1) Fixed costs do not respond to:

		Capital expenditures made by the company
		Short-term changes in the amount of activity
		Changes in committed expenditures
		Discretionary investments in the company

2) Cari German uses gas to heat her home. She has accumulated the following information regarding her monthly gas bill and monthly heating degree-days. The heating degree-days value for a month is found by first subtracting the average temperature for each day from 65 degrees and then summing these daily amounts together for the month.

Month	Heating Degree-Days	Gas Bill
February	1,900	$254
April	600	$101

What will be the increase in Cari's monthly gas bill per heating degree-day using the high-low method?

		$0.3309
		$0.1177
		$46.00
		$153.00

3) As volume increases, which of the following statements is not correct?

Variable cost per unit remains the same.

Total fixed costs remain the same.

Average cost per unit will increase.

Total variable costs will increase.

4) Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years:

Year	Miles	Operating Costs
2009	110,000	$390,000
2010	140,000	$420,000
2011	100,000	$360,000
2012	130,000	$410,000
2013	170,000	$450,000

What is the best estimate of total operating expenses for 2014 using the high-low method based on total expected miles of 120,000?

		$385,500
		$390,000
		$392,000
		$402,000

5)

Wesleys income statement is as follows:

Sales (10,000 units)	$80,000
Less variable costs	- 48,000
Contribution margin	$32,000
Less fixed costs	- 24,000
Net income	$ 8,000

If sales increase by $20,000, profits will:

Increase by $1,000

Increase by $8,000

Increase by $6,000

Increase by $20,000

6)

The following information pertains to Oliwanders 2014 operations:

Selling price per unit	$50
Variable costs per unit	$20
Total fixed costs	$110,000

Oliwanders break-even point in units is:

2,000 units

3,333 units

3,667 units

60,000 units

7)

Peoria Corporation reported the following on their contribution format income statement:

Sales (12,000 units)	$350,000
Less: variable expenses	200,000
Contribution margin	$150,000
Less: fixed expenses	125,000
Net operating income	$ 25,000

If sales increase by 10%, net operating income will increase by what amount?

$-0

$ 1,500

$ 15,000

$ 30,000

8)

The following information is available:

Beginning raw materials inventory $ 11,000

Ending raw materials inventory 13,000

Beginning work-in-process inventory 20,000

Ending work-in-process inventory 28,000

Beginning finished goods inventory 56,000

Ending finished goods inventory 48,000

Raw materials purchased 90,000

Cost of goods manufactured 229,000

Based on the above, the cost of goods sold was:

$237,000

$317,000

$98,000

None of these answers is correct

9)

The following information is available:

Beginning raw materials inventory $100,000

Ending raw materials inventory 120,000

Beginning work-in-process inventory 270,000

Ending work-in-process inventory 300,000

Beginning finished goods inventory 560,000

Ending finished goods inventory 480,000

Raw materials purchased 990,000

Based on the above, the raw materials used to production was:

$1,020,000

$1,010,000

$990,000

None of these answers is correct.

10)

Rossi Manufacturing has decided to use specific cost pools to allocate its overhead costs. Rossi has identified the following information for the current year:

Estimated

Estimated Allocation

Overhead Pool Allocation Base Cost Base

Pool 1 - Storage Number of parts $150,000 600,000

Pool 2 - Design Number of production runs $100,000 50

Pool 3 - Production Number of machine hours $250,000 40,000

Pool 4 - Quality Number of components tested $ 75,000 100,000

Pool 5 - Security Number of direct labor hours $180,000 15,000

If it takes 12 parts to make a unit, the overhead cost per unit for storage is:

		$12.50
		$15,625.00
		$3.00
		$31,250.00