ACG 2071 Test Three

Which of the following costs is a mixed cost

Rental costs of $10,000 per month plus $.30 per machine hour of use

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes

Salary of a factory supervisor

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

contribution margin ratio

Which of the following is an example of a cost that varies in total as the number of units produced changes

direct materials cost

Costs that vary in total in direct proportion to changes in an activity level are called

variable costs

Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

$28,400

How to calculate break even point

Fixed cost divided by unit contribution margin

Which of the graphs in figure 20-1 illustrates the behavior of a total fixed cost

Graph one (A straight horizontal line from left to right)

Which of the graphs illustrates the behavior of a total variable cost

Graph three (A positive sloping 45° angled line)

Which of the graphs illustrates the nature of a mixed cost

Graph two (A positive sloping line higher up on the Y axis as compared to graph three)

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Insurance premiums on factory building

Which of the following activity bases would be the most appropriate for gasoline cost of a delivery service, such as united postal service

Number of miles driven

Which of the following activity bases would be the most appropriate for food costs of a hospital

Number of patients who stay in the hospital

Contribution margin is

The excess of sales revenue over variable cost (The amount remaining from sales revenues after all variable expenses have been deducted.)

break-even point (BEP)

The level of operations at which a company's revenues and expenses are equal. At break even, a company reports neither income nor a loss from operations

The contribution margin ratio is

The same as the profit volume ratio (a ratio computed by dividing contribution margin by dollar sales)

How to calculate the contribution margin ratio

Unit Contribution Margin / unit Selling price

Which of the following conditions would cause the break even point to increase

Unit variable cost increases

Cost behavior refers to the manner in which

a cost changes as the related activity changes