Ferg Acctg Bellringer 50 Managerial

Which of the following is NOT an example of a variable cost?

• Executive salaries

• Fuel

• Materials

• Production labor

An analysis of the manufacturing process shows that $10,000 in raw materials will make 1,000 items. The advertising cost is set at $2,000, and the warehouse rent is $2,500. What is the variable cost per unit of this company based on this information?

• $10.00

• $12.00

• $12.50

• $14.50

Which of the following are insignificant in investment decisions?

• Sunk costs

• Variable costs

• Fixed costs

• Administrative costs

If you know the variable cost and the fixed cost, what other piece of information will you need to calculate the total cost?

• Quantity being produced

• Raw material cost

• Manufacturing time

• Overhead

Most overhead costs would be categorized as which of the following?

• Fixed cost

• Variable costs

• Mixed cost

• Opportunity cost

It costs your company $12 per item in manufacturing costs. The rent on the warehouse is $40,000, and the administrative salaries are $52,000. What is the total cost to manufacture 100,000 units?

• $1,292,000

• $1,200,000

• $1,252,000

• $1,240,000

An investor is deciding if they should sell their mutual funds that earn 3% to buy stock that may earn a greater return. What kind of cost is the loss of the 3% return?

• Opportunity cost

• Total cost

• Administrative cost

• Sunk cost

Opportunity costs always need _____.

• two or more alternative actions

• the use of the stock market

• a change in capital assets

• a financial investment

What type of cost would be the result of a bomb threat that shut down the facility for a day?

• Implicit costs from lost profit

• Explicit cost from goodwill

• Explicit cost from lost profit

• Implicit cost from goodwill

Big Business Inc. allocates clerical staff hours to shredding papers. What type of cost is this?

• Implicit

• Fixed

• Variable

• Explicit