Question 1

The Maple Company has total fixed costs of $400,000.It also has $200,000 in total variable costs.These costs exist at a production level of 100,000 units.The fixed cost per unit is
A)$2.00.
B)$6.00.
C)$1.50.
D)$4.00.

Accepted Answer

D)$500,000 / 100,000 = $5.00

Question 2

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?
A)$3.00
B)$49.00
C)$245.00
D)$52.00

Accepted Answer

B)
Total cost = $52 × 5,000 = $260,000
Variable cost = $260,000 - 15,000 = $245,000
$245,000 divided by 5,000 = $49.00

Question 3

Doggie Pals produces 100,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths.Total manufacturing costs are $200,000.Of this amount,$150,000 are variable costs.What are the total production costs when 125,000 collars are produced? (Assume both production levels are in the same relevant range. )
A)$387,500
B)$250,000
C)$237,500
D)$187,500

Accepted Answer

C)
v = $150,000/ 100,000
v = $1.50
then
f = $200,000 - 150,000
f = $50,000
finally
y = vx + f
y = $1.50 (125,000)+ $50,000
y = $237,500

Question 4

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,her forecast for 8,500 bats will be
A)$10,000.
B)$75,000.
C)$85,000.
D)$82,000.

Accepted Answer

D)
Total Cost = $10 × 7,500 = $75,000
$75,000 = Variable cost per unit (7,500 )+ $22,500
$7.00 = Variable cost per unit
then
Y = $7.00 (8,500)+ $5,500
y = $82,000

Question 5

Mario Company has total fixed costs of $600,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The fixed cost per unit at a production level of 300,000 units is
A)$1.75.
B)$2.00.
C)$2.04.
D)$3.50.

Accepted Answer

B)$600,000 / 300,000 = $2.00

Question 6

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the total costs are fixed,what is the variable cost of producing each bat?
A)$10.00
B)$52,500
C)$7.00
D)$3.00

Accepted Answer

C)
Total cost = $10 × 7,500 = $75,000
$75,000 = Variable cost per unit (7,500 )+ $22,500
$7.00 = Variable cost per unit

Question 7

George Company has a relevant range of 150,000 units to 400,000 units.The company has total fixed costs of $525,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The variable cost per unit at 300,000 units is
A)$3.00.
B)$0.29.
C)$0.50.
D)$3.50.

Accepted Answer

C)
$612,500 = $525,000 + vx
175,000 = vx
Then $87,500 /175,000 = $.50

Question 8

Direct Call offers a calling plan that charges $5.00 per month plus $0.02 per minute of call time.Under this plan,what is your monthly cost if you talk for a total of 200 minutes?
A)$4.00
B)$9.00
C)$(1.00)
D)$5.00

Accepted Answer

B)
Cost Equation
Y = vx + f
y = ($ .02 × 200)+ $5.00
y = $9.00

Question 9

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.Given this information,what would be the total cost of producing 7,500 baseball bats?
A)$7,510
B)$75,000
C)$10
D)$750

Accepted Answer

B)$10 × 7,500 = $75,000

Question 10

George Company has a relevant range of 150,000 units to 400,000 units.The company has total fixed costs of $525,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The variable cost per unit at 300,000 units is
A)the same as at 175,000 units.
B)greater than at 175,000 units.
C)less than at 175,000 units.
D)dependent upon fixed costs per unit.

Accepted Answer

Variable costs per unit remain constant within the relevant range, which includes both 175,000 and 300,000 units. Fixed costs are spread over the units produced but do not affect the variable cost per unit.

Question 11

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the costs are fixed,and the plant manager uses the average cost per unit to predict total costs,her forecast for 8,500 bats will be
A)$10,000.
B)$85,000.
C)$82,000.
D)$75,000.

Accepted Answer

B)
y = 8,500 × $10.00
y = $85,000

Question 12

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises average cost per anchor is $52.00.If $15,000 of the costs are fixed,and the plant manager uses the average cost per unit to predict total costs,her forecast for 6,000 anchors will be
A)$260,000.
B)$312,000.
C)$309,000.
D)$52,000.

Accepted Answer

B)$52 × 6,000 = $312,000

Question 13

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be
A)$52,000.
B)$54,000.
C)$39,600.
D)$14,400.

