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Fixed costsdo notrespond to

Select one:

A.short-term changes in the amount of activity.

B.changes in committed expenditures.

C.capital expenditures made by the company.

D.discretionary investments in the company.

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Which of the following is an example of a discretionary fixed cost?

Select one:

A.Salaries of production supervisors

B.Property taxes on manufacturing facilities

C.Donations to charitable organizations

D.Depreciation of manufacturing facilities

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• Sofia Smith 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	850	$129
April	300	$ 52

The equation representing the relationship between the gas bill (Y) and heating degree-days (X) is:

Select one:

A.Y = $10 + $0.14X

B.Y = $0.14

C.Y = $10 - $0.14X

D.Y = $60 + $0.14X

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The Mayfield Delivery Service has the following information about its truck fleet miles and operating costs:

Year	Miles	Operating Costs
2018	125,000	$80,000
2019	150,000	$87,500
2020	175,000	$105,000

What is the best estimate of fixed costs for fleet operating expenses in 2020 using the high-low method?

Select one:

A.$25,000

B.$50,000

C.$17,500

D.$17,000

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Which one of the following statements about difficulties in cost estimation istrue?

Select one:

A.The shorter the time period, the higher the probability of inappropriately matching activity and cost

B.When prices of a company's raw materials or labor are rapidly increasing, cost estimations based on previous periods will overestimate future costs

C.Changes in the company's production technology make estimating the company's production costs easier

D.The stronger the economy, the harder it is to accurately match activity and cost

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The following procedure performed by a dairy is thebestexample of a unit level activity within a manufacturing cost hierarchy:

Select one:

A.Filling milk into half-gallon cartons

B.Homogenizing milk in specially designed tanks

C.Receiving milk from farms

D.Delivering dairy products to a grocery store

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Parts used in manufacturing digital cameras would best be classified as what type of cost?

Select one:

A.Fixed cost

B.Step cost

C.Mixed cost

D.Variable cost

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Martin Manufacturers produces a product with the following manufacturing cost hierarchy for its only current product.

Activity Level

Cost

Unit	$10	per unit
Batch	$250	per batch
Product	$5,000	per year
Facility	$25,000	per year

Next year Martin plans to manufacture 25,000 units of product, in batches of 250 units. Axe's predicted manufacturing cost for next year is:

Select one:

A.$750,000

B.$305,000

C.$330,000

D.$735,500

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Lorri's income statement is as follows:

Sales (10,000 units)	$40,000
Less variable costs	- 24,000
Contribution margin	$16,000
Less fixed costs	- 12,000
Net income	$ 4,000

If sales increase by $10,000, profits will:

Select one:

A.Increase by $3,000

B.Increase by $4,000

C.Increase by $500

D.Increase by $10,000

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Using cost-volume-profit analysis, we can conclude that a 20 percent reduction in variable costs will

Select one:

A.reduce the slope of the total costs line by 20 percent.

B.not affect the break-even sales volume if there is an offsetting 20 percent increase in fixed costs.

C.reduce the break-even sales volume by 20 percent.

D.reduce total costs by 20 percent.

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Dana Company sells one product at a price of $50 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $50,000. The sales dollars level required to break even are:

Select one:

A.$ 2,500

B.$83,333

C.$10,000

D.$41,667