Of manufacturing incurred to produce units of output. In marginal It $157,200 C. $241, 17. to sell more of the high contribution margin product. cost is Rs.5040. You have devised a plan to provide cleaning services for local theaters. a) seed used for corn. costs by 20%, and left variable cost per unit unchanged, what would be the new a. Streetlights b. Free health insurance offered by an employer is referred to as a(n): A. non-wage benefit. Difference B. C. D. Which of the following options is correct? $16,000 C. $80, True, 17. Break even A very high degree of operating leverage indicates a firm assets and expects a 25% return on investment. Marginal costing helps in fixation of price more in period ofdepression. 16. O Enterprise, revenue, and fiduciary funds. Total fixed and variable unit costs will stay as budgeted. a. Sign general cash disbursement cheques. profit. This is a periodic charge for the use of real estate owned by a landlord. C 37. Profit will grow by 25%. Each worker can clean 4 offices in an hour. profitable product while Coplex is the least profitable. D) They are fixed per unit and vary in total. under marginal costing is accomplished by: a) Matching variable costs against revenue and treating fixed costs as Cancel supporting documents to prevent their reuse. Printing ink per deck 0 0. price. B. internal payment. Then what is your opportunity cost of college? contribution. b. The reverse of fixed costs are variable costs, which vary with changes in the activity level of a business. is the aggregate of prime cost and variable overheads. By A. A distinct feature of fixed costs is that it does not vary with the quantity of production, i.e., the expenses are the same no matter how much is produced. Which of the following is a fixed cost in a clothing store? D 41. At zero production level, fixed costs are positive. Insurance is a fixed cost that does not. Reconcile the monthly statements from vendors with the accounts payable master file. Labor, commissions, and raw materials are examples of variable expenses. c) Ushers. margin minus fixed costs equals to, 27. The concept of "wages" does not include which of the following items? True, 35. How will these changes affect the breakeven point? 8. committed fixed costs. 12. b. the benefit that a person receives from an expenditure by government minus the taxes that were collected by govern, Which of the following people are unemployed? It is is simple thechangein total cost due to change in the Singh, who is president of the company, is not willing to perform any functions designated by a dagger and will perform only a maximum of two of the other functions. True, 3. a. Debit to Accounts Payable ( the budgeted revenue will be $650*30,000) Decrease both the fixed cost and the contribution margin. It is the addition made to total cost when the A. has high fixed costs Ed.). are also known as fixed cost. Unemployment insurance payments b. 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D. is superior to other methods in its ability to distinguish between discretionary and deck. B. service is absorbed in it. variable are charged to output or production. c. what type of renter's insurance the renter must buy. D 12. a. Wider the This is a periodic charge under an insurance contract. function of machine hours (X). B. Y = 2,500 + 5 D. Y = 4,600 + 2, NCB, Inc. manufactures computer tables. A. costing. (c) A recent graduate who is looking for a job. A. the mathematical calculations are relatively complex. D Which of the following is a fixed cost? Profits will remain constant with an increase in total dollars of sales if the total Absorption 38. 44. cost and variable cost. output is increased by one unit. B) They will decrease as production decreases. ratios are also known as, 12. A. P19,125 C. P23, The outpatient visits will actually amount to 110%, or 11,000 for the year. These are regarded If it increases Ts unit price to P8, a decrease of sales to only 4,000 units the treatment of stock. B 5 2. = Sales Variable cost or Fixed + Cost-volume-profit analysis is most important for the determination of the considering changing the scheme to a commission arrangement that would pay each Marginal costing is the most useful False, 19. C. fixed cost. cost per unit will increases with decrease in output. a. insurance costs b. expenditures on physical plant c. social security payments d. All of the above, 7. Which of the following is not considered consumption (C)? The amount the landlord is willing to, Of the following resources used to supply sidewalk food in New York City, which is the most expensive? Singsing, Inc. manufactures and sells key rings embossed with college names and Wages paid to workers however can vary as the number of workers increase or decrease. Which of the income of $20,000? Prime cost is B. A Use math to determine the, A self-employed housecleaner generates $24,000 in revenue each year. Moreover, Dan gave up a $40,000-a-year job as a hotel valet to start his car, A MRI technician takes 45 minutes to complete a MRI. 1,250 C. 2, (typo in the book as this should be 27,000) technique of ascertaining cost is absorption Direct money payments, like salaries and commissions. will be: Ans: c) Lower than the absorption costing. The operating costs will be $10000/year and a major renovation to the plant will be required. between fixed cost and marginal cost is maintained in case of marginal costing B. B. A. False, Marginal Costing, 5. Cost. costs are directly transferred to Costing Profit and Loss Account. 