Accepted Answer

A)
Total Cost = $18 × 2,200 = $39,600
$39,600 = Variable cost per unit (2,000 )+ $5,500
$15.50 = Variable cost per unit
then
Y = $15.50 (3,000)+ $5,500
y = $52,000

Question 14

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.What is the total cost of producing 5,000 anchors?
A)$260,000
B)$5,052
C)$52.00
D)$96

Accepted Answer

A)$52 × 5,000 = $260,000

Question 15

Maryland Incorporated produces toys.Total manufacturing costs are $350,000 when 50,000 toys are produced.Of this amount,total variable costs are $100,000.What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels. )
A)$150,000
B)$400,000
C)$500,000
D)$525,000

Accepted Answer

B)
v = $100,000/ 50,000
v = $2
then
f = $350,000 - 100,000
f = 250,000
finally
y = vx + f
y = $3.00 (75,000)+ $250,000
y = $400,000

Question 16

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the average cost per unit to predict total costs,his forecast for 3,000 birdcages will be
A)$52,000.
B)$39,600.
C)$14,400.
D)$54,000.

Accepted Answer

D)
y = 3,000 × $18.00
y = $54,000

Question 17

Great Calls has a special plan offer this month.There is a $3.00 per month charge each month and calls anywhere in the United States are $0.04 per minute.What would the monthly cost be if you typically talk for 450 minutes per month?
A)$5.00
B)$15.00
C)$18.00
D)$21.00

Accepted Answer

D)
Cost Equation
Y = vx + f
y = ($ .04 × 450)+ $3.00
y = $21.00

Question 18

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 at a production level of 2,200 birdcages.What is the total cost of producing 2,200 birdcages?
A)$39,600
B)$18.00
C)$2,218
D)$122

Accepted Answer

A)$18 × 2,200 = $39,600

Question 19

The Maple Company has total fixed costs of $400,000.It also has $200,000 in total variable costs.These costs exist at a production level of 100,000 units.The variable cost per unit is
A)$2.00.
B)$6.00.
C)$4.00.
D)$1.50.

Accepted Answer

A)$200,000 / 100,000 = $2.00

Question 20

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the total costs are fixed,what is the variable cost of producing each birdcage?
A)$2.50
B)$34,100
C)$18.00
D)$15.50

Accepted Answer

D)
Total cost = $18 × 2,200 = $39,600
$39,600 = Variable cost per unit (2,200 )+ $5,500
$15.50 = Variable cost per unit

Quiz 6: Cost Behavior

The Maple Company has total fixed costs of $400,000.It also has $200,000 in total variable costs.These costs exist at a production level of 100,000 units.The fixed cost per unit is

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?

Mario Company has total fixed costs of $600,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The fixed cost per unit at a production level of 300,000 units is

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the total costs are fixed,what is the variable cost of producing each bat?

George Company has a relevant range of 150,000 units to 400,000 units.The company has total fixed costs of $525,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The variable cost per unit at 300,000 units is

Direct Call offers a calling plan that charges $5.00 per month plus $0.02 per minute of call time.Under this plan,what is your monthly cost if you talk for a total of 200 minutes?

The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.Given this information,what would be the total cost of producing 7,500 baseball bats?

George Company has a relevant range of 150,000 units to 400,000 units.The company has total fixed costs of $525,000.Total fixed and variable costs are $612,500 at a production level of 175,000 units.The variable cost per unit at 300,000 units is

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be

Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.What is the total cost of producing 5,000 anchors?

Maryland Incorporated produces toys.Total manufacturing costs are $350,000 when 50,000 toys are produced.Of this amount,total variable costs are $100,000.What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels. )

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the average cost per unit to predict total costs,his forecast for 3,000 birdcages will be

Great Calls has a special plan offer this month.There is a $3.00 per month charge each month and calls anywhere in the United States are $0.04 per minute.What would the monthly cost be if you typically talk for 450 minutes per month?

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 at a production level of 2,200 birdcages.What is the total cost of producing 2,200 birdcages?

The Maple Company has total fixed costs of $400,000.It also has $200,000 in total variable costs.These costs exist at a production level of 100,000 units.The variable cost per unit is

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the total costs are fixed,what is the variable cost of producing each birdcage?