Question : 74. Select the incorrect statement regarding the relevant range of volume. A. Total : 1208130

74. Select the incorrect statement regarding the relevant range of volume. 
A. Total fixed costs are expected to remain constant.
B. Total variable costs are expected to vary in direct proportion with changes in volume.
C. Total cost per unit is expected to remain constant.
D. Variable cost per unit is expected to remain constant.

75. What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $5,000 a month and variable costs are expected to be $100 per client for each quarter? Expected number of clients for the year are:
   
A. $12,500
B. $17,500
C. $27,500
D. $22,500

76. Lighthouse Tours provide seven-day guided tours along the New England coast. The company pays its guides a total of $100,000 per year. The average cost of supplies, lodging and food per customer is $500. The company expects a total of 500 customers during the period January – June, and a total of 1,500 customers from July through December. Lighthouse wants to earn $200 per customer. For promotional reasons the company desires to charge the same price throughout the year. Based on this information, what is the correct price per customer? (round to nearest dollar) 
A. $550
B. $600
C. $750
D. $800

77. Select the incorrect statement regarding the use of average unit costs. 
A. Average costs are relatively easy to compute.
B. Average costs are often more relevant for decision making than are actual costs.
C. Average cost information can help managers evaluate performance of the company or departments in the company.
D. Most customers are willing to wait until the service is rendered before finding out what price will be charged to give the company time to determine actual unit costs.

78. The following information is given regarding driving lessons provided by Arrive Alive Company over several spans of time:
  
Select the incorrect statement from the following. 
A. The average cost per lesson over the five-year period was $9.24.
B. Based on the most current information, the cost per lesson was $12.00.
C. The average cost based on the total five-year period is probably the most appropriate cost for pricing purposes.
D. The selection of the most appropriate time span for calculating the average cost often requires considerable judgment.

79. A cost that contains both fixed and variable elements is referred to as a: 
A. hybrid cost.
B. mixed cost.
C. relevant cost.
D. semi cost.

80. Which of the following costs typically include both fixed and variable components? 
A. Direct materials
B. Direct labor
C. Factory overhead
D. None of these

81. Tri-State Food Service operates six fast food restaurants in the New England area. The company pays rent of $10,000 per year for each shop. The managers of each shop are paid a salary of $3,200 per month and all other employees are paid on an hourly basis. Relative to the number of hours worked, total compensation cost for a particular shop is which kind of cost? 
A. Variable cost
B. Fixed cost
C. Mixed cost
D. None of these

82. Production in 2012 for Stowe Snow Mobile was at its highest point in the month of June when 40 units were produced at a total cost of $600,000. The low point in production was in January when only 15 units were produced at a cost of $340,000. The company is preparing a budget for 2010 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is 
A. $260,000
B. $240,000
C. $184,000
D. $10,400

The following income statements are provided for Lott Company’s last two years of operation:
 

83. Assuming that cost behavior did not change over the two year period, what is the amount of the company’s variable cost of goods sold per unit? 
A. $6.00 per unit
B. $11.00 per unit
C. $8.00 per unit
D. none of these