Accounting Quiz: Practice Exam!

25 Questions | By Amphib2007 | Updated: Mar 22, 2022 | Attempts: 865

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1.

Based on the information in Table M5-2, assuming Laramie Tack & Saddle uses the high-low method to separate mixed costs, if the company processes 4,100 packages during July, the total variable cost will be:
- A.
  
  $3,960
- B.
  
  $2,952
- C.
  
  $2,665
- D.
  
  $6,601
2.

What is the amount of fixed cost per sales dollar using the high-low method?
- A.
  
  $152,500
- B.
  
  $30,000
- C.
  
  $22,500
- D.
  
  $450,000
3.

Using the high-low method, what is the amount of salesperson’s earnings if the sales are $2,750,000?
- A.
  
  $163,750
- B.
  
  $175,00
- C.
  
  $167,500
- D.
  
  $160,000
4.

Instead of plotting mixed cost data manually:
- A.
  
  The high-low method can be used to automatically plot the data
- B.
  
  Excel can be used
- C.
  
  Microsoft DataGraph can be used
- D.
  
  None of these answers is correct.
5.

Which of the following is an example of a variable cost related to sales activity?
- A.
  
  Direct material
- B.
  
  Sales commissions
- C.
  
  Sales salaries
- D.
  
  Monthly retail store rent
6.

The engineering approach to cost identification relies heavily on the use of:
- A.
  
  Technical experts and professionals
- B.
  
  Visual graphs
- C.
  
  Mathematical equations
- D.
  
  Formulas
7.

Which of the following is not an example of a fixed cost?
- A.
  
  Depreciation on a factory building
- B.
  
  Factory insurance cost
- C.
  
  Monthly store rent
- D.
  
  All of these answers are examples of fixed costs.
8.

The method used to separate mixed costs that use only two data points (even if more reliable points are available) is called:
- A.
  
  The engineering approach
- B.
  
  Regression analysis
- C.
  
  Scatter graphing
- D.
  
  The high-low method
9.

Based on the information in Table M5-4, the total cost of operating the purchasing department if 1,500 purchase orders are processed would be about:
- A.
  
  $60,000
- B.
  
  $110,000
- C.
  
  $100,000
- D.
  
  The cost cannot be determined from the information on the chart.
10.

The method used to separate the components of mixed cost which focuses on the mathematical differences between the two extremes of observations is called:
- A.
  
  The high-low method
- B.
  
  The engineering approach
- C.
  
  Scatter graphing
- D.
  
  Regression analysis
11.

A drawback to using the high-low method is that this method is based on:
- A.
  
  Costs
- B.
  
  Only two data points at opposite extremes
- C.
  
  Mathematical calculations
- D.
  
  Activity
12.

When the scatter graph method is compared with the high-low method, the fixed and variable costs will be:
- A.
  
  Extremely different
- B.
  
  Somewhat different
- C.
  
  Identical
- D.
  
  None of these answers is correct.
13.

An accountant would use which formula to find the number of variable costs?
- A.
  
  Total costs / fixed costs
- B.
  
  Fixed costs / total costs
- C.
  
  Fixed costs – variable costs
- D.
  
  Total costs – fixed costs
14.

A cost that does not change as the level of business activity changes is a:
- A.
  
  Variable cost
- B.
  
  Mixed cost
- C.
  
  Fixed cost
- D.
  
  Semi-variable cost
15.

The most mathematically complex method used for separating mixed costs is:
- A.
  
  Engineering approach
- B.
  
  Regression analysis
- C.
  
  Scatter graphing
- D.
  
  High-low method
16.

In the basic mathematical regression equation, the X represents:
- A.
  
  Unit variable cost
- B.
  
  Activity level
- C.
  
  Fixed cost
- D.
  
  Total cost
17.

Fixed costs are costs that __________ in total, but __________ as the business activity level changes.
- A.
  
  Remain constant; change per unit
- B.
  
  Change; remain fixed per unit
- C.
  
  Fluctuate; are relatively stable
- D.
  
  None of these answers is correct.
18.

Activities that are outside of the relevant range:
- A.
  
  Only affect fixed costs in a business setting
- B.
  
  Can still affect costs in a business setting
- C.
  
  Only impact variable costs in a business setting
- D.
  
  Do not affect costs in a business setting
19.

In the basic mathematical regression equation, the Y represents:
- A.
  
  Unit variable cost
- B.
  
  Total cost
- C.
  
  Fixed cost
- D.
  
  Activity level
20.

An equation used to determine the components of mixed cost is:
- A.
  
  Mixed cost = total cost – variable cost
- B.
  
  Total mixed cost = fixed cost element – variable cost element
- C.
  
  Total cost = fixed cost + variable cost
- D.
  
  Total mixed cost = fixed cost element + variable cost element
21.

The reaction of costs to changes in levels of business activity is called:
- A.
  
  Semi-variable cost tracking
- B.
  
  Marketing mix
- C.
  
  Managerial decision behavior
- D.
  
  Cost behavior
22.

The information from Table M5-2 for applying the high-low method should come from the months of:
- A.
  
  April and June
- B.
  
  May and June
- C.
  
  February and April
- D.
  
  February and May
23.

Based on the information in Table M5-1, the types of cost that would be considered a mixed cost for Horse & Buggy would be:
- A.
  
  C and E
- B.
  
  E and F
- C.
  
  C, D, and E
- D.
  
  C and F
24.

When a cost no longer holds to its cost behavior pattern, the activity may be:
- A.
  
  A mixed cost
- B.
  
  An indeterminable cost
- C.
  
  A fixed cost
- D.
  
  Outside the relevant range
25.

__________ costs change in total proportionately with changes in the level of business activity.
- A.
  
  Frozen
- B.
  
  Fixed
- C.
  
  Mixed
- D.
  
  Variable