Question 1

Great Calls has a special plan offer this month. There is a $6.00 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 550 minutes per month?
A)$6.00
B)$16.00
C)$22.00
D)$28.00

Accepted Answer

The monthly cost is calculated by adding the base charge of $6.00 to the cost of 550 minutes at $0.04 per minute, which is $22.00. The total is $6.00 + $22.00 = $28.00.

Question 2

In the equation y = $11.75x + $550, "x" represents
A)number of units produced.
B)total fixed costs.
C)total costs.
D)none of the above.

Accepted Answer

In the equation y = $11.75x + $550, the coefficient of "x" is $11.75, which indicates the cost per unit produced. Therefore, "x" represents the number of units produced.

Question 3

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7500 bats to be $11. If $22,900 of the total costs are fixed, what is the variable cost of producing each bat?
A)$11.00
B)$2.60
C)$7.95
D)$3.05

Accepted Answer

The answer of The Akron Slugger Company produces various types...

Question 4

Best Birdies produces ornate birdcages. The company's average cost per unit is $23 when it produces 2600 birdcages. If $5900 of the total costs are fixed, what is the variable cost of producing each birdcage?
A)$2.27
B)$53,900.00
C)$23.00
D)$20.73

Accepted Answer

We can use the formula for average cost per unit:

average cost = (total cost)/(number of units)

Plug in the given values:

$23 = (total cost)/2600

Solve for the total cost:

total cost = $23 x 2600 = $59,800

Subtract the fixed costs:

variable costs = total cost - fixed costs = $59,800 - $5,900 = $53,900

Finally, divide the variable costs by the number of units to find the variable cost per birdcage:

variable cost per birdcage = $53,900/2600 = $20.73

Therefore, the correct answer is D.

Question 5

In the equation y = $7.20x + $250,250,
A)$250,250 are the total variable costs.
B)$250,250 are the total costs.
C)$250,250 are the total fixed costs.
D)$250,250 are the total overhead costs.

Accepted Answer

$250,250 is the y-intercept in the equation, which represents the total fixed costs.

Question 6

In the equation y = $7.20x + $790, "y" represents
A)total fixed costs.
B)total costs.
C)variable costs/unit.
D)none of the above.

Accepted Answer

The equation y = $7.20x + $790 represents a linear equation where y represents the total cost and x represents the number of units. The fixed cost component in this equation is $790, and the variable cost component is $7.20 per unit. Therefore, the correct answer is B, total costs.

Question 7

The Maple Company has total fixed costs of $420,000. It also has $210,000 in total variable costs. These costs exist at a production level of 130,000 units. The fixed cost per unit is
A)$1.62
B)$4.85
C)$1.38
D)$3.23

Accepted Answer

The answer of The Maple Company has total fixed costs...

Question 8

Doggie Pals produces 110,000 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, $100,000 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)$313,636
B)$13,636
C)$213,636
D)$113,636

Accepted Answer

To find the total production costs for 125,000 collars, we need to use the formula:

Total production costs = Fixed costs + (Variable costs per unit x Number of units)

We know that the fixed costs are $100,000 and the variable costs per unit are:

Variable cost per unit = Total variable costs / Number of units
Variable cost per unit = $100,000 / 110,000
Variable cost per unit = $0.91

Now we can plug in the numbers:

Total production costs = $100,000 + ($0.91 x 125,000)
Total production costs = $100,000 + $113,636
Total production costs = $213,636

Therefore, the total production costs for 125,000 collars is $213,636. Option C is correct.

Question 9

Mario Company has total fixed costs of $570,000. Total fixed and variable costs are $622,500 at a production level of 205,000 units. The fixed cost per unit at a production level of 300,000 units is
A)$2.78
B)$1.90
C)$2.08
D)$3.04

Accepted Answer

Fixed costs remain constant regardless of the production level. Therefore, the fixed cost per unit at 300,000 units is $570,000 / 300,000 = $1.90.

Question 10

Total mixed cost is represented by which of the following equations?
A)y = vx
B)y = vx + f
C)y = f
D)y = v + f

Accepted Answer

Total mixed cost is represented by the equation y = vx + f, where y is the total cost, v is the variable cost per unit, x is the level of activity, and f is the fixed cost. This equation shows that the total cost is a combination of a fixed cost component and a variable cost component that increases with the level of activity. Choice B is the only option that includes both a variable cost component (vx) and a fixed cost component (f).

Question 11

In the equation y = $11.75x + $550, "y" represents
A)total costs.
B)total fixed costs.
C)variable costs/unit.
D)none of the above.

Accepted Answer

In the given equation, "x" is the number of units produced and "y" represents the total costs, which includes both the fixed cost ($550) and the variable cost ($11.75x) per unit produced.

Question 12

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 13

Best Birdies produces ornate birdcages. The company's average cost per unit is $22 when it produces 2700 birdcages. If $5700 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, his forecast for 3500 birdcages will be
A)$75,315
B)$77,000
C)$59,400
D)$17,600

Accepted Answer

We can use the cost equation formula to solve this problem:

Total Cost = Fixed Costs + (Average Cost per Unit x Number of Units)

We are given that the average cost per unit is $22 when 2700 birdcages are produced. Therefore, we can find the variable cost per unit:

$22 = Total Variable Costs / 2700
Total Variable Costs = $59,400

Now we can use the cost equation to find the total cost for 3500 birdcages:

Total Cost = $5700 + ($22 x 3500)
Total Cost = $75,315

Therefore, the forecast for 3500 birdcages is $75,315. Option A is the correct answer.

