1. John Anderson uses gas to heat his home. He has accumulated the following information regarding his 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	850	$129
April	300	$ 52

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

Select one:

A. $0.17

B. $6.59

C. $0.14

D. $5.77

2. All of the following are examples of activity cost drivers except

Select one:

A. placing a purchase order for raw materials.

B. providing employees with cost information and authorizing them to make decisions.

C. inspecting incoming raw materials.

D. hiring and training a new employee.

3. Bloomington Corporation reported the following on their contribution format income statement:

Sales (12,000 units)	$175,000
Less: Variable expenses	100,000
Contribution margin	75,000
Less: Fixed expenses	62,500
Net operating income	$ 12,500

What is the unit contribution margin?

Select one:

A. $10.00

B. $ 6.25

C. $ 6.75

D. $17.00

4. Which of the following is an example of an organizational cost driver?

Select one:

A. Deciding how to arrange raw materials inventory within a warehouse

B. Inspecting incoming raw materials

C. Determining the best location for a manufacturing facility

D. Receiving raw materials into the warehouse

E. None of the above

5. Which of the following is an example of a structural cost driver?

Select one:

A. Deciding how to arrange raw materials inventory within a warehouse

B. Moving items being manufactured between workstations

C. Determining the best location for a manufacturing facility

D. Placing a purchase order for raw materials

E. None of the above

6. Product or service differentiation involves

Select one:

A. shifting sales to growing markets.

B. the use of new technologies in manufacturing.

C. creating something that is perceived as unique and worth a premium price.

D. any changes made to a product or service.

7. Which of the following is an example of an activity cost driver?

Select one:

A. Deciding how to arrange raw materials inventory within a warehouse

B. Designing components of a product so they can fit together only in the correct manner

C. Determining the best location for a manufacturing facility

D. Receiving raw materials into the warehouse

E. None of the above

8. A code of ethics should do which of the following?

Select one:

A. Provide a summary of a company's policies that define ethical standards of employee conduct

B. Include broad philosophical statements about behavior

C. Provide a common foundation for addressing ethical issues

D. All of the above

9. Axe Manufacturers produces a product with the following manufacturing cost hierarchy for its only current product.

Activity Level

Cost

Unit	10	per unit
Batch	250	per batch
Product	5,000	per year
Facility	25,000	per year

Next year Axe plans to manufacture 25,000 units of product, in batches of 250 units. Axes predicted manufacturing cost for next year is:

Select one:

A. $330,000

B. $305,000

C. $750,000

D. $735,500