Management Accounting_CH_2_MCQS

Multiple Choice Quiz

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1		All of the following would be classified as manufacturing overhead except the:
		A)	wages of supervisor of the machining shop.
		B)	depreciation of the equipment in the machining shop.
		C)	property taxes relating to the building that houses the machining shop.
		D)	All of the above would be classified as manufacturing overhead.
2		All of the following would be classified as product costs except:
		A)	the cost of air-conditioning the factory foreman’s office.
		B)	depreciation on the machinery in the factory.
		C)	the cost of shipping units of product to one of the company’s customers.
		D)	All of the above would be classified as product costs.
3		Within the relevant range:
		A)	both total variable costs and total fixed costs will remain constant.
		B)	both total variable costs and total fixed costs fluctuate.
		C)	fixed costs per unit will remain constant and variable costs per unit will fluctuate.
		D)	variable costs per unit will remain constant and fixed costs per unit will fluctuate.
4		An analysis of a particular cost incurred in a factory revealed that the cost is averages $0.40 per machine-hour at an activity level of 20,000 machine hours and increases to an average of $0.50 per machine hour at an activity level of 16,000 machine hours. Assuming that this activity is within the relevant range, what is the total expected cost if the activity level is 17,300 machine hours?
		A)	$1,600
		B)	$6,960
		C)	$8,000
		D)	$9,000
5		Given the cost formula Y = $30,000 + $5X, total cost at an activity level of 16,000 units would be:
		A)	$30,000.
		B)	$46,000.
		C)	$80,000.
		D)	$110,000.
6		The Sante Company incurred $40,000 to ship 19,000 pounds and $34,000 to ship 16,000 pounds. If the company ships 18,000 pounds, its expected shipping expense is closest to: