Chapter 3 - ASP

b.$572,000 Total cost of manufacturing includes total fixed cost and total variable cost.

Mahogany Company manufactures computer keyboards. The total cost of producing 15,000 keyboards is $410,000. The total fixed cost amounts to $140,000. Determine the total cost of manufacturing 24,000 keyboards. $594,000 b.$572,000 c.$432,000 d.$680,000

c.step cost.

A cost that remains constant for a range of output and then increases to a higher level of total cost at some point, where it remains for a similar range of output is called a: a.variable cost. b.mixed cost. c.step cost. d.fixed cost.

changes in response to small changes in output.

A step cost with narrow steps means that the cost: a.changes only if output changes in large quantities. b.is a committed variable cost. c.is a discretionary variable cost. d.changes in response to small changes in output.

a.The total fixed cost is $1,500, and the variable cost is $3,600. Total Variable Cost = Variable Rate × Units of Output = $2.00 × 1,800 = $3,600Total Fixed Cost = Total Cost - Total Variable Cost = $5,100 - $3,600 = $1,500

Food Service Corp. offers a meal service for commuting college students. In the month of January, 1,800 meals were served at a total cost of $5,100. In February, 1,450 meals were served at a total cost of $4,500, and the total number of meals served for March were 1,300 at a total cost of $4,100. Using the high-low method, the variable cost per unit is $2.00. What is the total fixed cost and the total variable cost for January? a.The total fixed cost is $1,500, and the variable cost is $3,600. b.The total fixed cost is $2,100, and the variable cost is $3,000. c.The total fixed cost is $3,600, and the variable cost is $1,500. d.The total fixed cost is $3,000, and the variable cost is $2,100.

b.mixed cost.

Gamma Company manufactures power transmission grids. It has 7 sales representatives, each earning a salary of $41,000 plus a commission of $190 per grid sold. The total cost associated with the sales representatives is an example of a: a.step cost. b.mixed cost. c.fixed cost. d.variable cost.

independent variable explains 80% of the variability in cost.

If the cost equation yields a coefficient of determination of 80%, it means that the: a.dependent variable explains 80% of the variability in cost. b.independent variable explains 20% of the variability in cost. c.dependent variable explains 20% of the variability in cost. d.independent variable explains 80% of the variability in cost.

committed fixed cost.

The cost of purchase of plant and equipment is an example of a(n): a.committed fixed cost. b.discretionary fixed cost. c.unavoidable variable cost. d.discretionary variable cost.

c.fixed manufacturing overhead

The difference between variable costing and absorption costing hinges on the treatment of: a.variable selling overhead. b.variable manufacturing overhead. c.fixed manufacturing overhead. d.fixed selling overhead.

a.$390,000 Under variable costing, the product cost includes only direct materials, direct labor, and variable overhead.

The following data relates to Alpha Company. Units in beginning inventory — Units produced 24,000 Units sold ($250 per unit) 21,000 Variable costs per unit: Direct materials $35 Direct labor 70 Variable overhead 25 Fixed costs: Fixed overhead per unit produced $50 Fixed selling and administrative expenses 160,000 Determine the value of ending inventory under variable costing. a.$390,000 b.$315,000 c.$330,000 d.$540,000

the better job the independent variable does of explaining the dependent variable

The higher the percentage of cost variability explained by the coefficient of determination, _____. a.the better job the independent variable does of explaining the dependent variable b.the better job the dependent variable does of explaining the independent variable c.the lesser is the accuracy with which the independent variable explains the dependent variable d.the lesser is the accuracy with which the dependent variable explains the independent variable

d.a quantitative estimate of both total fixed costs and the variable cost per unit of the cost drivers.

The purpose of creating a cost formula is to provide a.a qualitative estimate of only the variable cost per unit of the cost drivers. b.a qualitative estimate of both total fixed costs and the variable cost per unit of the cost drivers. c.a quantitative estimate of only the total fixed costs of the cost drivers. d.a quantitative estimate of both total fixed costs and the variable cost per unit of the cost drivers.

b.fixed cost per unit decreases, but the variable cost per unit does not change

When the level of output increases within the relevant range, _____. fixed cost per unit does not change, but the variable cost per unit decreases b.fixed cost per unit decreases, but the variable cost per unit does not change c.both fixed cost per unit and variable cost per unit decrease d.both fixed cost per unit and variable cost per unit do not change

a.Administrative expenses

Which of the following costs is always expensed on the income statement under absorption costing as well as variable costing? a.Administrative expenses b.The cost of direct materials c.The cost of direct labor d.Fixed factory overhead

It has a value of 1 if the independent variable completely explains the variability of the dependent variable.

Which of the following is true of a coefficient of determination? a.It has a value of 1 if the independent variable completely explains the variability of the dependent variable. b.It is the percentage of variability in the independent variable explained by a dependent variable. c.Its value always lies between 1 and 100. d.It is depicted using the symbol D2.

The method of least squares

Which of the following methods identifies the regression line that minimizes the differences between predicted costs and actual costs? a.The method of least squares b.The high-low method c.The scattergraph method d.The managerial judgment method