Fixed costs do not respond to: Capital expenditures made by the company Short-term changes in the amount of activity Changes in committed expenditures Discretionary investments in the company Cari German uses gas to heat her home. She has accumulated the following information regarding her 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 1,900 $254 April 600 $101 What will be the increase in Cari's monthly gas bill per heating degree-day using the high-low method?

$0.3309 $0.1177 $46.00 $153.00

Cari German uses gas to heat her home. She has accumulated the following information regarding her 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 1,900 $254 April 600 $101 The equation representing the relationship between the gas bill (Y) and heating degree-days (X) is Y = $0.1177X Y = $24.52 + $0.1177X Y = $30.37 + $0.1177X Y = $120 + $0.1177X

The Fairmont Machine Shop wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Month Cost of Electricity (Y) Direct Labor-Hours (X) January $14,000 1,500 April $15,000 1,700 July $17,000 2,000 October $14,500 1,600 What would be the best equation using the high-low method? Y = $4,000 + $7X Y = $0 + $9X Y = $1,000 + $8X Y = $5,000 + $6X Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years: Year Miles Operating Costs 2009 110,000 $390,000 2010 140,000 $420,000 2011 100,000 $360,000 2012 130,000 $410,000 2013 170,000 $450,000 What is the best estimate of total operating expenses for 2014 using the high-low method based on total expected miles of 120,000?

$385,500 $390,000 $392,000 $402,000

Eva Company sells one product at a price of $25 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $25,000. The sales dollars level required to break even are:

$ 2,500 $ 10,000 $ 33,333 $ 41,667

The following costs relate to Soapbox Company for a relevant range of up to 10,000 units annually: Variable Costs: Direct materials $2.50 Direct labor 0.75 Manufacturing Overhead 1.25 Selling and administrative 1.00 Fixed Costs: Manufacturing overhead $20,000 Selling and Administrative 10,000 Soapbox sells each unit for $10.00. Which of the following equations best describes the equation to determine total profit for a sales volume of 8,000 units?

Profit = $10.00X ($30,000 + $5.50X) Profit = $30,000 + $5.50X Profit = $10.00X ($10,000 $4.50X) Profit = $10X

The following costs related to Summertime Company for a relevant range of up to 20,000 units annually: Variable Costs: Direct materials $5.00 Direct labor 1.50 Manufacturing Overhead 2.50 Selling and administrative 3.00 Fixed Costs: Manufacturing overhead $20,000 Selling and Administrative 10,000 The selling price per unit of product is $15.00. At a sales volume of 15,000 units, what is the total profit for Summertime Company

$ 30,000 $ 15,000 $ 225,000 $ 300,000

Peoria Corporation reported the following on their contribution format income statement: Sales (12,000 units) $350,000 Less: variable expenses 200,000 Contribution margin $150,000 Less: fixed expenses 125,000 Net operating income $ 25,000 If sales increase by 10%, net operating income will increase by what amount?

$-0 $ 1,500 $ 15,000 $ 30,000

The Cornell Milling Company manufactures an intermediate product identified as W1. Variable manufacturing costs per unit of W1 are as follows: Direct materials $ 5 Direct labor $15 Variable manufacturing overhead $10 Ithaca Tools has offered to sell Cornell Milling 10,000 units of W1 for $40 per unit. If Cornell Milling accepts the offer, $50,000 of fixed manufacturing overhead will be eliminated. Applying differential analysis to the situation, Cornell Milling should:

Buy W1; the savings is $100,000 Buy W1; the savings is $50,000 Buy W1; the savings is $50,000 Make W1; the savings is $50,000