per unit.
C)$10.00 per unit.
D)$11.00 per unit.

Accepted Answer

B)Calculations: 84,000 / 12,000 = $7.00

Question 12

Match between columns
                        Premises: Revenue
Salaries expense
Cost of goods sold
Customer service expense
Cost of goods manufactured

Accepted Answer

The Answer of service company and merchandising company and manufacturing is...

Question 13

Getting to school for your 8 a.m. class doesn't leave much time for breakfast, and you are quite hungry by the time class ends. It is a long walk to the cafeteria, the lines are long once you get there, and you find yourself having to decide between having breakfast and getting to your next class on time. Many of your friends have expressed the same problem. The administration has agreed to let you set up a table just outside the building where you will sell various snacks for $1 each. You have agreed to pay the administration $400 per month and salaries to your friends to run the business will be another $400 per month. It will cost you 60 cents each to buy the pre-packaged snacks. You believe you can sell 2,500 snack packs per month.
a. What are the total fixed costs per month?
b. What are the total variable costs per month?
c. What is the fixed cost per snack pack?
d. What is the variable cost per snack pack?
e. What is the average cost per snack pack?
f. What is the average profit margin per snack pack?
g. Based on your analysis, should you start the snack pack business?

Accepted Answer

The answer of Getting to school for your 8 a.m....

Question 14

A company's total costs are calculated by
A)subtracting total fixed costs from total variable costs.
B)subtracting total variable costs from total fixed costs.
C)subtracting total fixed costs and total variable costs from sales.
D)adding total fixed costs to total variable costs.

Accepted Answer

Total costs include both fixed and variable costs, so they need to be added together to get the total cost of production.

Question 15

A company produces toy airplanes at a variable cost of $23 per toy. If 7,000 toys are produced at a total variable cost of $161,000, the total variable cost at 4,500 toys will be
A)$161,000.
B)$23.
C)$103,500.
D)$264,500.

Accepted Answer

To find the total variable cost at 4,500 toys, we can use the formula:
Total variable cost = variable cost per toy x number of toys
First, we need to find the variable cost per toy:
variable cost per toy = total variable cost / number of toys
variable cost per toy = $161,000 / 7,000 = $23
Now we can use the variable cost per toy to find the total variable cost at 4,500 toys:
Total variable cost = $23 x 4,500 = $103,500
Therefore, the total variable cost at 4,500 toys will be $103,500.

Question 16

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's total variable costs will be
A)$154,000.
B)$56,000.
C)$210,000.
D)$84,000.

Accepted Answer

The answer of London Plastics has monthly fixed costs of...

Question 17

Match between columns
                        Premises: delivery expense
toll free line for customer orders
depreciation expense on equipment in factory
customer support hot line
assembly line workers' wages

Accepted Answer

The Answer of production or purchases and distribution and research is...

Question 18

Match between columns
                        Premises: wages of assembly line personnel
utilities incurred in the office
indirect materials used
advertising expense
cost of primary material used to make product
rent expense on office facilities
sales supplies used
taxes paid on factory building
rent expense on factory building
insurance expired on factory equipment
factory supplies used
depreciation expense on office equipment

Accepted Answer

The Answer of direct labor and selling and general expenses is...

Question 19

Match between columns
                        Premises: cost of insurance on a new vehicle when evaluating purchase of new vehicle
cost of previous year's insurance policy on old equipment being evaluated for replacement
original cost of old equipment that is being evaluated for replacement
cost of new equipment that is under evaluation to replace used equipment
accumulated depreciation on old equipment being evaluated for replacement
cost of roof repair made on rental property last year when evaluating sale of rental property

Accepted Answer

The Answer of irrelevant and relevant is...

Quiz 2: Building Blocks of Managerial Accounting

A company has fixed costs of $60,000 per month. If sales double from 6,000 to 12,000 units during the month, fixed costs in total will

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's total sales revenue will be

On the line in front of each statement, enter the letter corresponding to the term that best fits that statement. You may use a letter more than once and some letters may not be used at all.

How are average cost and marginal cost computed?

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the company's total variable costs will be

On the line in front of each statement, enter the letter corresponding to the term that best fits that statement. You may use a letter more than once and some letters may not be used at all.

Kramer Manufacturing produces blenders. Its total fixed costs are $30,000. Its variable costs are $55.00 per blender. As production of blenders increases (within the relevant range) , fixed costs will

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's average fixed costs per unit will be

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the total sales revenue will be

Differentiate between fixed and variable costs and give an example of each.

London Plastics sells a product for $15.00 per unit. The product requires $4.00 per unit in variable costs to produce it. The company plans on selling 12,000 units of this product. If the monthly fixed costs are $84,000, the company's average fixed costs per unit will be

Use the appropriate letter(s)to indicate if the following costs would be found on the income statement of a

A company's total costs are calculated by

A company produces toy airplanes at a variable cost of $23 per toy. If 7,000 toys are produced at a total variable cost of $161,000, the total variable cost at 4,500 toys will be

London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.00 per unit. If the sales price of a unit is $15.00 and London Plastics sell 14,000 units, the company's total variable costs will be

Place the letter for the appropriate value chain activity on the line in front of each item. Letters may be used more than once or not at all. Assume a manufacturer.

Use the correct number to designate each item below. Assume a manufacturer.

Label each item below to make a decision.