Accounting Chapter 3 review

A company used the high/low method and determined that the variable cost per unit was $6 while the fixed cost per month was $10,000. What is the estimated total cost if 200 units are produced?

$11,200

A company ships $20,000 of merchandise with terms 1/10, n/30, FOB destination. What is the amount of the discount available to the purchaser?

$2,000

A company used the high/low method and determined that the change in cost was $10,000 when the change in activity was 5,000 orders. What is the variable cost per order?

$2.00

A company purchases $25,000 of merchandise with terms 3/10, n/60; FOB shipping point on December 30. The merchandise arrives on January 3 and the company pays its bill on January 13. How much does the company owe?

$25,000

What will the variable cost per unit be if 1,800 "units" of activity are completed?

$34.90

A company used the high/low method and determined that the variable revenue per order was $3.00. At the lowest level of activity, 100 orders, the total revenue was $800. What is the fixed revenue per order?

$500

What will the total cost be if 1,800 "units" of activity are completed?

$62,820

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?

$74,250

A sales discount is

A) an inducement for customers to pay their bills in a timely manner. B) reduction off the full invoice amount C) the same as a purchase discount but from the seller's point of view D) ALL OF THE ABOVE

If goods are shipped FOB destination, when does title pass?

At the buyer's location.

FOB shipping point indicates that goods in transit belong to the:

Buyer

Manufacturing products is associated with which of the following processes?

Conversion process

Determining the company's needs for goods and services is associated with which of the following processes?

Expenditure process

Selecting suppliers for a company's goods and services is part of the:

Expenditure process

Which of the following activity bases would be the best cost driver for flour costs for a pizzeria?

Number of pizzas

Delivery of goods is associated with which of the following process?

Revenue process

Determining the credit and payment policies for customers is part of the:

Revenue process

Which of the following is NOT a variable cost?

Salary of product inspectors

The "I Can't Believe It's Yogurt" shop sells only yogurt and only in cups. Which of the following would be a variable cost if number of customers is the cost driver?

Spoons

Which of the following is part of the conversion process?

Storing finished manufactured goods until they are sold

Goods shipped from a seller's warehouse on April 10 using the terms FOB Shipping Point. On the way to the buyer's warehouse the truck hauling the goods wrecked and the goods were destroyed. Who will get the insurance check covering the loss?

The buyer

The Banner Company ordered $50,000 of fertilizer from Farmland Industries and were given terms of 2/15 net/60. Which of the following describes how soon the payment must be made in order to receive a discount and the amount of the discount available.

Within 15 Days $ 1,000

The cost exhibited above is a:

fixed cost

The relevant range is

the normal range of activity for the company. AND used to define cost and revenue behavior patterns.

A variable cost is

variable per "unit" of activity