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| 1 | |
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 |
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| 2 | |
Which of the following would not be classified as manufacturing overhead? |
| | 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 |
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| 3 | |
Which of the following would not be classified as a product cost? |
| | 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 |
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| 4 | |
An analysis of a particular cost incurred in a factory revealed that the cost 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 |
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| 5 | |
Given the cost formula Y = $30,000 + $5X, what is the expected total cost at an activity level of 16,000 units? |
| | A) | $30,000 |
| | B) | $46,000 |
| | C) | $80,000 |
| | D) | $110,000 |
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| 6 | |
Hadron Company incurred $40,000 to ship 19,000 pounds and $34,000 to ship 16,000 pounds. If the company ships 18,000 pounds, what is its expected shipping expense? |
| | A) | $37,000 |
| | B) | $37,895 |
| | C) | $38,000 |
| | D) | $38,250 |
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| 7 | |
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. |
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| 8 | |
The following information was summarized from the records of the Galecki Company for the year just ended:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0027162757/1029179/ch02_q8.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (84.0K)</a>]]>
What was the company's contribution margin? |
| | A) | $280,000 |
| | B) | $380,000 |
| | C) | $420,000 |
| | D) | $600,000 |
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| 9 | |
The following information was summarized from the records of the Galecki Company for the year just ended:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0027162757/1029179/ch02_q9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (84.0K)</a>]]>
(Note that the information set forth above is that same as that provided for the previous question.) What was the company's gross margin? |
| | A) | $280,000 |
| | B) | $380,000 |
| | C) | $420,000 |
| | D) | $440,000 |
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| 10 | |
Which of the following matches the definition of an opportunity cost? |
| | A) | The difference between the total cost of one alternative and the total cost of another alternative. |
| | B) | The potential benefit that is given up 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. |
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