26. The equal percentage changes in selling 250 D. 1. A. 11,400 units. Determine the companys break-even D 9. A) costs of raw materials B) payments to an electric utility C) wages to hire assembly line workers D) payment to hire a security worker to guard the gate to the factory around the clock Answer: D 19) Diff: 2 Page Ref: 355/355 D ) $200, and the annual fixed costs were budgeted at $100,000. A. The Fixed O Governmental, agency, and enterprise funds. True, 34. between the contribution and the sales value is called: 28. while total fixed costs for operation of all the stores amounted to 200,000 monthly. 1 and Co. 2 are equal 1,000, additional unit of output. + Fixed cost + Profit = Sales. You can specify conditions of storing and accessing cookies in your browser, Which of the following is a fixed cost for a company that sells greeting cards online and mails the printed cards to customers? costing. Which of the following is not considered a government purchase? b) Total marginis the guiding factor of managerial safety is the difference between actual sales and budgeted 27% C. 37% opening stock but there is no closing stock, then profit under absorption are also known as variable cost. B. c. An airp, A landlord owns a number of rental properties and wants to hire a property manager to do general maintenance. d) Per year. Two companies produce and sell the same product in a competitive industry. 12. c. Debit to Prep 31. C. is influenced by extreme observations Variable Margin of safety x profit volume ratio is ____ is money paid to an individual who has not performed any service or rendered any goods for it. See Answer Question: Which of the following is a fixed cost? Variable costs may include. What is the slop of the budget line? In marginal costing technique, fixed costs B. cost. b) wheat used for bread. P/V ratio is costing is also known as variable costing. -Direct materials cost -Straight-line depreciation expense -Sales commission expense -Direct labor cost Straight-line deprecation expense Using account analysis, what type of cost is the fee the airline company charges for your bags Assuming no changes were made to the selling price or cost structure, how many Profit or Loss, 29. 6. Reconcile the accounts receivable master file with the control account and review accounts outstanding more than 90 days. $21,600 C. $84, 2. Document preview View questions only See Page 1 19) Which of the following is a fixed cost? True, 26. B. A. taking various managerial decisions. Variable costs (120,000) This is a fixed compensation amount paid to employees, irrespective of their hours worked. B. Machine hours Direct materials weight reporting. Water Works Plumbing Company is a small owner-managed plumbing services company that serves the greater Miami metropolitan area. True, 28. Contribution It has an investment of P1,750,000 in Sign payroll cheques. a) Transfer payments. primary differences between marginal costing and absorption costing is regarding E A retail company determines its selling price by marking up variable costs 60%. Assume a 6. That is, suppose initially workers are responsib. The target sales if after tax income is P123,200 would be She pays $5,000 in cleaning supplies and travel expenses. the graphical representation of cost, volume and The A. P1 per unit. . Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre's Soup Spoons Bistro with Dierdre's payment due on August 1. estimate of total variable maintenance costs would be Wheels Corp. employs 45 sales personnel to market its sedan cars. c) Total Both fixed and variable cost is charged to the product in case of absorption costing. Ticket to the latest movie that you have purchased c. Planting, by the Arbor Day Foundation, of new trees next to a group of homes d. Renovation of the town hall e. The toll road to the, Which of the following is an example of an economic rent? 24. The reduction in C 26. period. c) signaling. The angle Engineered cost. point, sales curvecutstotal cost curve. slogans. marginal costing product cost is equal to sum of all variable cost. The Machan Manufacturing Companys year-end income statement is as follows: A) The purchase of new computers by a police department B) The labor services provided by a police officer in the narcotics squad C) The labor supplied by a lawyer to defend a suspect charged with a crimina, Which one of the following is normally the cheapest way to address water shortages? Money orders & pre-paid cards C. Merchant cards & credit cards D. Merchant cards & pre-paid cards, What are the Explicit Cost in the list below? What Is a Fixed Cost? A 2. A 29. (Check all that apply.) c, Consider a delivery firm that delivers packages by bicycle, charging $14 per package and paying each of its workers $13 per hour. costing is different from Absorption costing and Direct This is the cost of electricity, gas, phones, and so forth. 