Ch. 3 Exercises 32) Selected financial data for Flash Corporation follows for a production level of 100,000 units: Total fixed costs $400,000 Total costs (fixed and variable) $500,000 A. Calculate the variable cost per unit. B. If Flash Corporation makes 80,000 units, calculate the fixed cost per unit. C. If Flash Corporation makes 150,000 units, calculate the total variable costs. D. If Flash Corporation makes 200,000 units, calculate the total costs. 33) The following chart shows three different costs: Cost A, Cost B, Cost C. For each cost, the chart shows the total cost and cost per unit at two different volumes within the same relevant range. Based on this information, identify each cost as fixed, variable or mixed. At 10,000 units At 20,000 units Total cost Cost per Unit Total cost Cost per Unit Cost behaviour Cost A $ 80,000 $ 8.00 $ 80,000 $ 4.00 Cost B $ 80,000 $ 8.00 $ 160,000 $ 8.00 Cost C $ 80,000 $ 8.00 $ 120,000 $ 6.00 37) Jensen Ltd. reports the following information for September: Sales $15,000 Variable costs 3,000 Fixed costs 4,000 Operating income $8,000D. If Flash Corporation makes 200,000 units, calculate the total costs. 33) The following chart shows three different costs: Cost A, Cost B, Cost C. For each cost, the chart shows the total cost and cost per unit at two different volumes within the same relevant range. Based on this information, identify each cost as xed, variable or mixed. At 10,000 units At 20,000 units Total cost Cost per Unit Total cost Cost per Unit Cost behaviour Cost A $ 80,000 $ 8.00 $ 80,000 3 4.00 Cost B $ 80,000 S 8.00 $ 160,000 $ 8.00 Cost C $ 80,000 $ 8.00 $ 120,000 $ 6.00 37) Jensen Ltd. reports the following information for September: Sales 53 1 5 ,000 Variable costs 3,000 Fixed costs 3% Operating income _$,M Required: If sales double in October, what is the projected operating income? Circle the letter of the best response. 1. Costs that do not increase as the volume of production increases are: E_-1 2. 4. When graphing total xed costs, using a horizontal axis representing units of production and the vertical axis representing total costs, the line on the graph would be shown as a(n): A. horizontal line. B. vertical line. C. upward sloping line. D. downward sloping line. Which of the following statements is NOT true about costs per unit within the relevant range? A. Variable costs stay constant with changes in volume. B. Curvilinear costs stay constant with changes in volume. C. Fixed costs decrease in proportion to increases in volume. D. Mixed costs decrease, but not in direct proportion to increases in volume. How would the equation for total costs be written using the following? 5. y = total costs v = variable cost per unit of activity x = volume of activity f = total xed costs A cell phone bill consisting of a monthly base, plus an added amount when too many minutes are used can be classied as a: A. variable cost. B. xed cost. C. mixed cost. D. sten cost. 6. A company is analyzing its mixed costs. During March, its busiest month, a company had total labour hours of 13,000 and total costs of $33,000. During August, its slowest month, the company had labour hours of 7,000 and total costs of $21,000. The company is planning for 17,000 direct labour hours next March. How many dollars should the company budget for fixed costs during March? A. $6,000 C. $34,000 B. $7,000 D. $41,000 7. A company is analyzing its mixed costs. During March, its busiest month, a company had total labour hours of 13,000 and total costs of $33,000. During August, its slowest month, the company had labour hours of 7,000 and total costs of $21,000. The company is planning for 11,000 direct labour hours next March. How many dollars should the company budget for total costs during March? A. $6,000 C. $12,000 B. $7,000 D. $29,000 8. Which of the following statements is NOT true regarding regression analysis? A. Regression analysis is a statistical procedure for determining the line that best fits the data. B. Regression analysis uses the high volume and low volume points to determine the best fit between the two data points. C. Regression analysis helps generate a statistic, called the R-square, which tells how well the line fits the data points. D Regression analysis helps managers implement activity based costing systems. 9. Which of the following is a data concern when using the high-low method and regression analysis? A. Outliers B. The use of only two data points C. Low variable cost per unit High fixed costs 10. An income statement organized according to the contribution margin approach: A. subtracts variable costs from sales revenue to show the contribution margin. B. presents all variable costs whether relating to the merchandise sold or selling and administrative activities, above the contribution margin line. C. is all of the above. D. is none of the above