Equation Quiz

34 Questions | Total Attempts: 270

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Equation Quiz

Do you know what an equation is? In calculation, an equation is a statement that affirms the equality of two expressions, which are linked by the equal sign. Solving an equation encompassing variables consists of determining which values of the variables render the equality true. It can also be explained as a situation or problem in which several factors must be considered. This fascinating quiz will have you adding knowledge + effort = success.


Questions and Answers
  • 1. 
    Which of the following statements is TRUE with respect to total variable costs?
    • A. 

      They will remain the same as production levels change within the relevant range

    • B. 

      They will decrease as production increases within the relevant range

    • C. 

      They will decrease as production decreases within the relevant range

    • D. 

      They will increase as production decreases within the relevant range

  • 2. 
    Which of the following equations represents the total mixed cost?
    • A. 

      Y=vx+f

    • B. 

      Y=vx

    • C. 

      Y=f

    • D. 

      Y=v+f

  • 3. 
    YouCall offers a calling plan that charges $2.00 per month plus $0.05 per minute of call time. Under this plan, what is the monthly cost if you talk for a total of 100 minutes?
    • A. 

      $7.00

    • B. 

      $5.00

    • C. 

      $3.00

    • D. 

      $2.00

  • 4. 
    The following graph indicates which type of total cost behavior?      y=2x+5
    • A. 

      Fixed

    • B. 

      Mixed

    • C. 

      Step

    • D. 

      Variable

  • 5. 
    Total costs for Watson & Company at 100,000 units are $350,000, while total fixed costs are $150,000.  The total variable costs at a level of 200,000 units would be:
    • A. 

      $700,000

    • B. 

      $175,000

    • C. 

      $400,000

    • D. 

      $300,000

  • 6. 
    Harbor Manufacturing is trying to predict the cost associated with producing its anchors.  At a production level of 4,000 anchors, Harbor Manufacturing’s average cost per anchor is $50.00.   If $20,000 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 5,000 anchors will be:
    • A. 

      $50,000

    • B. 

      $245,000

    • C. 

      $250,000

    • D. 

      $200,000

  • 7. 
    Using account analysis, what type of cost is the rental space at $2,000 per month?
    • A. 

      Fixed

    • B. 

      Mixed

    • C. 

      Step

    • D. 

      Variable

  • 8. 
    Ricco was reviewing the water bill for his carwash business and determined that the highest bill, $6,000, occurred in July when 2,000 cars were washed and the lowest bill, $4,500, occurred in February when 1,000 cars were washed. An estimate the fixed portion of the water bill would be
    • A. 

      $3,000

    • B. 

      $5,000

    • C. 

      $5,250

    • D. 

      $1,500

  • 9. 
    Below is information about the units produced and manufacturing costs for Snow Enterprises for the past six months. Month Number of units produced Total manufacturing costs January 7,940 $5,900 February 7,500 $5,460 March 6,400 $5,000 April 6,600 $5,500 May                   4,740 $5,100 June 7,800 $5,840               Using the high-low method, what is the monthly fixed manufacturing cost?            
    • A. 

      $800

    • B. 

      $11,000

    • C. 

      $3,915

    • D. 

      $1,985

  • 10. 
    Traditional income statements organize costs by:
    • A. 

      Function

    • B. 

      Behavior

    • C. 

      Discretionary vs. committed

    • D. 

      No particular manner. Costs are listed in any order.

  • 11. 
    The contribution margin is equal to:
    • A. 

      Sales minus cost of goods sold

    • B. 

      Sales minus variable expenses

    • C. 

      Sales minus fixed expenses

    • D. 

      Sales minus operating expenses

  • 12. 
    Toby’s Farm Store buys portable generators for $500 and sells them for $800. He pays a sales commission of 5% of sales revenue to his sales staff. Toby pays $2,000 a month rent for his store, and also pays $1,800 a month to his staff in addition to the commissions. Toby sold 200 generators in June. If Toby prepares a contribution margin income statement for the month of June, what would be his contribution margin?
    • A. 

      $268,000

    • B. 

      $160,000

    • C. 

