Variable Cost and Unit Selling Price

4239 Words Dec 22nd, 2013 17 Pages
3369. Cost behavior refers to the manner in which:

*a. a cost changes as the related activity changes
b. a cost is allocated to products
c. a cost is used in setting selling prices
d. a cost is estimated

3370. The three most common cost behavior classifications are:

a. variable costs, product costs, and sunk costs
*b. fixed costs, variable costs, and mixed costs
c. variable costs, period costs, and differential costs
d. variable costs, sunk costs, and opportunity costs

3371. Costs that remain constant in total dollar amount as the level of activity changes are called:

*a. fixed costs
b. mixed costs
c. opportunity costs
d. variable costs


Which of the graphs in Figure 20-1
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variable/fixed cost
*b. mixed cost
c. discretionary cost
d. sunk cost

3387. Which of the following costs is a mixed cost?

a. Salary of a factory supervisor
b. Electricity costs of $2 per kilowatt-hour
*c. Rental costs of $5,000 per month plus $.30 per machine hour of use
d. Straight-line depreciation on factory equipment

3388. For purposes of analysis, mixed costs are generally:

a. classified as fixed costs
b. classified as variable costs
c. classified as period costs
*d. separated into their variable and fixed cost components

3389. Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

a. $56,000
*b. $28,400
c. $17,600
d. cannot be determined from the data given

3390. Given the following cost and activity observations for Bounty Company’s utilities, use the high-low method to calculate Bounty’ variable utilities costs per machine hour. Cost
Machine Hours
$3,100 15,000 April

10,000 May

12,000 June


a. $10.00
b. $.67
c. $.63
*d. $.11

3391. Given the following cost and activity observations for Smithson Company’s utilities, use the high-low method to

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