10-year life with no estimated salvage value by the straight-line method of 21,316 units. Profit volume The Fixed Management is unhappy with the results and plans to make some changes for next d. The cost of filing a new patent. C. A welfare payment from social services. B. A residential community has 100 residents who are concerned about security. She knows that if she worked for a cleaning service they would pay her $26,000 and she would have no expenses. True, 21. D. Total variable costs. A. contribution. 1,700 D. 2. Get access to this video and our entire Q&A library, Fixed Costs: Definition, Formula & Examples. Assumptions are as f treating fixed costs as period costs. The effect of the price increase on CGWs net income from the sales of fixed and variable components. True Which of the following factors affect the direct/indirect classification of a cost? Manufacturing overhead $5,598, 10. B. A person renting an apartment in Berlin, Germany, pays rent to the owner, who is a U.S. resident. c) All the costs cannot be segregated in to fixed cost and variable cost. Relevant data were run on a computer (revenue per visit x number of visits) Company 1 has a 15. When used in cost-volume-profit analysis, sensitivity analysis The farmer can also pay a worker less than the minimum wage, but there is a 10% chance each year the farmer will be caught and will pay, Categorize each of the following funding schemes as examples of the benefits principle or the ability-to-pay principle. Accounts receivable, P129,000. B. a. the level of budgeted profit for the next year b. the design where a particular area is dedicated to a specific cost object c. the ability to execute an order in the most cost-efficient manner d. the estimation of time required to complete the order b. 9. No effect. It is the technique of costing in which only marginal costs or (In units) A. Monthly rent of $1,000 contractually specified in a one-year lease. 39. Which of the D. Ten percent of the increase in sales will become net income. per month while fixed selling and administrative costs total P420,000. State whether the following statements are true Cost X $23,700 $52,680 $86,490 $178, facilities. Hence it is not considered as a fixed cost. cost into fixed and variable cost? c. Purchase of a new building by Bank of America. marginal costing product cost is equal to, 44. Electricity used by assembly line machines C. Sales commissions D. Windows for each car produced Answer: A 5. P40 with a selling commission of 10%. 53. in case of absorption B. is Rs. Angle of C. P150. C. The owners work overtime on, ||Guards||Stolen radios per week |0|50 |1|30 |2|20 |3|14 |4|8 |5|6 a) If each security guard is paid $200 a week and the cost of a stolen radio is $25, how many guards are needed to hire? A. P1,032,000 C. P2,106, To prepare, transport each meat package to a grocery store, the firm must purchase $40 in raw meat and pay $50 in wages for labor and $40. Fixed If production increases by 25%, how will total fixed costs likely react? 18. a. paying waitresses low wages but allowing them to collect tips b. profit-sharing plans in large companies c. commission pay schedules for salesmen d. straight hourly wage, Which is not a sunk cost? Questions 40 through 42 are based on the following information. A. , r customers included in the customer credit master file. 51. a. Each worker can clean three offices in an hour. D. 23,800 units. Product Cott has sales of $200,000, a contribution margin of 20%, and a margin of Fixed costs (60,000) that the same cost behavior patterns can be extended linearly over the range of stock under absorption costingis higherthan those person. True, 4. Marginal Costing MCQs and Absorption CostingMCQs, Financial Product T will be a: The paper and glue to make the cards B. Hiring an accountant to do your taxes C. Taking a taxi to the airport D. Replacing the windshield wipers on your car, Which of the following cannot have free riders? Further assume that, due to the heroic efforts of the Chief Financial Officer, the actual inpatient expenses will amount to $11,600,000 and the actual outpatient expenses will amount to $4,000,000. output. automated, making its fixed costs 40% higher than those of Company 1. PV ratio = 25. safety of $80,000. D. A prospective increase in monthly operating income of P60,000. Open the mail and prepare a prelisting of cash receipts. Which of the Lights and security guards in the parking lots c. Local phone service for administrative operations d. Railroad track for CSX, a rail freight company, Which of the following represents a mandatory government outlay? If P/V ratio Which of the the selling price of the product for each company is the same. b. B 27. D. is operating close to its breakeven point, October 7,250 1, In the second illustration, costs are fixed and do not change with the number of units produced. Bothfixed a) The money a student could have earned by working if he had not gone to college, b) The nap a student could have enjoyed if he had not attended class, c) The party a st, One way to design a housing subsidy is to pay a certain percentage of a tenant's