Question : 61.The following income statements provided for Li Company’s last two : 1257104

 

61.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 annual amount of the company’s fixed manufacturing overhead?   

A. $12,000

 

B. $24,000

 

C. $26,000

 

D. None of these

 

 

62.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 company’s annual fixed general, selling, and administrative cost?   

A. $6,500

 

B. $6,000

 

C. $3,000

 

D. $2,500

 

 

63.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 Li Company’s contribution margin in 2013?   

A. $33,000

 

B. $32,000

 

C. $39,000

 

D. $69,000

 

 

64.The results below represent what form of cost behavior?     

A. Fixed Cost

 

B. Variable Cost

 

C. Mixed Cost

 

D. Opportunity Cost

 

 

65.Based on the following operating data, the operating leverage is:     

A. 0.18

 

B. 5.50

 

C. 1.22

 

D. 12.5

 

 

66.The following information is for Gable, Inc. and Harlowe, Inc. for the recent year.  Based on the above data, which company has a higher operating leverage?   

A. Gable, Inc.

 

B. Harlowe, Inc.

 

C. Operating leverage is the same for both companies

 

D. Cannot be determined

 

 

67.The following information is for Gable, Inc. and Harlowe, Inc. for the recent year.  What total amount of net income will Harlowe, Inc. earn if it experiences a 10 percent increase in revenue?   

A. $180, 000

 

B. $80,000

 

C. $260,000

 

D. $20,000

 

 

68.  Based on the above information, select the correct statement.   

A. Cost of goods sold is a mixed cost.

 

B. Salary cost is a mixed cost.

 

C. Depreciation cost is a variable cost.

 

D. If the company sells 20 units for $540 each, it will incur a loss of $200.

 

 

69.Select the incorrect statement regarding fixed and variable costs.   

A. Fixed cost per unit remains constant as the number of units increases.

 

B. Total variable cost is represented by a straight line sloping upward from the origin when total variable cost is graphed versus number of units.

 

C. The concept of relevant range applies to both fixed costs and variable costs.

 

D. The terms “fixed” and “variable” refer to the behavior of total cost.

 

 

70.The following information is for Companies M and N for the most recent year:  Based on this information, select the incorrect statement   

A. M’s magnitude of operating leverage was lower than N’s.

 

B. N would suffer more than M from an equal drop in sales revenue.

 

C. M’s cost structure carries greater risk and greater potential for profit.

 

D. If N’s sales increased by 20%, its net income would increase by 40%.