21. The table below shows the costs of a company’s outputs at various levels:
Output/units 2,000 3,000 4,000
Total costs $ 40,000 60,000 80,000
Unit costs $ 20 20 20
What type of costs is depicted in the above table?
a.
Semi-variable costs
b.
Semi-fixed costs
c.
Variable costs
d.
Fixed costs
22. What is the key difference between Absorption Costing and Marginal Costing?
a.
Marginal Costing only considers variable costs to calculate net income.
b.
Absorption Costing only considers variable costs to calculate net income.
c.
Absorption Costing treats Manufacturing Overhead as a period cost.
d.
Marginal Costing treats fixed manufacturing overhead as a period cost.
23.If a firm experiences an over absorption of overheads then which of the following statements is TRUE?
a.
An adjustment should be made to decrease the opening stock value.
b.
Cost of sales under full costing will decrease by the value of the under absorption.
c.
An adjustment should be made to increase the closing stock value.
d.
Profit under absorption costing will decrease as a result of the over absorption.
24.You are given the following information: Opening inventory 12,500 units; Closing inventory 5,000 units; Sales 75,000 units. The number of units produced during the season would be:
a.
67,500 units
b.
82,500 units
c.
92,500 units
d.
57,500 units
25.Which of the following statements is TRUE?
a.
Contribution doesn’t include fixed cost whereas profit includes fixed cost.
b.
Contribution is not based on the concept of marginal cost.
c.
Contribution must equal sales revenue at the break-even point.
d.
Contribution above breakeven point becomes profit.
26.The information below shows the number of calls made and the monthly telephone bill for the first quarter of the latest year:
Month No. of calls Cost
January 400 $1,050
February 600 $1,550
March 900 $2,300
Using the high-low method the costs could be subdivided into
a.
Fixed cost $50 Variable cost per call $2.50
b.
Fixed cost $50 Variable cost per call $25
c.
Fixed cost $25 Variable cost per call $2.50
d.
Fixed cost $25 Variable cost per call $2.50
27.A company sells 2,000 units/month at $50 each, with a $20 per-unit cost and $3,000 monthly fixed costs. Calculate the profit of the company!
a.
$97,000
b.
$60,000
c.
$57,000
d.
$100,000
28.Determine fixed costs using the high-low method from the following data:
Total costs Level of Activity
$65,000 11,250 units
$52,000 8,000 units
$86,000 16,500 units
a.
$45,000
b.$9,500
c.$16,500
d.$20,000
29.If sales revenue is $35,000, fixed cost is $5,000, and net operating income is $10,000, what is the contribution margin?
a.
$20,000
b.
$15,000
c.
$30,000
d.
$5,000
30.Determine the variable cost per unit using the high-low method from the following data:
Total costs Level of Activity
$65,000 11,250 units
$52,000 8,000 units
$86,000 16,500 units
a.
$4.00 per unit
b.
$2.50 per unit
c.
$12.00 per unit
d.
$10.00 per unit
31.The following data relates to two output levels of a department:
Machine hours 9,000 10,000
Overheads $190,000 $195,000
The variable overhead rate was $5 per hour. The amount of fixed overhead was:
a.
$120,000
b.
$125,000
c.
$115,000
d.
$145,000
32..If direct materials cost $400,000; direct labour costs $300,000 and manufacturing overhead costs $200,000 how much is the total conversion cost?
a.
$400,000
b.
$500,000
c.
$700,000
d.
$600,000
33.ABC Company sells a product for $225 each. The variable cost is $100 per unit. The fixed costs are $375,000. What is the breakeven point in sales dollars?
a.
$843,750
b.
$675,000
c.
$259,615
d.
$375,000
34.The main objective of cost accounting is:
a.
To measure managerial efficiency.
b.
To record day-to-day business transactions.
c.
To determine tender prices
d.
To ascertain the true cost of products and services.
35Margin of safety is equal to
a.
Actual sales / Sales at Breakeven point
b.Budgeted sales – Sales at Breakeven point
c.
Actual sales + Sales at Breakeven point
d.
Actual sales x Sales at Breakeven point
36 Which of the following is described as the process of determining how a particular cost behaves?
a.
Cost expectation
b.
Cost prediction
c.
Cost distinction
d.
Cost estimation
37.Teddy uses the high-low method of estimating costs. He had total costs of
$50,000 at its lowest level of activity, when 5,000 units were sold. When, at its
highest level of activity, sales equalled 12,000 units, total costs were $78,000.
Teddy would estimate variable cost per unit as:
a.
$10.00
b.
$6.50
c.
$4.00
d.
$7.00
38.ABC Company sells shoes for $900 each. The variable cost is $400 per unit.
The fixed costs are $1,250,000. What is the breakeven point in sales dollars?
a.
$865,385
b.
$2,250,000
c.
$2,812,500
d.
$1,250,000
39. 14. Consider the following information:
• Units produced and sold: 1,000 units
• Direct materials cost: $5 per unit
• Direct labor cost: $4 per units
• Variable manufacturing overhead cost: $3 per unit
• Fixed manufacturing overhead cost: $4,000
Based on the above information, the variable cost of goods sold is:
a.
$12,000
b.
$5,000
c.
$16,000
d.
$9,000
40At breakeven point
a.
Total expenses < Total revenue
b.
Total revenue is equal to zero
c.
Total expenses = Total revenue
d.
Total expenses > Total revenue