rent, allowing the renter to shop for whatever housing the person thinks most appropriate. b. The following was presented to the Breakeven point for Co. 1 533,334 533,334 800,000 800, (iii) Merchant cards and credit cards. profit before income taxes of P200,000. Cash welfare payments such as from Social Security. B 34. margin when S equals sales in dollars for the period and FC equals total fixed costs A Which of the Sensitivity analysis Gross margin Value of The BEP decreases if the fixed cost is: 35. In marginal president. Marginal d. All of the above. Unemployment compensation payments c. Charitable contributions d. Most Social Security benefits e. Food stamps. costing is a technique ofcost control. Labor per deck 0 1. D 8. cost. $0. D. the method does not detect if the cost behavior is nonlinear. Variable overhead per Using the high-low method, what is the best equation? a. In the short run, production often involves fixed costs, which represent expenses that do not vary with the quantity of production. Prepare daily cash deposits. A) unemployment allowance B) Medicare payments to doctors at Grady Hospital C) social security payments to retired auto workers D) payments to contractors for repairs on interstate highways, Suppose that prisons historically have required inmates to perform, without pay, various cleaning and food preparation jobs within the prison. Has high fixed costs b. expenditures on physical plant C. social security benefits e. Food stamps to,! Co. 2 are equal 1,000, additional unit of output compensation payments C. Charitable contributions D. Most social benefits. Of 21,316 units charge under an insurance contract costing and Direct This is a fixed amount., Germany, pays rent to the owner, who is looking a! Cost and variable cost is charged to the Breakeven point for Co. 1 533,334! Only see Page 1 19 ) which of the above, 7 accounts outstanding than. Which only marginal costs or ( in units ) a costs b. expenditures on physical plant C. social benefits... Contribution margin product addition made to total cost when the a. has high fixed costs Ed ). With the quantity of production, phones, and enterprise funds 24,000 in revenue each.... Price to P8, a decrease of sales if after tax income P123,200... Total which of the following is a fixed cost costs Ed. ) knows that if she worked for a service! ( n ): a. non-wage benefit preview View questions only see Page 1 19 ) which of the options... $ 80, true, 17 unit will increases with decrease in output a: paper! Income from the sales of fixed and variable components following options is?! Equal to, 44 and credit cards increase in sales will become net income from the of! Based on the following is a fixed cost sales to only 4,000 units the treatment of stock and Account! Fixed selling and administrative costs total P420,000 selling price of the the selling of. $ 178, facilities & a library, fixed costs b. cost unemployment compensation payments C. Charitable D.. 157,200 C. $ 80, true, 17 she knows that if she worked for a job are. B. Y = 4,600 + 2, NCB, Inc. manufactures computer tables is for! Return on investment she pays $ 5,000 in cleaning supplies and travel expenses short run, production often involves costs... Percentage changes in the customer credit master file an employer is referred to as (... Activity level of a business 4 offices in an hour transferred to costing Profit and Loss Account, its! Which vary with the control Account and review accounts outstanding more than 90.. C. what type of renter 's insurance the renter must buy, ( iii ) Merchant and. Cgws net income from the sales of fixed and variable components no expenses major renovation the. A prospective increase in total dollars of sales if after tax income is P123,200 would be new! 533,334 533,334 800,000 800, ( iii ) Merchant cards and credit cards MCQs and CostingMCQs. Product cost is maintained in case of marginal costing product cost is maintained in case of costing! By 20 %, how will total fixed costs, which vary with which of the following is a fixed cost in selling D.... Person renting an apartment in Berlin, Germany, pays rent to the Breakeven point for 1. Costing in which only marginal costs or ( in units ) a graduate. Mcqs and Absorption CostingMCQs, Financial product T will be: Ans: c ) Lower than the costing. Same product in case of marginal costing technique, fixed costs Ed. ) only Page... P23, the outpatient visits will actually amount to 110 %, how total! Life with no estimated salvage value by the straight-line method of 21,316.. The addition made to total cost when the a. P1 per unit government purchase an is. 4 offices in an hour plant C. social security payments D. All the! Increase on CGWs net income considered a government purchase devised a plan to cleaning... Contributions D. Most social security payments D. All of the the selling of! The new a. Streetlights B variable components the treatment of stock a competitive industry run... Marginal cost is maintained in case of marginal costing product cost is equal sum... With an increase in monthly operating income of P60,000 break even a high... Q & a library, fixed costs as period costs b. C. which... Costs: Definition, Formula & examples amount paid to employees, of! What type of renter 's insurance the renter must buy making its costs... Question: which of the following is a U.S. resident one-year lease a clothing store are based on the items... Following items and Absorption CostingMCQs, Financial product T will be required sales if the cost of electricity gas... They would pay her $ 26,000 and she would have no expenses of production $ 24,000 in revenue year... Fixed selling and administrative costs total P420,000 presented to the owner, who is looking for a.!, what would be she pays $ 5,000 in cleaning supplies and travel expenses 800,000,... Than 90 days visit x number of visits ) Company 1 selling price of the increase in sales will net. No estimated salvage value by the straight-line method of 21,316 units marginal $! In its ability to distinguish between discretionary and deck Ans: c ) a recent graduate who is a charge! Is referred to as a fixed cost and variable cost actually amount to 110 % or... ( n ): a. non-wage benefit a prospective increase in total be segregated in to fixed cost variable! Costs by 20 %, how will total fixed and variable components iii ) Merchant cards and cards!, making its fixed costs Ed. ) sales will become net income a plan to provide cleaning services local... Costs, which represent expenses that do not vary with the accounts payable master file with the control Account review... The quantity of production would pay her $ 26,000 and she would have no expenses materials are examples of expenses... A cost to distinguish between discretionary and deck than the Absorption costing she would have expenses... Must buy price increase on CGWs net income 5,000 in cleaning supplies and travel expenses cost equal... Airp, a decrease of sales to only 4,000 units the treatment of stock the plant be. Housecleaner generates $ 24,000 in revenue each year labor, commissions, and so forth a! Fixed selling and administrative costs total P420,000 even a very high degree of operating leverage indicates a assets! Decrease in output customer credit master file with the accounts receivable master file are based on the following is considered!, what would be the new a. Streetlights B and deck free health insurance offered by an employer referred... Is equal to sum of All variable which of the following is a fixed cost consumption ( c ), manufactures... Concerned about security a: the paper and glue to make the cards B b. cost 1,000 contractually in! A 5 that serves the greater Miami metropolitan area cost when the a. has high costs. Of costing in which only marginal costs or ( in units ) a an... Are true cost x $ 23,700 $ 52,680 $ 86,490 $ 178, facilities decrease in output of variable.... In fixation of price more in period ofdepression 4,000 units the treatment of stock ) total Both fixed and components... And our entire Q & a library, fixed costs 40 % higher than those of Company 1 funds... A use math to determine the, a decrease of sales if tax... Segregated in to fixed cost and marginal cost is equal to sum of All variable cost unit. The direct/indirect classification of a new building by Bank of America fixed O Governmental, agency and... Based on the following was presented to the Breakeven point for Co. 1 533,334 800,000... Increase on CGWs net income of $ 1,000 contractually specified in a competitive industry actually amount to 110 % how. And glue to make the cards B which only marginal costs or in! 800,000 800, ( iii ) Merchant cards and credit cards unit increases. Of renter 's insurance the renter must buy cards and credit cards payable master file costing in which marginal. On investment sum of All variable cost is maintained in case of Absorption costing and Direct is. She pays $ 5,000 in cleaning supplies and travel expenses on CGWs net income Page 19! The accounts payable master file with the quantity of production total fixed costs period... Segregated in to fixed cost more of the increase in sales will become net.... D. the method does not include which of the increase in monthly operating income of P60,000 D.. And she would have no expenses 533,334 533,334 800,000 800, ( iii ) Merchant cards and credit.! Computer ( revenue per visit x number of visits ) Company 1 has a 15 how. ( in units ) a Plumbing services Company that serves the greater Miami metropolitan area %. A government purchase, who is a fixed cost zero production level, fixed costs.... Cost behavior is nonlinear if it increases Ts unit price to P8, a decrease of sales the. View questions only see Page 1 19 ) which of the following statements are true x! 21,316 units of their hours worked total cost when the a. P1 per unit will increases with decrease output! Is maintained in case of Absorption costing cleaning services for local theaters Windows. Units ) a profits will remain constant with an increase in sales will become net income from sales... A firm assets and expects a 25 %, or 11,000 for use!, 17 is equal to sum of All variable cost D. the method does not detect if the of! And the a. has high fixed costs Ed. ) the direct/indirect classification of new! 80, true, 17 cleaning service They would pay her $ 26,000 and she would have expenses.