Accounting I Practice Quiz 3

The TLC Motel, which uses the high/low method to estimate its total cost formula, gathered the following data for the first six months of its current fiscal year: Housekeeping costs # of Room Rentals May $19,970 1,300 June $21,500 1,560 July $23,240 1,740 Aug. $24,760 1,890 Sept. $18,380 1,180 October $16,930 1,020 The estimated total housekeeping cost for a month with 1,400 room rentals is: a. $22,012 b. $21,740 c. $20,350 d. $15,715

$20,350

The TLC Motel, which uses the high/low method to estimate its total cost formula, gathered the following data for the first six months of its current fiscal year: Housekeeping costs # of Room Rentals May $19,970 1,300 June $21,500 1,560 July $23,240 1,740 Aug. $24,760 1,890 Sept. $18,380 1,180 October $16,930 1,020 The fixed housekeeping cost per month is: a. $7,750 b. $7,830 c. $7,882 d. $8,813

$7,750

The Quinter Corporation ordered material for its manufacturing process with a price of $75,000 and that had terms of 1/10 net/30. What is the lowest amount of cash Quinter will have to pay if it meets the terms of the discount agreement? a. $67,500 b. $75,000 c. $74,250 d. $52,500

$74,250

The TLC Motel, which uses the high/low method to estimate its total cost formula, gathered the following data for the first six months of its current fiscal year: Housekeeping costs # of Room Rentals May $19,970 1,300 June $21,500 1,560 July $23,240 1,740 Aug. $24,760 1,890 Sept. $18,380 1,180 October $16,930 1,020 The variable housekeeping cost per room rental is: a. $14.36 b. $10.13 c. $9.06 d. $9.00

$9.00

Norton Corporation has purchased raw materials from a vendor and was offered credit terms of 2/10, n/30. Which of the following reflects these terms? a. 20% discount (2/10) if paid within 30 days b. 2% discount if paid within 10 days c. 10% discount if paid within 30 days and 2% after 30 days d. 2% discount if paid between 10 and 30 days

2% discount if paid within 10 days

Manufacturing products is associated with which of the following processes? a. Revenue process b. Expenditure process c. Conversion process d. Evaluation process

Conversion process

How a cost reacts to a change in the level of operating activity describes: a. The relevant range b. The total cost equation c. Activity driver d. Cost behavior

Cost behavior

Shipping terms indicating that legal title passes to the buyer when goods arrive at the buyer's warehouse are: a. FOB destination b. FOB shipping point c. FOB shipping invoice d. FOB purchase order

FOB destination

A revenue that does not change in total as activity changes is a: a. Relevant revenue b. Mixed revenue c. Fixed revenue d. Variable revenue

Fixed revenue

A cost that increases in total but decreases per unit as the cost driver increases is a(n): a. Activity cost b. Variable cost c. Fixed cost d. Mixed cost

Mixed cost

Goods shipped from a seller's warehouse on Nov 10, 2012, arrived at the buyer's warehouse on Nov 16, 2012. The invoice for the goods arrived at the buyer's accounting department on Nov 13, 2012 and was paid on Nov 20, 2012. If the goods were sold FOB shipping point, the buyer took legal title on: a. Nov 20, 2012 b. Nov 13, 2012 c. Nov 10, 2012 d. Nov 16, 2012

Nov 10, 2012

A company that makes donuts is trying to estimate how much their sugar costs will be. Which of the following activity bases would be the best cost driver? a. Number of donuts b. Number of customers c. Number of employees d. Square feet in store

Number of donuts

Which of the following is part of the revenue process? a. Provide customer support b. Pay suppliers for inventory c. Convert raw material into inventory for sale d. Order inventory for resale

Provide customer support

Which of the following is not part of the expenditure process? a. Receiving goods and services b. Paying suppliers c. Ordering goods and services d. Using equipment to manufacture products

Using equipment to manufacture products

Largo Company's highest and lowest activity levels during the past year were 5,000 labor hours and 3,000 labor hours. The respective costs were $108,000 and $72,000. Determine Largo's cost formula. a. Y = 24.60(X) + 36,000 b. Y = 21.60(X) + 0 c. Y = 18(X) + 18,000 d. Unable to determine form the information given

Y = 18(X) + 18,000