1) Java Joe opeprices a chain of coffee shops. The agency pays rent of $20,000 per year for each shop. Supplies (napkins, bags, and also condiments) are purchased as essential. The manager of each shop is passist a salary of $3,000 per month, and also all other employees are passist on an hourly basis. Relative to the number of customers for a shop, the cost of gives is which kind of cost?A) Relevant costB) Variable costC) Fixed costD) Mixed cost


You are watching: Whether a cost behaves as a fixed cost or as a variable cost depends upon the:

2) Select the correct statement about fixed costsA) The addressed expense per unit dos not readjust when volume decreasesB) The addressed cost per unit decreases once volume increasesC) Due to the fact that they do not adjust, fixed costs have to be ignored in decision makingD) The fixed price per unit increases as soon as volume increases
3) Larry"s Lawn Care incurs considerable gasoline prices. This price would certainly be classified as a variable expense if the complete gasoline cost:A) is not affected by the variety of hrs the lawn tools is operatedB) boosts in direct propercent of the variety of hours the lawn equipment is operatedC) varies inversely with the variety of hrs the lawn equipment is operatedD) namong the above
4) Select the correct statement about resolved costsA) Fixed cost per unit is not fixedB) Total resolved cost stays constant once volume changesC) Tright here is a contradiction in between the term "solved expense per unit" and the habits pattern implied by the termD) All of these are correct statements
5) Rock Creek Bottling Company type of pays its manufacturing manager a salary of $6,000 per month. Salespersons are phelp strictly on commission, at $1.50 for each instance of product marketed. For Rock Creek Bottling Company, the manufacturing manager"s salary is an instance of:A) a mixed costB) a addressed costC) a variable costD) none of these
6) Rock Creek Bottling Company type of pays its manufacturing manager a salary of $6,000 per month. Salespersons are paid strictly on commission, at $1.50 for each situation of product marketed. For Rock Creek Bottling Company type of, the expense of the salespersons" comobjectives is an instance of:A) a mixed costB) a fixed costC) a variable costD) namong these
7) Fixed cost per unit:A) decreases as production volume increasesB) increases as manufacturing volume increasesC) is not influenced by transforms in the production volumeD) decreases as manufacturing volume decreases
8) Operating leverage exists when:A) a firm utilizes debt to finance its assetsB) the organization provides purchases on credit rather of paying cashC) tiny portion transforms in revenue produce huge portion transforms in profitD) administration buys sufficient of the company"s shares of stock to take control of the corporation
9) Select the correct statement from the following.A) A addressed cost structure uses higher risk but better chance for profitcapability than does a variable cost structureB) A variable cost structure offers greater threat however better possibility for profitcapability than does a addressed variable cost structureC) A resolved expense structure supplies less risk( i.e., much less earnings volatility) and higher opportunity for profitcapability than does a variable price structureD) A variable price framework offers much less threat and also better opportunity for profitcapacity than does a addressed price structure
A) A fixed cost structure offers better hazard however better chance for profitcapability than does a variable cost structure
10) The manager of Kenton Company declared that 45% of its complete costs were addressed. The manager was describing the company"s: A) price structureB) operating leverageC) contribution marginD) cost averaging
11) The excess of revenue over variable prices is referred to as:A) gross marginB) contribution marginC) gross profitD) manufacturing margin
12) In order to prepare a contribution format income statement, costs must be separated into:A) blended, variable, and resolved costsB) variable and also fixed costsC) Manufacturing and also selling, general, and also administrative costsD) expense of products marketed and operating expenses
13) Whether a cost behaves as a solved price or as a variable expense depends upon the:A) activity based usedB) significance of the dollar amount of the costC) price framework of the companyD) industry
14) Craft , Inc. normally produces in between 120,000 and 150,000 devices yearly. Producing more than 150,000 units alters the company"s cost framework. For instance, addressed expenses boost bereason even more space should be rented, and also extra supervisors must be hired. The manufacturing selection between 120,000 and 150,000 is referred to as the :A) median rangeB) differential rangeC) pertinent rangeD) leverage range
15) Mug shots operates a chain of coffee shops. The company pays rent of $15,000 per year for each shop. Supples (napkins, bags, and also condiments) are purchased as essential. The managers of each shop are phelp a salary of $2,500 per month and also all various other employees are passist on an hourly basis. The price of rent loved one to the variety of customers in a particular shop and also family member to the number of customers in the whole chain of shops is which kin do price, respectively? A) Variable price and also variable costB) Variable price and also resolved costC) Fixed expense and also variable expense D) Fixed expense and also fixed cost
