ACC650
Module 4 - Cost Estimation and CVP Analysis
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1. DuChien
Corporation recently produced and sold 100,000 units. Fixed costs at this level
of activity amounted to $50,000; variable costs were $100,000. How much cost
would the company anticipate if during the next period it produced and sold
102,000 units?
a. $150,000.
$151,000.
$152,000.
$153,000.
Some other amount not
listed above.
2. The
difference between budgeted sales revenue and break-even sales revenue is the:
a.
contribution margin.
contribution-margin
ratio.
safety margin.
target net profit.
operating leverage.
3. At a volume
of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of
$300,000, and fixed costs of $260,000. The company's break-even point in units
is:
a. 7,027
(rounded).
8,667 (rounded).
9,286 (rounded).
7,429 (rounded).
an amount other than
those above.
At a volume of 20,000 units, Dries reported sales revenues
of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The
company's break-even point in units is:
Selling price = 1,000,000/20,000 = 50
VC per unit = 300,000/20,000 = 15
Contribution margin per unit = 50 - 15 = 35
BEP = 260,000/35 = 7428.57 (rounding off 7,429)
4. The
contribution-margin ratio is:
a. the
difference between the selling price and the variable cost per unit.
fixed cost per unit
divided by variable cost per unit.
variable cost per
unit divided by the selling price.
unit contribution
margin divided by the selling price.
unit contribution
margin divided by fixed cost per unit.
5. Which of the
following methods of cost estimation relies on only two data points?
a.
Least-squares regression.
The high-low method.
The visual-fit
method.
Account analysis.
Multiple regression.
6. Within the
relevant range, a curvilinear cost function can sometimes be graphed as a:
a. sloping
straight line.
jagged line.
vertical straight
line.
curved line.
horizontal straight
line.
7. A manager
who wants to determine the percentage impact on income of a given percentage
change in sales would multiply the percentage increase/decrease in sales
revenue by the:
a.
contribution margin.
gross margin.
operating leverage
factor.
safety margin.
contribution-margin
ratio
8. A forecast
of a cost at a particular level of activity is termed:
a. cost
estimation.
cost prediction.
cost behavior.
cost analysis.
cost approximation.
9. Ribco Co.
makes and sells only one product. The unit contribution margin is $6 and the
break-even point in unit sales is 24,000. The company's fixed costs are:
a. $4,000.
$14,400.
$40,000.
$144,000.
an amount other than
those above.
10. Booster, Inc.
recently conducted a least-squares regression analysis to predict selling
expenses. The company has constructed the following regression equation: Y =
329,000 + 7.80X. Which of the following statements is false if the primary cost
driver is number of units sold?
a. The company
anticipates $329,000 of fixed selling expenses.
"Y"
represents total selling expenses.
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