COSTS CAN BE CLASSIFIED INTO TWO CATEGORIES FIXED AND VARIABLE COSTS THESE COST BEHAVE DIFFERENTLY BASED ON THE LEVEL OF VOLUME SUPPOSE WE ARE RUNNING A RESTAURANT AND HAVE IDENTIFIED CERTAIN COST ALONG WITH THE NUMBER OF ANNUAL UNIT SOLD OF 1000 TOTAL COST OF RAW MATERIAL TOTAL ANNUAL COST 650 IF WE INCREASE OUR SALE VOLUME TO 6000 UNITS AND THEN TO 8000 UNIT THE FOLLOWING YEAR AND ARE STILL WITHIN THE RELEVANT RANGE WHAT WOULD BE THE TOTAL ANNUAL COST AND UNIT COST OF FIXED AND VARIABLE
Oh, my! You need an English course more than an accounting class.
Your post is nearly impossible to read because:
1. It's in all caps.
2. You've used NO punctuation.
3. The reader can't tell where sentences begin and end.
not even sure there's a question in there.
Fixed cost per unit goes down with each increase in production (as long as fixed costs remain fixed and don't increase at all).
Cost per unit remains the same.
Seriously, consider English classes.
Question 1 of 20 5.0 Points
In comparing management accounting with financial accounting, which of the following statements is FALSE?
A. Management accounting is primarily used by managers, employees, and supply chain partners.
B. The report format for financial accounting is based on generally accepted accounting principles.
C. The purpose of management accounting reports is to provide information for planning, control, performance measurement, and decision making.
D. Financial accounting reports are prepared as needed.
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My choice is D
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Question 2 of 20 5.0 Points
The unit of measurement used in management accounting is:
A. primarily the future dollar.
B. monetary at historical and current market values.
C. monetary at historical or current market or projected values.
D. the measurement unit used by competing companies.
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My choice is C
Question 3 of 20 5.0 Points
When preparing a report, it is sometimes necessary to sacrifice accuracy for:
A. timeliness.
B. personal feelings.
C. profits.
D. expectations.
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My choice is A
Question 4 of 20 5.0 Points
Primary processes:
A. apply only to a just-in-time environment.
B. include information systems and human resources.
C. add value to a product or service.
D. limit bottlenecks during production.
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Question 5 of 20 5.0 Points
Primary processes are comprised of:accounting.
A. marketing, legal, and accounting services.
B. research and development, marketing, supply, design, production, distribution, and information systems.
C. research and development, design, supply, production, marketing, distribution, and customer service.
D. human resources, legal services, information systems, and management
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Question 6 of 20 5.0 Points
An advantage of value chain analysis is that it allows a company to:
A. evaluate ethical conduct.
B. focus on its core competencies.
C. use the four "w's."
D. increase sales to customers.
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Question 7 of 20 5.0 Points
The just-in-time philosophy emphasizes:
A. completing products on schedule.
B. increasing production.
C. finishing all products before starting new ones.
D. eliminating waste.
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My choice is D
Question 8 of 20 5.0 Points
Activity-based management's primary goal is to reduce:
A. nonvalue-adding costs.
B. defects.
C. inventory size.
D. machine setup time.
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Question 9 of 20 5.0 Points
The balanced scorecard:
A. is rarely used.
B. produces formal reports.
C. only applies to manufacturing companies.
D. links the organization's perspectives with stakeholders.
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Question 10 of 20 5.0 Points
If a management accountant confides to a relative that his or her company has a confidential plan to merge with another company in the near future, the accountant has:
A. not violated ethical standards.
B. violated ethical standards only if the relative owns stock in the company.
C. violated ethical standards because the accountant and relative could stand to gain personally from that information.
D. not violated ethical standards because the information was relayed to a family member.
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My choice is
Question 11 of 20 5.0 Points
An example of a period cost is:
A. advertising costs.
B. indirect materials.
C. product design costs.
D. direct materials.
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Question 12 of 20 5.0 Points
Which of the following is a value-adding cost?
A. Depreciation on personnel department equipment
B. Depreciation on factory equipment
C. Depreciation on office equipment
D. Depreciation on sales department equipment
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Question 13 of 20 5.0 Points
All manufacturing costs incurred and assigned to products that are being produced are classified as:
A. variable costs.
B. allocated costs.
C. product costs.
D. overhead costs.
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Question 14 of 20 5.0 Points
Which of the following is the formula used to compute a product's unit cost?
