Question : 51.Select the incorrect statement regarding the relevant range of volume. A. Total : 1257103

 

 

51.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. Variable cost per unit is expected to remain constant.

 

D. Total cost per unit is expected to remain constant.

 

 

52.What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $4,000 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. $24,500

 

C. $16,500

 

D. $19,500

 

 

53.Yankee 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. Yankee wants to earn $100 income 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. $450

 

B. $500

 

C. $650

 

D. $700

 

 

54.Select the incorrect statement regarding the use of average unit costs.   

A. Average costs should be calculated for a sufficiently long time period to capture seasonal fluctuations in costs.

 

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. Cost averaging should be used only for fixed costs, and not for variable costs.

 

 

55.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.

 

 

56.A cost that contains both fixed and variable elements is referred to as a:   

A. mixed cost.

 

B. hybrid cost.

 

C. relevant cost.

 

D. nonvariable cost.

 

 

57.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

 

 

58.Southern Food Service operates six restaurants in the Atlanta area. The company pays rent of $20,000 per year for each shop. The managers of each shop are paid a salary of $4,200 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. Mixed cost

 

B. Fixed cost

 

C. Variable cost

 

D. None of these

 

 

59.Production in 2013 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 80 units were produced at a total cost of $800,000. The lowest point in production was in January when only 20 units were produced at a cost of $440,000. The company is preparing a budget for 2013 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. $120,000

 

B. $320,000

 

C. $480,000

 

D. $360,000

 

 

60.The following income statements are provided for Li Company’s last two years of operation:  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. $12.00 per unit

 

B. $16.00 per unit

 

C. $22.00 per unit

 

D. None of these