16) Select the incorrect statement about the appropriate variety of volumeA) Total uncover prices are expected to remajor constantB) Total variable expenses are supposed to vary in direct propercentage through alters in volumeC) Total price per unit is supposed to remajor constantD) Variable cost per unit is meant to remain constant
17) A price that consists of both fixed and also variable elements is referred to as a:A) combined costB) non variable costC) relevant costD) hybrid cost
18) Which of the complying with expenses commonly incorporate both addressed and also variable components?A) Direct labor B) Direct materialsC) Factory overheadD) None of these
19) Southern Food Service operates 6 restaurants in the Atlanta location. The firm pays rent of $20,000 per year for each shop. The manager of each shop are paid a salary of $4,200 per month and also all various other employees are phelp on an hourly basis. Relative to the variety of hrs functioned, total compensation price for a details shop is which sort of cost?A) Fixed costB) Variable costC) Mixed costD) None of these
20) Taste of the Tvery own, Inc. operates a gourmet sandwich shop. The agency orders bread, cold cuts, and create several times a week. If the cost of these items continues to be continuous per customer offered the expense is shelp to be: A) VariableB) Opportunity C) Mixed D) Fixed
21) All of the following would be considered a resolved expense for a bottled water company except:A) Property taxes on its manufacturing facility buildingB) Depreciation on its manufacturing devices C) Rent on warehouse facilityD) Hourly weras for machine operators
22) Once sales reach the break-also suggest, each added unit offered will:A) minimize the margin of security B) boost profit by an amount equal to the per unit contribution marginC) rise addressed expense by a proportionate amountD) boost the company"s operating leverage
23) The margin of safety ratio can be defined as the:A) Excess of budgeted sales over break-even separated by the budgeted salesB) Excess of budgeted sales over the break-even sales separated by the break-also salesC) Excess of budgeted sales over the addressed costs separated by budgeted salesD) Excess of budgeted sales over variable costs split by budgeted sales
24) Chesterfield Corporation has been operating well over its break-even point. What will happen to Chesterfield"s margin of security if the variable cost per unit increases?A) The break-even allude would certainly rise, and also the margin of security would increaseB) The break-even allude would certainly decrease, and also the margin of safety would increaseC) The break-even suggest would certainly decrease, and also the margin of safety and security would certainly decreaseD) The break-even suggest would certainly rise, and the margin of safety would decrease
25) At the break-even point:A) Sales would certainly be equal to the complete costsB) Both sales would be equal to total prices and also contribution margin would certainly be equal to total resolved prices are correct C) Contribution margin would be equal to full solved costsD) Sales would certainly be equal to solved costs
B) Both sales would certainly be equal to full expenses and also contribution margin would certainly be equal to complete addressed expenses are correct
Wu Company kind of incurred $40,000 of addressed expense and also $50,000 of variable cost as soon as 4,000 units of product were made and offered.If the company"s volume doubles, the complete cost per unit will:stay the samedecreasedouble as wellincrease yet will not double
In the graph below, which depicts the relationship in between units developed and also complete expense, the dotted line depicts which kind of complete cost? - - -Variable price Fixed costMixed costNone of these
In the graph listed below, which depicts the relationship in between devices created and also unit cost, the dotted line depicts which type of price per unit -----------------Variable costFixed costMixed costNone of these
Fixed price per unit: A). decreases as production volume decreasesB). is not influenced by changes in the production volumeC). decreases as production volume increasesD). rises as production volume increases
For the last two years BRC Company type of had net earnings as follows:2012: 160,0002013: 200,000What was the percentage adjust in earnings from 2012-2013?A) 20% increaseB) 20% decreaseC) 25% increaseD) 25% decrease
The excess of a product"s marketing price over its variable expenses is referred to as:A) gross profitB) gross marginC) contribution marginD) production margin
The following earnings statement is provided for Ramirez Company in 2013: What amount was the company"s contribution margin?
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Fundamentals of Financial Management, Concise Edition (via Thomkid ONE)8th EditionEugene F. Brigham, Joel F Houston


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