Question : 21. Howard Inc. provides temporary clerical services to local businesses. The : 1295550

 

21. Howard Inc. provides temporary clerical services to local businesses. The company has determined that total costs for a given month can be predicted by using the following formula:Total Costs = $2,500 + $20xwhere “x” equals total direct labor hours for the month. If total direct labor hours for June are expected to be 600, what are total costs expected to be? A. $  9,500B. $14,500C. $12,000D. $ 2,520

22. Logan Inc. plans to double its rental space next year which will increase its fixed costs by 40% while variable costs remain the same. Current year costs are as follows: 

 

Variable costs

$10 per unit

 

Fixed costs

$30,000

 

 

 

If next year production is expected to be 20,000 units, estimated total costs will be: A. $242,000B. $230,000C. $322,000D. $212,000

 

23. Jansen Inc. currently produces and sells 12,000 units per year with the following cost data: 

 

Variable costs

$10 per unit

 

Fixed costs

$30,000

 

 

 

Next year, Jansen plans to increase its advertising budget, which will increase fixed costs by 5%. With increased advertising, the company expects the number of units produced and sold to increase by 8%. What are budgeted total costs expected to be next year? A. $151,500B. $159,600C. $161,100D. $166,080

 

24. Bob’s Burgers currently produces and sells 4,000 burgers per month with the following costs: 

 

Variable costs

$.50 per unit

 

Fixed costs

$2,000

 

 

 

Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month. Refer to the Bob’s Burgers information above. What will be Bob’s new cost equation? A. Total costs = $2,000 + $.50xB. Total costs = $2,000 + $.45xC. Total costs = $4,000 + $.50xD. Total costs = $1,960 + $.45x

 

25. Bob’s Burgers currently produces and sells 4,000 burgers per month with the following costs: 

 

Variable costs

$.50 per unit

 

Fixed costs

$2,000

 

 

 

Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month. Refer to the Bob’s Burgers information above. Bob anticipates selling 4,200 burgers during the month of July. What will be estimated total costs during July? A. $3,850B. $4,000C. $4,100D. $4,410

 

26. Quality Products Inc. incurred total costs of $50,000 to produce 1,400 units. Variable costs are $15 per unit. What are estimated fixed costs? A. $21,000B. $71,000C. $48,600D. $29,000

 

27. Bixby Inc. expects total costs to be $2,500 when 80 units are sold and the variable cost is $10 per unit. Bixby expects to sell 90 units in July. What will be expected total costs in July? A. $3,400.00B. $2,600.00C. $2,812.50D. $4,200.00

 

28. Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The following shows the budgeted housekeeping costs per month at various occupancies: 

Number of occupied rooms

Housekeeping costs

  0 – 25

$1,500

26 – 40

  3,000

41 – 55

  4,500

 

 

Refer to the Chadwick Ski Lodge information above. What type of cost is housekeeping? A. Fixed B. VariableC. StepD. Mixed

 

29. Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The following shows the budgeted housekeeping costs per month at various occupancies: 

Number of occupied rooms

Housekeeping costs

  0 – 25

$1,500

26 – 40

  3,000

41 – 55

  4,500

 

 

Refer to the Chadwick Ski Lodge information above. The number of occupied rooms during the month of January is expected to be between 41 and 55 at all times. For the month of January, what type of cost does housekeeping effectively become? A. FixedB. VariableC. StepD. Mixed

 

30. A cost that has both a fixed and variable component is called a: A. step cost.B. mixed cost.C. product cost.D. relevant cost.