Management Accounting

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  • Topic: Variable cost, Direct material price variance, Cost
  • Pages : 23 (3651 words )
  • Download(s) : 80
  • Published : January 18, 2012
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Use the following to answer question 1:

Marger, Inc., provided the following data for two recent months:

[pic]

|1. |Which of the following classifications best describes the behavior of Cost T? | |A) |Variable | |B) |Fixed | |C) |Mixed | |D) |None of the above |

|2. |The following data pertains to activity and maintenance costs for two recent years: | | | | | |[pic] | | |Using the high-low method, the cost formula for maintenance would be: | |A) |$1.50 per unit. | |B) |$1.25 per unit. | |C) |$3,000 plus $1.50 per unit. | |D) |$6,000 plus $0.75 per unit. |

|3. |Rible Company has observed that at an activity level of 8,000 units the cost for maintenance is $15,000, and at 10,000 units the| | |cost for maintenance is $16,500. Using the high-low method, the cost formula for maintenance is: | |A) |$15,000 plus $0.15 per unit. | |B) |$9,000 plus $0.75 per unit. | |C) |$1.65 per unit. | |D) |$1.875 per unit. |

|4. |Which of the following types of firms likely would have a high proportion of variable costs in its cost structure? | |A) |Public utility. | |B) |Airline. | |C) |Fast food outlet. | |D) |Architectural firm. |

|5. |Factory overhead is an example of a: | |A) |mixed cost. | |B) |fixed cost. | |C) |variable cost. | |D) |irrelevant cost....
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