Question :
81. Lanley Co. manufactures office furniture. During the most productive month : 1233793
81. Lanley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are: A. $61,875B. $33,875C. $24,750D. cannot be determined from the data given
82. Which of the following statements is true regarding fixed and variable costs? A. Both costs are constant when considered on a per unit basis.B. Both costs are constant when considered on a total basis.C. Fixed costs are fixed in total, and variable costs are fixed per unit.D. Variable costs are fixed in total, and fixed costs vary in total.
83. As production increases, what would you expect to happen to fixed cost per unit? A. IncreaseB. DecreaseC. Remain the sameD. Either increase or decrease, depending on the variable costs
84. Knowing how costs behave is useful to management for all the following reasons except for A. predicting customer demand.B. predicting profits as sales and production volumes change.C. estimating costs.D. changing an existing product production.
85. The manufacturing cost of Lancer Industries for three months of the year are provided below:
Total Cost
Production
April
$ 61,900
1,200 Units
May
80,920
1,800
June
100,300
2,400
Using the high-low method, the variable cost per unit, and the total fixed costs are: A. $32.30 per unit and $77,520 respectively.B. $32 per unit and $23,500 respectively.C. $32 per unit and $76,800 respectively.D. $32.30 per unit and $22,780 respectively.
86. Which of the following statements is correct concerning variable and fixed costs? A. Both costs are constant when considered on a per unit basis.B. Variable costs vary in total and fixed costs are constant on a per unit basis.C. Fixed costs are constant in total and variable costs are constant on a per unit basis.D. Variable costs are constant in total and fixed costs are constant on a per unit basis.
87. As production increases, what should happen to the fixed costs per unit? A. Stay the same.B. Increase.C. Decrease.D. Either increase or decrease, depending on the variable costs.
88. As production increases, what should happen to the variable costs per unit? A. Stay the same.B. Increase.C. Decrease.D. Either increase or decrease, depending on the fixed costs.
89. Sanchez Company manufactures and sells commercial air conditioners. Because of current trends, it expects to increase sales by 15 percent next year. If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year’s total amounts for the following costs. Variable Costs Fixed Costs Mixed Costs A. increase increase increaseB. increase no change increaseC. no change no change increaseD. decrease increase increase
90. Given the following costs and activities for Downing Company electrical costs, use the high-low method to calculate Downings’s variable electrical costs per machine hour.
Costs
Machine Hours
April
$11,700
15,000
May
$13,200
17,500
June
$11,400
14,500
A. 2.08B. 6.00C. .60D. 1.20