Question 14

In the equation y = $7.20x + $790, "x" represents
A)number of units produced.
B)total fixed costs.
C)total costs.
D)none of the above.

Accepted Answer

In this equation, "y" represents the total cost and "$7.20x" represents the variable cost of producing "x" units. Therefore, "x" represents the number of units produced.

Question 15

The Maple Company has total fixed costs of $420,000. It also has $220,000 in total variable costs. These costs exist at a production level of 110,000 units. The variable cost per unit is
A)$2.00
B)$5.82
C)$3.82
D)$1.41

Accepted Answer

The variable cost per unit is calculated by dividing the total variable costs by the number of units produced. So, $220,000 / 110,000 units = $2.00 per unit.

Question 16

In the equation y = $11.75x + $550,
A)$550 are the total step costs.
B)$550 are the total overhead costs.
C)$550 are the total variable costs.
D)$550 are the total fixed costs.

Accepted Answer

In the equation y = $11.75x + $550, the $550 represents the y-intercept, which is the vertical intercept of the line and represents the fixed cost component. Therefore, option D is correct as it states that $550 are the total fixed costs.

Question 17

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7600 bats to be $13. Given this information, what would be the total cost of producing 7600 baseball bats?
A)$7613
B)$98,800
C)$13
D)$988

Accepted Answer

The total cost of producing 7600 baseball bats can be calculated by multiplying the average cost per unit ($13) by the production level (7600 bats): $13 x 7600 = $98,800. Therefore, the correct answer is B. Choice A is incorrect because it only includes the average cost per unit, not the total cost. Choice C is incorrect because it only gives the average cost per unit, not the total cost. Choice D is incorrect because it only gives a portion of the total cost.

Question 18

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7800 bats to be $14. If $22,700 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 9000 bats will be (Round any intermediary calculations to the nearest cent.)
A)$16,800
B)$109,200
C)$126,000
D)$122,510

Accepted Answer

First, find the variable cost per unit by subtracting the fixed cost from the total cost and dividing by the number of units. Total cost for 7800 bats = 7800 * $14 = $109,200. Variable cost = ($109,200 - $22,700) / 7800 = $11.10 per bat. For 9000 bats, total cost = Fixed cost + (Variable cost per unit * Number of units) = $22,700 + ($11.10 * 9000) = $22,700 + $99,900 = $122,600.

Question 19

Direct Call offers a calling plan that charges $10.00 per month plus $0.03 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 400 minutes?
A)$12.00
B)$22.00
C)$2.00
D)$10.00

Accepted Answer

The fixed monthly charge is $10.00.

The cost per minute is $0.03.

If you talk for 400 minutes, the cost for the call time is:

400 minutes x $0.03/minute = $12.00

So the total monthly cost will be:

$10.00 (fixed charge) + $12.00 (call time charge) = $22.00

Therefore, the best choice would be (B) $22.00.

Question 20

Maryland Incorporated produces toys. Total manufacturing costs are $360,000 when 50,000 toys are produced. Of this amount, total variable costs are $140,000. What are the total production costs when 85,000 toys are produced? (Assume the same relevant range for both production levels.)
A)$238,000
B)$458,000
C)$598,000
D)$612,000

Accepted Answer

First, calculate the fixed costs by subtracting total variable costs from total manufacturing costs at the initial production level: $360,000 - $140,000 = $220,000. These fixed costs remain constant regardless of the number of units produced. Next, calculate the variable cost per unit: $140,000 / 50,000 units = $2.80 per unit. For 85,000 toys, the total variable costs are 85,000 units * $2.80 = $238,000. Add the fixed costs to get the total production costs for 85,000 toys: $238,000 + $220,000 = $458,000.

Quiz 6: Cost Behavior

Great Calls has a special plan offer this month. There is a $6.00 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 550 minutes per month?

In the equation y = $11.75x + $550, "x" represents

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7500 bats to be $11. If $22,900 of the total costs are fixed, what is the variable cost of producing each bat?

Best Birdies produces ornate birdcages. The company's average cost per unit is $23 when it produces 2600 birdcages. If $5900 of the total costs are fixed, what is the variable cost of producing each birdcage?

In the equation y = $7.20x + $250,250,

In the equation y = $7.20x + $790, "y" represents

The Maple Company has total fixed costs of $420,000. It also has $210,000 in total variable costs. These costs exist at a production level of 130,000 units. The fixed cost per unit is

Mario Company has total fixed costs of $570,000. Total fixed and variable costs are $622,500 at a production level of 205,000 units. The fixed cost per unit at a production level of 300,000 units is

Total mixed cost is represented by which of the following equations?

In the equation y = $11.75x + $550, "y" represents

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 $22 when it produces 2700 birdcages. If $5700 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, his forecast for 3500 birdcages will be

In the equation y = $7.20x + $790, "x" represents

The Maple Company has total fixed costs of $420,000. It also has $220,000 in total variable costs. These costs exist at a production level of 110,000 units. The variable cost per unit is

In the equation y = $11.75x + $550,

The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7600 bats to be $13. Given this information, what would be the total cost of producing 7600 baseball bats?

Direct Call offers a calling plan that charges $10.00 per month plus $0.03 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 400 minutes?

Maryland Incorporated produces toys. Total manufacturing costs are $360,000 when 50,000 toys are produced. Of this amount, total variable costs are $140,000. What are the total production costs when 85,000 toys are produced? (Assume the same relevant range for both production levels.)