51. Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows:
Number of miles
Total vehicle costs
January -------------
800
$1,095
February -----------
1,000
1,440
March --------------
750
1,200
April ----------------
900
1,380
May -----------------
1,100
1,410
Refer to the Speedy Couriers information above. Using the high/low method, what is the cost equation to predict total vehicle costs? A. Y = $52.50 + $1.67xB. Y = $255 + $1.05xC. Y = $285 + $1.725xD. Y = $750 + $.60x
52. Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows:
Number of miles
Total vehicle costs
January -------------
800
$1,095
February -----------
1,000
1,440
March --------------
750
1,200
April ----------------
900
1,380
May -----------------
1,100
1,410
Refer to the Speedy Couriers information above. Using the high/low method, if Speedy expects to drive 1,200 miles in June, what will be expected total vehicle costs? A. $1,470.00B. $1,515.00C. $2,056.50D. $1,720.88
53. Denver Manufacturing would like to do a better job budgeting for maintenance costs and, consequently, they have prepared a schedule showing maintenance costs and units produced for the past five months as follows:
Number of
units produced
Total maintenance costs
January -------------
5,400
$4,800
February -----------
6,600
5,180
March --------------
4,900
4,500
April ----------------
5,600
4,900
May -----------------
6,000
5,490
Refer to the Denver Manufacturing information above. Using the high/low method, what is the cost equation to predict total maintenance costs? A. Y = $90 + $.90xB. Y = $2,540 + $.40xC. Y = $1,646 + $.5824xD. Y = $2.50x - $11,320
54. Denver Manufacturing would like to do a better job budgeting for maintenance costs and, consequently, they have prepared a schedule showing maintenance costs and units produced for the past five months as follows:
Number of
units produced
Total maintenance costs
January -------------
5,400
$4,800
February -----------
6,600
5,180
March --------------
4,900
4,500
April ----------------
5,600
4,900
May -----------------
6,000
5,490
Refer to the Denver Manufacturing information above. Using the high/low method, if Denver expects to produce 5,000 units in June, what will be budgeted total maintenance costs? A. $4,590B. $4,558C. $4,540D. $4,363
55. In decision-making, which of the following kinds of costs should always be taken into account? A. Fixed costsB. Variable costsC. Relevant costsD. Sunk costs
56. In decision-making, which of the following statements is true? A. Variable costs can always be viewed as relevant.B. Fixed costs can always be viewed as not relevant.C. Variable costs may or may not be relevant.D. Fixed costs can always be viewed as relevant.
57. In general, when are variable costs not relevant to a decision? A. When they are avoidable.B. When they do not differ among alternatives.C. When they are part of a mixed cost.D. When they are less than fixed costs.
58. In general, when are fixed costs relevant to a decision? A. When they are part of a mixed cost.B. When the fixed cost per unit changes as production changes.C. When they are avoidable.D. When they have already occurred in the past.
59. Another word for a relevant cost is a(n) ____ cost. A. fixedB. unavoidableC. incrementalD. variable
60. University Memorabilia Inc. is a locally run retail shop. The store usually closes at 5:00 pm, but the owners have inquired about the extra costs involved by letting the store stay open until 9:00 pm. The store manager has listed the following monthly expenditures and their related costs:
Item:
1.
Manager salary
$40,000 per year
2.
Store rent
$5,000 per month
3.
Sales’ associates wages
$9 per hour
4.
Store utilities
$4 per hour
Which of the above cost items would be relevant to the decision about staying open extra hours? A. 1, 2, 3, and 4B. 2, 3, and 4C. 2 and 3D. 3 and 4
