Costing U5-2020

Q1 : XYZ has the following cost components for 150,000 units of product for the year:

Direct materials
$300,000
Direct labor
150,000
*Manufacturing overhead
400,000
*Selling and administrative expense
450,000

*All costs are Fixed except for $100,000 of manufacturing overhead and $150,000 of selling and administrative expenses.

The total costs to produce and sell 300,000 units for the year are :

A. $2,600,000

B. $2,000,000

C. $2,350,000

D. $ $2,750,000

Q2 :WZ firm produces 2,000 units and the total cost of production is $40,000. When they increase output to 2,200, the cost rises to $42,000. When the production hinges, the cost is $10,000. What is the fixed cost per unit when they produce 2,100 units?

A. $5

B. $4.76

C. $10,000

D. $15

Q3 : WZ firm produces 2,000 units and the total cost of production is $40,000. When they increase output to 2,200, the cost rises to $42,000. When the Production hinges, the cost is $10,000. What is the variable cost per unit when they produce 2,000 units?

A $ 5

B . $4.76

C. $15

D. $10

Q4 : Discretionary costs are

A. Almost always committed

B. Never fixed

C. Are usually the first costs reduced in a cost reduction program

D. Are unavoidable

Q5 : Management can do very little to reduce these types of costs over the period of the next six months

A. Flexible costs

B. Discretionary costs

C. Committed costs

D. Product costs

Q6 : Which of the following is least likely to be classified as a variable cost?

A. Depreciation on a machine based on how much is produced.

B. Utilities at the manufacturing plant.

C. Supervisors on the production line.

D. Costs to delivery the product to the customer.

Q7 : Which of these costs would be the most difficult to estimate when you know a exactly how many units will be produced?

A. rent

B. Materials used in the product

C. utilities

D. insurance

Q8 : A fixed cost

A. Is set at the beginning of the year and will not change

B. Is fixed for one level of production volumes

C. Will not change directly in proportion to production volume

D. Behaves very similar to costs incurred for material

Q9 : Which of the following is classified as a committed, sunk, fixed expense?

A. Investment in manufacturing equipment

B. advertising

C. Additional maintenance on equipment

D. Employee benefit programs

Q10 : When volume increases, the total cost of a mixed cost

A. Increases by the same percentage as volume increases

B. increases

C. decreases

D. Decreases by the same percentage as the volume increases

Costing U5-2020

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