1. Which of the following is a variable cost for a furniture manufacturer?

   		straight line depreciation on the factory equipment
   		salary of the vice president
   		wood used to make dining tables
   		real estate tax on the factory property

1. Which of the following costs change on a per unit basis as volume changes?

   		variable costs
   		direct materials
   		direct labor
   		fixed costs

1. Based on the following, calculate the pre-determined overhead rate.

   Summer 20 Company allocates overhead using a single plant wide rate with direct labor cost as the base. The company manufactures two types of suitcases, Basic and Plus.

   Total estimated overhead cost for the year					$40,000
   Estimates for the year				Basic	Plus
   Direct Materials cost per unit				$35	$42
   Direct Labor cost per unit				$53	$61
   Number of units				530	380

   		78.02%
   		28.42%
   		128.18%
   		38.56%

Calculate the Contrinbution Margin using Variable Costing.
Sales Revenue				$400,000
Variable Cost of Goods Sold				$82,000
Variable Selling & Administrative Costs				$51,000
Fixed Cost of Goods Sold				$30,000
Fixed Selling & Administrative Costs				$18,000

		$219,000
		$267,000
		$288,000
		$400,000

Which statement is false regarding the high low method?

		The high low method uses at least 10 data points in the calculations for change in cost divided by change in activity.
		The high low method is considered an easy way to separate a mixed cost into its fixed and variable components.
		The high low method uses the change in cost divided by the change in volume (activity) to compute variable cost per unit.
		The high low method uses mixed cost minus total variable cost to calculate fixed cost.