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WorksheetsQUIZ CHAPTER 3 & 4
Total questions: 10
Worksheet time: 5mins
Variable costs are costs that:
vary in total directly and proportionately with changes in the activity level
remain the same per unit at every activity level.
Neither of the above
Both (a) and (b) above
The relevant range is:
the range of activity in which variable costs will be curvilinear.
the range of activity in which fixed costs will be curvilinear.
the range over which the company expects to operate during a year
usually from zero to 100% of operating capacity.
Mixed costs consist of a:
variable-cost element and a fixed-cost element.
fixed-cost element and a product-cost element.
period-cost element and a product-cost element.
variable-cost element and a period-cost element.
Your cell phone service provider offers a plan that is classified as a mixed cost. The cost per month for 1,000 minutes is $50. If you use 2,000 minutes this month, your cost will be:
$50
$100.
more than $100
between $50 and $100.
Kendra Corporation's total utility costs during the past year were $1,200 during its highest month and $600 during its lowest month. These costs corresponded with 10,000 units of production during the high month and 2,000 units during the low month. What are the fixed and variable components of its utility costs using the high-low method?
$0.075 variable and $450 fixed.
$0.120 variable and $0 fixed.
$0.300 variable and $0 fixed.
$0.060 variable and $600 fixed.
Which of the following is not involved in CVP analysis?
Sales mix.
Unit selling prices.
Fixed costs per unit
Volume or level of activity.
Contribution margin:
is revenue remaining after deducting variable costs.
may be expressed as unit contribution margin.
is selling price less cost of goods sold.
Both (a) and (b) above
Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is $200,000. What should be reported as variable expenses in the CVP income statement?
(a) (b) (c)(d)
$700,000.
$900,000
$500,000
$1,000,000.
The mathematical equation for computing required sales to obtain target net income is Required sales =
Variable costs + Target net income.
Variable costs + Fixed costs+ Target net income.
Fixed costs + Target net income.
No correct answer is given.
Margin of safety is computed as:
Actual sales − Break-even sales
Contribution margin − Fixed costs
Break-even sales − Variable costs.
Actual sales − Contribution margin.
