In July, Edmonds Resort Company incurred $62,400 of food service costs and served

Question 2

In July, Edmonds Resort Company incurred $62,400 of food service costs and served 12,000 meals.

In December, when 8,000 meals were served, the food service cost was $49,600.

Based on this limited data estimate for the cost of food service:

A. the variable cost per unit

B. the fixed cost per month

Show your final answer on the top line next to the letter. Show your calculations directly below the answer

_________________________________________________________________________________

4 points

Question 3

The following information is available for maintenance costs for the first 6 months of the year.

	Maintenance costs	Machine hours
January	$ 5,200	2,900
February	$ 11,200	5,400
March	$ 10,960	6,100
April	$ 7,040	3,500
May	$ 7,220	3,100
June	$ 8,900	4,700

Use the high low method to find the variable cost per machine hour based on this information. Note that you are choosing a high point and a low point for this cost function (you cannot mix and match the x and y's that determine a point. Think about whether you should choose the high or low based on activity or cost.

Round your answer to the nearest penny.

	a.	1.80 per Machine hour
	b.	.56 per Machine hour
	c.	.42 per Machine hour
	d.	1.20 per Machine hour
	e.	2.40 per Machine hour

3 points

Question 4

Use this data for the questions in this section.

Reddy Company has the following cost formulas for monthly overhead:

1. Indirect materials: $2,000 plus $0.40 per machine hour

2. Maintenance: $1,500 plus $0.60 per machine hour

3. Machine setup: $0.30 per machine hour

4. Utilities: $200 plus $0.10 per machine hour

5. Depreciation: $800

Match each cost title to the cost behavior category that fits it (according to the description).

Choose from: Variable, Fixed or Mixed

- A. B. C. Indirect materials - A. B. C. Maintenance - A. B. C. Machine setup - A. B. C. Utilities - A. B. C. Depreciation

A. Variable B. Mixed C. Fixed

5 points

Question 5

Shipping costs at Colstrip Mining Company are a mixture of variable and fixed components.

The company shipped 8,000 tons of coal for $400,000 in shipping costs in February and 10,000 tons for $499,000 in March.

Assuming that this activity is within the relevant range, expected shipping costs for 11,000 tons would be:

	a.	$554,000
	b.	$422,222
	c.	$544,500
	d.	$548,900
	e.	$548,500

3 points

Question 6

The following monthly data are available for the Wyatt Company and its only product:

	Unit selling price........................................	$36
	Unit variable expenses...............................	$28
	Total fixed expenses..................................	$50,000
	Actual sales for the month of May..............	7,000 units

The margin of safety for the company (in sales dollars) during May was:
(Choose the closest answer. Margin of safety and break-even are NOT the same thing.)

	a.	$252,000
	b.	$225,000
	c.	$750
	d.	$27,000
	e.	$50,000

3 points

Question 7

The following budgeted income statement was prepared by Fullton Corporation:

	Sales (100 units at $100 a unit)		$10,000
	Cost of goods sold:
	Direct labor (variable)	$1,500
	Direct materials	1,400
	Variable factory overhead	1,000
	Fixed factory overhead	500	4,400
	Gross margin		5,600
	Selling expenses:
	Variable	600
	Fixed	1,000
	Administrative expenses:
	Variable	500
	Fixed	1,000	3,100
	Net operating income		$ 2,500

How many units would have to be sold to break even? (Choose the closest answer.)

	a.	50
	b.	58
	c.	68
	d.	75

3 points

Question 8

The following information was extracted from the accounting records of MVA Corporation.

MVA sold 20,000 items during the accounting period.

Total Sales revenue $1,200,000

Total Variable cost $400,000

Total fixed costs $480,000

How many units does MVA need to sell to have net income of $80,000?

	a.	7,000
	b.	9,333
	c.	28,000
	d.	12,000
	e.	14,000

3 points

Question 9

The following information was extracted from the accounting records of MVA Corporation. MVA sold 20,000 items during the accounting period.

Total Sales revenue $1,200,000

Total variable costs $400,000

Total fixed costs $480,000

If MVA pays $100,000 for advertising, and sales volume increases by 10%, by how much will net income change?

	a.	increase by $20,000
	b.	decrease by $20,000
	c.	increase by $120,000
	d.	decrease by $68,000
	e.	no change to net income

3 points

Question 10

The graph below is a CVP graph for Match Corp. (not intended to be to scale). If you (or your computer) are color challenged, the arrow points go in this order (clock-wise): green, dark blue, pink, brown, light blue. The graph has the revenue and total cost lines that are standard. In addition, it has lines for fixed cost, variable cost, and profit.

Match sells a single product for $70 each. Variable costs for the product are $40 each. Match's fixed costs are $60,000 per month.

Compute the slope for each line based on the data for Match Corp. above and your general knowledge of what each line in the graph represents.

Hint: each answer will be a number (no decimals, commas, etc.) and you can use the same number twice, if needed. Only enter the slope, nothing else.

slope of green line Blank 1

slope of dark blue line Blank 2

slope of pink line Blank 3

slope of brown line Blank 4

slope of light blue line Blank 5

3 points

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