Question 7 2 pts The activity director for Harriott Hotel is planning an activity. She is considering alternative ways to set up the activity's cost structure. Select the incorrect statement from the following. If the director expects a large turnout, she should attempt to convert variable costs into fixed costs. If the director shifts the cost structure from fixed to variable, the potential for profits will be reduced. If the director shifts the cost structure from fixed to variable, the level of risk decreases. If the director expects a low turnout, she should use a fixed cost structure. Question 8 2 pts Java Joe's operates a chain of coffee shops. The company pays rent of $12,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The managers of each shop are paid a salary of $2,000 per month and all other employees are paid on an hourly basis. Relative to the number of customers, the cost of rent is which kind of cost? Variable cost O Fixed cost O Mixed cost Relevant cost Question 9 2 pts Lucy Treasures operates a chain of gift shops. The company pays liability insurance premiums of $2,500 per year for each shop. The managers of each shop are paid a salary of $3,000 per month and all other employees are paid on an hourly basis. Relative to the number of shops, the costs of insurance is which kind of cost? O Variable cost Fixed cost Mixed cost Semi-variable Question 10 2 pts Use the following information for Questions 10, 11 & 12: Unit-Level OH Batch- Level OH Product- Level OH Facility- Level OH Total OH Total OH Costs $10,000 $20,000 $50,000 $120,000 $200,000 Cost Driver 400 labor hrs 5,000 100 setups machine hrs 24,000 units Small Tractor Tires Share 40 labor hrs of Cost Driver 2 setups 1,500 machine hrs 1,000 units Roadster Tires produces a variety of auto and truck tires at its Dayton manufacturing plant. The plant is highly automated and uses an activity- based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated with four activity cost pools are given below: 10. If the company had used labor hours as a company-wide allocation base, how much total overhead would have been allocated to the Small Tractor Roadster Tires produces a variety of auto and truck tires at its Dayton manufacturing plant. The plant is highly automated and uses an activity- based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated with four activity cost pools are given below: 10. If the company had used labor hours as a company-wide allocation base, how much total overhead would have been allocated to the Small Tractor Tires? O $5,000 $21,400 $8,000 O $20,000 Question 11 2 pts Use the following information for Questions 10, 11 & 12: Unit-Level OH Batch- Level OH Product Level OH Facility- Level OH Total OH Total OH Costs $10,000 $20,000 $50,000 $120,000 $200,000 Cost Driver 400 labor hrs 100 setups 5,000 machine hrs 24,000 units Small Tractor Tires Share 40 labor hrs of Cost Driver 2 setups 1,500 machine hrs 1,000 units Roadster Tires produces a variety of auto and truck tires at its Dayton manufacturing plant. The plant is highly automated and uses an activity- based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated with four activity cost pools are given below: 11. If the company had used machine hours as a company-wide allocation base, how much total overhead would have been allocated to the Small Tractor Tires? Small Tractor Tires Share 40 labor hrs of Cost Driver 2 setups 1,500 machine hrs 1,000 units Roadster Tires produces a variety of auto and truck tires at its Dayton manufacturing plant. The plant is highly automated and uses an activity- based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated with four activity cost pools are given below: 11. If the company had used machine hours as a company-wide allocation base, how much total overhead would have been allocated to the Small Tractor Tires? $21,400 $20,000 $133 O $60,000