Acctg 432 Chap 2

An opportunity cost is: A) the difference between the total cost of one alternative and the total cost of another alternative. B) the benefit forgone when one alternative is selected rather than another. C) a cost that is saved by not adopting a given alternative. D) a cost that continues to be incurred even when there is no activity.

B) the benefit forgone when one alternative is selected rather than another.

The Sante Company incurred $40,000 to ship 19,000 pounds and $34,000 to ship 16,000 pounds. If the company ships 18,000 pounds, its expected shipping expense is closest to: A) $37,000. B) $37,895. C) $38,000. D) $38,250.

C) $38,000.

An analysis of a particular cost incurred in a factory revealed that the cost is averages $0.40 per machine-hour at an activity level of 20,000 machine hours and increases to an average of $0.50 per machine hour at an activity level of 16,000 machine hours. Assuming that this activity is within the relevant range, what is the total expected cost if the activity level is 17,300 machine hours? A) $1,600 B) $6,960 C) $8,000 D) $9,000

C) $8,000

Which one of the following costs would not be considered an indirect cost of serving a particular customer at a delicatessen? A) The salary of the manager. B) The cost of the tables and chairs used to furnish the restaurant. C) The cost of the bread used to make the sub sandwich that is ordered. D) The cost of lighting and heating the restaurant.

C) The cost of the bread used to make the sub sandwich that is ordered.

All of the following would be classified as product costs except: A) the cost of air-conditioning the factory foreman's office. B) depreciation on the machinery in the factory. C) the cost of shipping units of product to one of the company's customers. D) All of the above would be classified as product costs.

C) the cost of shipping units of product to one of the company's customers.

Given the cost formula Y = $30,000 + $5X, total cost at an activity level of 16,000 units would be: A) $30,000. B) $46,000. C) $80,000. D) $110,000.

D) $110,000.

All of the following would be classified as manufacturing overhead except the: A) wages of supervisor of the machining shop. B) depreciation of the equipment in the machining shop. C) property taxes relating to the building that houses the machining shop. D) All of the above would be classified as manufacturing overhead.

D) All of the above would be classified as manufacturing overhead.

Within the relevant range: A) both total variable costs and total fixed costs will remain constant. B) both total variable costs and total fixed costs fluctuate. C) fixed costs per unit will remain constant and variable costs per unit will fluctuate. D) variable costs per unit will remain constant and fixed costs per unit will fluctuate.

D) variable costs per unit will remain constant and fixed costs per unit will fluctuate.

The following information was summarized from the records of the Muentes Company for the first quarter of the year: Sales 700K Fix Admin 110 Fix COG 100 Fix Sell 50 Var Admin 30 Var COG 220 Var Sell 170 The company's contribution margin for the quarter was: A) $280,000. B) $380,000. C) $420,000. D) $600,000.

Sales -Var Cost Cont Margin 280

The following information was summarized from the records of the Muentes Company for the first quarter of the year: Sales 700K Fix Admin 110 Fix COG 100 Fix Sell 50 Var Admin 30 Var COG 220 Var Sell 170 The company's gross margin for the quarter was: A) $280,000. B) $380,000. C) $420,000. D) $440,000.

Sales -COG(Fix and Var) Gross Margin 380