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Multiple Choice Quiz
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1
New Beginnings Company would like to classify its costs according to cost behavior. The following data is available about one of its costs:

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Which of the following classifications best describes the behavior of the cost?
A)Mixed.
B)Variable.
C)Fixed.
D)None of the above.
2
The Garcia Company would like to classify its costs according to cost behavior. The following data is available about one of its costs:

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Which of the following classifications best describes the behavior of the cost?
A)Mixed.
B)Variable.
C)Fixed.
D)none of the above.
3
An analysis of a particular cost incurred in a factory indicates that the cost is an average of $0.40 per machine-hour at an activity level of 20,000 machine-hours and $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
4
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.
5
Which costs will change with an increase in activity within the relevant range?
A)Total fixed costs and total variable cost.
B)Per unit fixed costs and total variable cost.
C)Per unit variable cost and per unit fixed cost.
D)Per unit fixed cost and total fixed cost.
6
Cost #1 is fixed; cost #2 is variable. During the current year, the activity level has increased, but is still within the relevant range. In terms of cost per unit of activity, we would expect that cost:
A)#1 will be unchanged.
B)#2 will decrease.
C)#1 will decrease.
D)#2 will increase.
7
The Van Sant 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.
8
The following information was summarized from the records of the Muentes Company for the first quarter of the year:

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The company's gross margin for the quarter was:
A)$280,000.
B)$380,000.
C)$420,000.
D)$440,000.
9
The following information was summarized from the records of the Muentes Company for the first quarter of the year:

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The company's contribution margin for the quarter was:
A)$280,000.
B)$380,000.
C)$420,000.
D)$600,000.
10
The records of Lindholm Roofing Company include the following data for the first quarter of the most recent year:

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There were no beginning or ending inventories. The company's total contribution margin for the quarter was:
A)$74,500.
B)$174,000.
C)$352,000.
D)$422,000.





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