1.If there is a change in the level of the number of unitsproduced:
a.fixed costs per unit will be the same and variable costs per unitwill change.
b.fixed and variable costs per unit will change.
c.fixed and variable costs per unit will remain the same.
d.fixed costs per unit will change and variable costs per unit willbe the same.
2.Which of the following will decrease a companyâs breakevenpoint?
A) Decreasing the contribution margin per unit.
B) Increasing the variable cost per unit.
C) Increasing the total fixed costs.
D) Increasing the selling price per unit.
3.In generating cost information fordetermining whether or not to delete a product line, the mostimportant distinction to identify is:
A)
direct versus indirect costs
B)
fixed versus variable costs
C)
manufacturing versus non-manufacturing costs
D)
avoidable versus unavoidable costs
4.Which of the following is the proper sequence in anactivity-based costing system?
A) Identification of cost drivers, identification ofcost pools, calculation of cost application rates, assignment ofcost to products.
B) Identification of cost pools, identification of costdrivers, calculation of cost application rates, assignment of costto products.
C) Assignment of cost to products, identification ofcost pools, identification of cost drivers, calculation of costapplication rates,.
D) Calculation of cost application rates,identification of cost drivers, identification of cost pools,assignment of cost to products.
5.Which of the following statements is true?
A) A traditional volume-based system based on directlabor generally undercosts high volume product lines.
B) In a traditional volume-based costing system basedon direct labor, low volume products generally subsidize highvolume products.
C) An activity-based costing system generallyundercosts low-volume, complex product lines.
D) A traditional volume-based costing system based ondirect labor generally undercosts low-volume, complex productlines.
6.Hamilton Company applies overhead based on direct labor hours.At the beginning of 2005, the company estimated that manufacturingoverhead would be $700,000, and direct labor hours would be 10,000.Actual overhead by the conclusion of 2005 amounted to $800,000 andactual direct labor hours were 14,000. On the basis of thisinformation, Horton's 2005 predetermined overhead rate is:
A) $50.00
B) $70.00
C) $80.00
D) $57.14
1.If there is a change in the level of the number of unitsproduced:
a.fixed costs per unit will be the same and variable costs per unitwill change.
b.fixed and variable costs per unit will change.
c.fixed and variable costs per unit will remain the same.
d.fixed costs per unit will change and variable costs per unit willbe the same.
2.Which of the following will decrease a companyâs breakevenpoint?
A) Decreasing the contribution margin per unit.
B) Increasing the variable cost per unit.
C) Increasing the total fixed costs.
D) Increasing the selling price per unit.
3.In generating cost information fordetermining whether or not to delete a product line, the mostimportant distinction to identify is: | ||
A) | direct versus indirect costs | |
B) | fixed versus variable costs | |
C) | manufacturing versus non-manufacturing costs | |
D) | avoidable versus unavoidable costs | |
4.Which of the following is the proper sequence in anactivity-based costing system?
A) Identification of cost drivers, identification ofcost pools, calculation of cost application rates, assignment ofcost to products.
B) Identification of cost pools, identification of costdrivers, calculation of cost application rates, assignment of costto products.
C) Assignment of cost to products, identification ofcost pools, identification of cost drivers, calculation of costapplication rates,.
D) Calculation of cost application rates,identification of cost drivers, identification of cost pools,assignment of cost to products.
5.Which of the following statements is true?
A) A traditional volume-based system based on directlabor generally undercosts high volume product lines.
B) In a traditional volume-based costing system basedon direct labor, low volume products generally subsidize highvolume products.
C) An activity-based costing system generallyundercosts low-volume, complex product lines.
D) A traditional volume-based costing system based ondirect labor generally undercosts low-volume, complex productlines.
6.Hamilton Company applies overhead based on direct labor hours.At the beginning of 2005, the company estimated that manufacturingoverhead would be $700,000, and direct labor hours would be 10,000.Actual overhead by the conclusion of 2005 amounted to $800,000 andactual direct labor hours were 14,000. On the basis of thisinformation, Horton's 2005 predetermined overhead rate is:
A) $50.00
B) $70.00
C) $80.00
D) $57.14
Related questions
Cane Company manufactures two products called Alpha and Betathat sell for $240 and $162, respectively. Each product uses onlyone type of raw material that costs $5 per pound. The company hasthe capacity to annually produce 131,000 units of each product. Itsunit costs for each product at this level of activity are givenbelow:
| ALPHA | BETA | |
| Direct Materials | $35 | $15 |
| Direct Labor | $48 | $23 |
| Variable Manufacturing Overhead | $27 | $25 |
| Traceable fixed manufacturing overhead | $35 | $38 |
| Variable selling expenses | $32 | $38 |
| Common fixed expenses | $35 | $30 |
| Total cost per unit | $212 | $159 |
***The company considers its traceable fixed manufacturingoverhead to be avoidable, whereas its common fixed expenses aredeemed unavoidable and have been allocated to products based onsales dollars.
10. Assume that Cane expects to produce and sell 75,000 Alphasduring the current year. A supplier has offered to manufacture anddeliver 75,000 Alphas to Cane for a price of $160 per unit. If Canebuys 75,000 units from the supplier instead of making those units,how much will profits increase or decrease?
