1. 5. Smith Inc recently conducted a least squares regression analysis to predict selling expenses. The company had constructed the following regression equation: Y=329000 + 7.80X. Which of the following statements is false if the primary cost drive is number of units sold?

1. The company anticipates 329,000 of fixed selling expenses
2. The company expects both variable and fixed selling expenses
3. For each unit sold total selling expenses will increase by 7.80
4. X represents the number of hours worked during the period

1. 6. A company observed a decrease in the cost per unit. All other things being equal, which of the following is probably true?

1. The company is studying a variable cost and total volume has decreased
2. The company is studying fixed cost and total volume has increased
3. The company is studying fixed cost and total volume has decreased
4. The company is studying a fixed cost and total volume has remained constant
5. A company is studying a variable cost and total volume has increased

1. At a volume of 20000 units Fry reported sales revenues of 1 million variable costs of 300,000 and fixed costs of 260000.The companys contribution margin per unit is

a.22

b. 28

c. 35

d. 37

1. 7. Cane inc uses the high low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged 10.20 per hour. When activity jumped to 24,000 machine hours, which was still the relevant range the average total cost per machine hour was 9. 75. On the basis of this information the companys fixed maintenance costs were:

1. 24,000
2. 90,000
3. 210,000
4. 234,000
5. an amount other than those above

1. A company has fixed costs of $900 and a per unit contribution margin of $3. Which of the following statements is(are) true?

1. Total contribution margin equals the sum of variable cost-plus fixed cost
2. The situation described is not possible and there must be an error
3. Once break-even point is reached the company will increase income at the rate of 3.00 per unit
4. The firm will definitely lose money in this situation

1. 8. Which of the following costs changed in direct proportion to a change in the activity level?

1. Variable cost
2. Fixed cost
3. Semi variable cost
4. Step variable cost
5. Step fixed cost

1. A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales by the:

1. Contribution margin
2. Gross margin
3. Operating leverage factor
4. Safety margin
5. Contribution margin ratio

1. 9 A volume of 20000 dries reported sales revenues of 1 million Variable costs of 300,000 and fixed of 260,000 The companys breaks even point in units is

1. 7,027 (rounded)
2. 8,667 (rounded)
3. 9,268 (rounded)
4. 7,429 (rounded)
5. An amount other than those above

1. 9a. Ricco co makes and sells only one product. The unit contribution margins 6.00 and breakeven point in units sales is 24,000. The companys fixed costs are:

1. 4000
2. 14,400
3. 40,000
4. 144,000
5. An amount other than those above

1. 10 Swinne and associates presently leases a copy machine under an agreement that calls for a fixed each month and a charge for each company made. Company made 7,000 copies and said a total of $60 in march in may the firm paid 280 for 5,000. The company uses the high low method analyze costs. The companys variable cost per copy is:

1. 0.040
2. 0.051
3. 0.053
4. 0.056