| E.None of the answer choices is correct. Presented below are the production data for the mixed costs incurred by Clarion Company. Month Cost Units March $4,700 3,700 April 7,200 5,050 May 5,565 4,725 June 9,500 8,500 July 7,915 6,745 August 8,300 7,500 Clarion Company uses the high-low method to estimate mixed costs. What is the estimated total mixed cost at an operating level of 7,000 units? | A.$10,700 | | | B.$16,500 | | | C.$7,700 | | | D.$8,000 | | | E.None of the answer choices is correct. All costs behave in a linear manner. | A.True | | | B.False An example of a mixed cost would include salespersons who are paid salaries plus commissions based on sales dollars. | A.True | | | B.False Regression analysis for Barton Industries results in the following output. Coefficients Y Intercept 880 X Variable 1,016.75 Using the information above, what is the cost equation in the form Y = f + vX? | A.880 = f + v (1,016.75) | | | B.Y = 1,016.75 + 880X | | | C.1,016.75 = 880 + vX | | | D.Y = 880 + 1,016.75X | | | E.None of the answer choices is correct. Hayley Inc. is using the account analysis approach to identify the cost behavior of production costs for one month. The production manager was asked to review these costs and provide her best guess as to how they should be categorized. Hayley produced 200 units for the month. She responded with the following information. Which of the following best describes the production costs in equation form? | A.Y = $20,000 - $4,000X | | | B.Y = $20,000 + $4,000X | | | C.Y = $800,000 + $20,000X | | | D.Y = $4,100X | | | E.None of the answer choices is correct. Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs were $50,000, and variable production costs amounted to $21 per unit. Fixed selling and administrative costs totaled $20,000, and variable selling and administrative costs amount to $3.00 per unit. Dawson produced and sold 6,000 units last month. Using a traditional income statement, which of the following amounts is the gross margin? | A.$424,000 | | | B.$474,000 | | | C.$456,000 | | | D.$386,000 | | | E.None of the answer choices is correct. Manchester Company is a small company that has hired you to help them estimate costs. They present you with the following information from the companys most recent fiscal year. Sales (2,000 units) $1,000,000 Cost of goods sold (24% of sales) 240,000 Store supervisor's annual salary 65,000 Annual operating costs 70,000 Annual advertising and promotion 10,000 Sales commissions (5% of sales). What type of cost estimation method is being used for Manchester? | A.Regression analysis | | | B.Scattergraph method | | | C.Account analysis | | | D.High-low method | | | E.None of the answer choices is correct. Wayside Company has machine hours of 5,000 and machine costs of $170,000 at the high data point. Machine hours are 2,000 and machine costs are $110,000 at the low data point. Wayside uses the high-low method to estimate costs. What is the estimated cost per machine hour? | A.$34 | | | B.$55 | | | C.$20 | | | D.$40 | | | E.None of the answer choices is correct. Tyler Incorporated sells 5,000 units per month with the following costs: Variable costs: $1.25 per unit Fixed costs: $3,000 per month. Tyler recently switched vendors and expects variable costs to rise by $1.00 per unit. However, with a new lease on the factory, Tyler expects fixed costs to drop by $300 per month. After making the changes, what is Tyler's cost equation used to estimate total monthly costs? | A.Y = $2,700 + $0.25X | | | B.Y = $2,700 + $1.25X | | | C.Y = $2,700 + $2.25X | | | D.Y = $2,700 - $2.25X | | | E.None of the answer choices is correct. | | | | | | | | | |
