Question 1 (1 point) Thomas Train has collected the following information over t

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:

What if analysis

C-V-P analysis

operating leverage

contribution margin approach

Question 7 (1 point)

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:

Question 8 (1 point)

Which of the following statements about the relevant range is true?

Question 8 options:

Cost functions outside the relevant range are usually linear

The relevant range is the normal length of time in a companys accounting period

Estimates outside the relevant range are useful

Cost functions within the relevant range are assumed to be linear

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. 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? 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 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? Tim Taylor has written a self improvement book that has the following cost characteristics: The use of fixed cost to increase profits at a rate faster than sales increase is called: 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: Which of the following statements about the relevant range is true?

Explanation / Answer

1. Variable Cost = Total Cost at highest units-cost at lowest units/highest-lowest unit

=27600-25600/18800-10000=.227

2 variable Cost .=6640-4100/285-150   =18.81 per Room

3. The cost is mixed cost

4. Break Even Point=Total Fixed Cost/Contribution margin ratio 195300/16%=1220625 $

5. Break Even Point=fixed xost/contribution

fixed cost=97800+25200=123000

contribution=16-4-2=10

Brak Even=123000/10=12300 units

6. Operating Leverage

7.Margin Of safety= Sales - Break Even units

Break Even units= fixed cost/contribution=5000/40=125

Margin Of Safety=150-125=25 units

8. Cost function outside the relevant range are linear

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