___ 1. A companys cost formula for maintenance

is Y = $4,000 + $3X, where X is machine hours. Dur-

ing a period in which 2,000 machine hours are worked,

the expected maintenance cost would be: a) $12,000; b)

$6,000; c) $10,000; d) $4,000.

___ 2. The costs associated with a companys ba-

sic facilities, equipment, and organization are known

as: a) committed fixed costs; b) discretionary fixed

costs; c) mixed costs; d) variable costs.

___ 3. Last year, Barker Companys sales were

$240,000, its fixed costs were $50,000, and its varia-

ble costs were $2 per unit. During the year, 80,000

units were sold. The contribution margin was: a)

$200,000; b) $240,000; c) $30,000; d) $80,000.

___ 4. An example of a discretionary fixed cost

would be: a) depreciation on equipment; b) rent on a

factory building; c) salaries of top management; d)

items a, b, and c are all discretionary fixed costs; e)

none of the above.

___ 5. In March, Espresso Express had electrical

costs of $225.00 when the total volume was 4,500

cups of coffee served. In April, electrical costs were

$227.50 for 4,750 cups of coffee. Using the high-low

method, what is the estimated fixed cost of electricity

per month? a) $200; b) $180; c) $225; d) $150.