A. (Direct Materials + Direct Labor) / Number of Units Produced
B. (Direct Materials + Direct Labor + Overhead) / Number of Units Produced
C. (Direct Labor + Overhead) / Number of Units Produced
D. (Indirect Materials + Indirect Labor + Overhead) / Number of Units Produced
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Question 15 of 20 5.0 Points
In a manufacturing environment, direct labor costs initially flow:
A. into the Materials Inventory account.
B. directly to Cost of Goods Sold.
C. into the Work in Process Inventory account.
D. into the Finished Goods Inventory account.
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Question 16 of 20 5.0 Points
Cost of goods manufactured is equal to:
A. Direct Materials + Direct Labor + Overhead.
B. Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory.
C. Beginning Work in Process Inventory + Period Costs - Ending Work in Process Inventory.
D. Beginning Work in Process Inventory + Product Costs.
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Question 17 of 20 5.0 Points
To reconcile total manufacturing costs with the total cost of goods manufactured during the period:
A. subtract out all period costs from total manufacturing costs to arrive at cost of goods manufactured.
B. add beginning and subtract ending finished goods inventory to total manufacturing costs.
C. you must know how many goods were sold during the period.
D. add beginning and subtract ending work in process inventory to total manufacturing costs.
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Question 18 of 20 5.0 Points
If the estimated cost driver level is overstated, the: predetermined overhead rate will be understated.
A. predetermined overhead rate will be overstated.
B. product cost will be overstated.
C. cost pool will be understated.
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Question 19 of 20 5.0 Points
The activity base that would be most appropriate in a capital-intensive industry is:
A. direct labor dollars.
B. direct labor hours.
C. sales volume.
D. machine hours.
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Question 20 of 20 5.0 Points
In an activity-based costing system, the first step in assigning costs is to:
A. accumulate costs for each activity.
B. identify the appropriate activities for each function.
C. separate nonvalue-adding activities from value-adding activities.
D. analyze all nonvalue-adding activities to determine if they are necessary support areas.
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Can you please assist in reviewing my choices?
The representation for fixed cost per unit of activity is:
To determine the total annual cost and unit cost of fixed and variable costs, you need to understand how these costs behave based on the level of volume.
Fixed costs: These costs do not change with the level of volume and remain constant within a certain range. Examples of fixed costs in a restaurant can include rent, insurance, and salaries of staff members who are paid a fixed amount regardless of sales.
Variable costs: These costs vary directly with the level of volume. As the number of units sold increases, the variable costs also increase. Examples of variable costs in a restaurant can include the cost of raw materials, wages of staff members paid by the hour, and electricity consumption.
In the given scenario, the total cost of raw materials is provided as $650 for an annual unit sold of 1000. However, we need to determine the total annual cost and unit cost of fixed and variable costs for sales volumes of 6000 units and 8000 units.
1. Calculate the variable cost per unit:
- Variable cost per unit = Total cost of raw materials / Annual units sold
- Variable cost per unit = $650 / 1000 = $0.65 per unit
2. Calculate the total variable cost:
- Total variable cost = Variable cost per unit * Annual units sold
- Total variable cost for 6000 units = $0.65 * 6000 = $3900
- Total variable cost for 8000 units = $0.65 * 8000 = $5200
3. Determine the fixed cost:
- Fixed cost = Total annual cost - Total variable cost
- Fixed cost for 1000 units = $650 - $650 = $0
- Fixed cost for 6000 units = Total annual cost - Total variable cost for 6000 units
- Fixed cost for 8000 units = Total annual cost - Total variable cost for 8000 units
4. Determine the total annual cost:
- Total annual cost = Fixed cost + Total variable cost
- Total annual cost for 1000 units = $0 + $650 = $650
- Total annual cost for 6000 units = $X + $3900 = $Y (replace X and Y with the calculations from step 3)
- Total annual cost for 8000 units = $X + $5200 = $Z (replace X and Z with the calculations from step 3)
By calculating the fixed and variable costs based on the given data and applying the appropriate formulas, you can determine the total annual cost and unit cost of fixed and variable costs for different sales volumes within the relevant range.