Question 1 (1 point) Thomas Train has collected the following information over t
ID: 2642189 • Letter: Q
Question
Question 1 (1 point)
Thomas Train has collected the following information over the last six months.
Using the high-low method, what is the variable cost per unit?
Your Answer:Question 1 options:
Question 2 (1 point)
Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows:
How much are estimated monthly variable costs using the high-low method?
Your Answer:Question 2 options:
Question 3 (1 point)
A cost is $3,600 at 1,000 units, $7,000 at 2,000 units, and $9,200 at 3,000 units. This cost is a
Question 3 options:
mixed cost
step cost
variable cost
fixed cost
Question 4 (1 point)
Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $195,300, how many dollars of revenue must the company generate in order to reach the break-even point?
Your Answer:Question 4 options:
Question 5 (1 point)
Tim Taylor has written a self improvement book that has the following cost characteristics:
How many units must be sold to break-even?
Your Answer:Question 5 options:
Question 6 (1 point)
The use of fixed cost to increase profits at a rate faster than sales increase is called:
Question 6 options:
Month Units produced Total costs March 10,000 $25,600 April 12,000 26,200 May 18,800 27,600 June 13,000 26,450 July 12,000 26,000 August 15,000 26,500 Thomas Train has collected the following information over the last six months. Using the high-low method, what is the variable cost per unit? Your Answer: Question 1 options: Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows: How much are estimated monthly variable costs using the high-low method? Your Answer: Question 2 options: A cost is $3,600 at 1,000 units, $7,000 at 2,000 units, and $9,200 at 3,000 units. This cost is a Question 3 options: Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $195,300, how many dollars of revenue must the company generate in order to reach the break-even point? Your Answer: Question 4 options: Tim Taylor has written a self improvement book that has the following cost characteristics: How many units must be sold to break-even? Your Answer: Question 5 options: The use of fixed cost to increase profits at a rate faster than sales increase is called: Question 6 options: Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $80, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety is: Your Answer: Question 7 options: Which of the following statements about the relevant range is true? Question 8 options:Explanation / Answer
Answer 1
Using high low method.Variable cost per unit (b) is calculated using the following formula:
Where,
y2 is the total cost at highest level of activity;
y1 is the total cost at lowest level of activity;
x2 are the number of units/labor hours etc. at highest level of activity; and
x1 are the number of units/labor hours etc. at lowest level of activity
USing the above formula = we use may for high and March for low
27600- 25600 /(19800-10000) = 0.2041 = Answer
Answer 2
High : May
Low : April
= 6760-4100/( 270- 150) = 22.1667 = Answer
Answer 3
mixed cost
Answer 4
Break Even Sales Dollars = Fixed Costs/Contribution Margin Ratio=184,800/16%=$1,155,000
Answer 5
units must be sold to break-even = (96,600 +22,200)/(16-4-2)= 11880
Answe 6
operating leverage
leverage helps fixed cost to increase profits at a rate faster than sales increase is called
Answer 7
Contribution Margin ratio = (80 - 40)/80 = 50%
Break Even Point (Dollars) = Fixed Cost / Contribution Margin ratio
= 5,000 / 50%
= $10,000
Actual Sales = 80*150 = $12,000
Margin of Safety = (Actual Sales - Break Even Sales)/Actual Sales
= (12000 - 10000) / 12000
= 16.67%
Answer 8
Cost functions within the relevant range are assumed to be linear
Variable Cost per Unit = y2 ? y1 x2 ? x1