      $52,000

    • D. 

      $108,000

  • 13. 
    Which of the following statements is FALSE?
    • A. 

      The main criticism of the high-low method is that it uses only two data points.

    • B. 

      Of the methods discussed in the text and in class of determining the variable and fixed components of a mixed cost, regression analysis is the most accurate

    • C. 

      The high-low method only utilizes the data at the highest and lowest cost levels

    • D. 

      The scatter-plot method is useful in identifying outliers

  • 14. 
    Which of the following would be considered a committed fixed cost
    • A. 

      Research and development

    • B. 

      Depreciation

    • C. 

      Office holiday party

    • D. 

      Advertising

  • 15. 
    To compute the unit contribution margin, __________ should be subtracted from the sales price per unit.
    • A. 

      Only variable period costs

    • B. 

      Only variable inventoriable product costs

    • C. 

      All variable costs

    • D. 

      All fixed costs

  • 16. 
    Managers can quickly forecast the total contribution margin by multiplying the projected:
    • A. 

      Sales revenue by the contribution margin ratio

    • B. 

      Sales units by the contribution ratio

    • C. 

      Sales revenue by the unit contribution margin

    • D. 

      Sales units by the variable cost ratio

  • 17. 
    Anthony Office Supplies sells refills on printer ink cartridges for $16 per refill. Variable costs are $4 per refill.  Fixed costs are $2,000 per month. What is the contribution margin ratio for the printer ink cartridge refills?
    • A. 

      133%

    • B. 

      12%

    • C. 

      25%

    • D. 

      75%

  • 18. 
    If the sale price per unit is $38, variable expenses per unit are $21, and total fixed expenses are $56,950, what will the breakeven sales in units be?
    • A. 

      1,499

    • B. 

      968,150

    • C. 

      2,712

    • D. 

      3,350

  • 19. 
    If the sale price per unit is $64, total fixed expenses are $90,000, and the breakeven sales in dollars is $360,000, what will the variable expense per unit be?
    • A. 

      $80.00

    • B. 

      $16.00

    • C. 

      $192.00

    • D. 

      $48.00

  • 20. 
    Healthy Greetings Corporation produces and sells fruit baskets for special events.  The unit selling price is $60, unit variable costs are $45, and total fixed costs are $2,670.  What are breakeven sales in dollars?
    • A. 

      $8,010

    • B. 

      $1,526

    • C. 

      $178

    • D. 

      $10,680

  • 21. 
    Which of the following statements is TRUE if the fixed costs increase while the sales price per unit and variable costs per unit remain constant?
    • A. 

      The contribution margin increases and the breakeven point decreases

    • B. 

      The contribution margin decreases and the breakeven point decreases

    • C. 

      The contribution margin stays the same and the breakeven point decreases

    • D. 

      The contribution margin stays the same and the breakeven point increases

  • 22. 
    Which of the following will decrease the breakeven point in units assuming no other changes in the cost-volume-profit relationship?
    • A. 

      An increase int he sale price per unit

    • B. 

      A decrease in the sale price per unit

    • C. 

      An increase in total fixed costs

    • D. 

      An increase in the variable costs per unit

  • 23. 
    Julia's Catering has a monthly target operating income of $6,000. Variable expenses are 40% of sales and monthly fixed expenses are $3,600. What is the monthly margin of safety in dollars if the business achieves its operating income goal?
    • A. 

      $10,000

    • B. 

      $22,000

    • C. 

      $16,000

    • D. 

      $4,000

  • 24. 
    The higher the operating leverage factor, the:
    • A. 

      Greater the impact of volume on operating income

    • B. 

      Lesser the impact of volume on operating income

    • C. 

      More likely operating income is to stay constant

    • D. 

      Greater the chance that none of the above occur

  • 25. 
    Southwest Electric Co-op has variable expenses of 20% of sales and monthly fixed expenses of $150,000.  The monthly target operating income is $50,000.  What is Southwest Electric Co-op’s operating leverage factor at the target level of operating income?
    • A. 

      1.33

    • B. 

      2.00

    • C. 

      4.00

    • D. 

      0.25