13. Cost drivers are ________.

A) the different functions in the value chain

B) different types of functional areas in the firm

C) measures of activities that require the use of resources and thereby cause costs

D) different types of cost calculations

14. Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane. What is an appropriate cost driver for the labor resources used for this activity?

A) number of service center hours

B) number of engineering hours

C) number of mechanic hours

D) number of labor hours used to install seats

15. Within the relevant range, the total amount of ________ cost changes in direct proportion to changes in the cost driver. Within the relevant range, the total amount of ________ cost does not change in direct proportion to changes in the cost driver.

A) variable; fixed

B) fixed; variable

C) step; mixed

D) mixed; step

16. Which of the following costs is a variable cost?

A) rental expense for factory building for manufacturer of electronics

B) depreciation expense of airplane for airline

C) lease cost for factory machine for manufacturer of electronics

D) fuel for airplane for airline

17. Which of the following costs is a fixed cost?

A) cost of dairy ingredients used to produce ice cream

B) fuel used by delivery trucks

C) depreciation expense on factory building

D) labor wages of workers who mix dairy ingredients to make ice cream

18. In a small construction firm, a crew supervisor is added for every ten workers employed. The salaries of the crew supervisors are a ________.

A) variable cost

B) mixed cost

C) fixed cost

D) step cost

19. Garcia Company, a producer of salsa, has the following information:

Income tax rate 35%

Selling price per unit $7.00

Variable cost per unit $4.00

Total fixed costs $60,000.00

The contribution margin per unit is ________.

A) $4.00

B) $7.00

C) $5.00

D) $3.00

20. Nicholas Company sells desks at $350 per desk. The variable costs are $280 per desk. Total fixed costs for the period are $350,000. The contribution margin ratio is ________.

A) 22.5%

B) 37.5%

C) 20.0%

D) 62.5%

21. Suppose a hotel has annual fixed costs applicable to its rooms of $1.5 million for its 200-room hotel. Average daily room rents are $60 per room and average variable costs are $15 for each room rented. It operates 365 days per year. If the hotel is completely full throughout the year, what is net income for one year?

A) $1,580,000

B) $2,000,000

C) $1,785,000

D) $1,380,000

22. Smith Company has total variable costs of 75% of total revenues and fixed costs of $9 million per year. What is the break-even point expressed in total revenue dollars?

A) $10 million

B) $12.5 million

C) $25 million

D) $12 million

23. James Company, a producer of electronic components, has the following information:

Income tax rate 30%

Selling price per unit $10.00

Variable cost per unit $4.00

Total fixed costs $180,000.00

The break-even point in dollars is ________.

A) $300,000

B) $280,000

C) $350,000

D) $320,000