Daniel is planning to rent a car for an upcoming four-day business trip. The car rental agency charges a flat fee of $29 per day plus $0.12 per mile driven. Daniel plans to drive 140 miles on Day 1 of his trip, 15 miles on Day 2, 15 miles on Day 3, and 14
$37.20
Which best describes what happens to the variable cost per unit if it is within the relevant range?
It remains constant at each activity level.
The Gabbana Company's maintenance costs are a mixed cost. At the low level of activity (40 direct labor hours), maintenance costs are $600. At the high level of activity (100 direct labor hours), maintenance costs are $1,100. Using the high-low method, th
$8.33; $267.
In order to remain competitive, Big Bus Lines must reduce its average ticket price by 15%. However, the firm still wants to remain profitable. Which of the following options would allow Big Bus Lines to remain profitable while dropping its ticket prices?
decreasing its variable costs by at least 15%
________ is an underlying assumption of cost-volume-profit analysis.
All costs can be classified as either variable or fixed with reasonable accuracy
If a product's variable cost per unit increases but its unit selling price remains constant, then the product's unit contribution margin
will decrease.
: BrewCo sells coffeemakers for $120 each. The firm currently has variable costs per unit of $65. If BrewCo is able to reduce its variable cost per unit to $58, its contribution margin ratio will
increase by about 6 percent.
If ________, then the contribution margin ratio will increase.
variable costs as a percentage of sales decrease
When unit selling price remains the same and ________, then the contribution margin per unit decreases.
variable costs per unit increase
Which of the following is a formula for break-even point in sales dollars?
fixed costs divided by contribution margin ratio
Livingston Co. has fixed costs of $60,000 and a contribution margin ratio of 30%. To break even, Livingston Co. needs ________ in dollar sales.
200,000
Gulph Company reported the following results from the sale of 5,000 hammers in May: sales $200,000, variable costs $120,000, fixed costs $60,000, and net income $20,000. If Gulph increases the selling price of hammers by 10% on June 1, then ________ hamme
4,000
Lagerfeld Company had actual sales of $800,000 when break-even sales were $600,000. The margin of safety ratio is
25%
Duck Manufacturing sells rubber rain boots for $50 per pair. In 20x4, the firm had fixed costs of $312,000 and variable costs of $24 per pair, and it expects these figures to remain the same in 20x5. In 20x4, Duck's total sales were $900,000, and the comp
1.8
Duck Manufacturing sells rubber rain boots for $50 per pair. In the coming year, the firm expects to have fixed costs of $312,000 and variable costs of $24 per pair. If Duck wants to earn net income of $364,000 in the year ahead, what are the firm's requi
$1,300,000
Which of the following represents the flow of budget data under participative budgeting?
Department Manager to Plant Manager to Vice President of Production
In order to assure better management acceptance, the flow of input data for budgeting should begin with the
lower level of management
Coordinating the preparation of the budget is the responsibility assigned to the
budget committee
The Burlington Company has 12,000 units in beginning finished goods. If sales are expected to be 60,000 units for the year and Burlington desires ending finished goods of 15,000 units, how many units must Burlington produce?
63,000.
Why?
(12,000-60,000+15,000).
The Crawford Company has 3,000 units in beginning finished goods. The sales budget shows expected sales to be 12,000 units. If the production budget shows that 14,000 units are required for production, what was the desired ending finished goods?
5,000
(3,000-12,000+14,000).
In the Progressa Company required production for June is 44,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 100,000 and 110,000 pound
142,000.
Why?
(44,000 x 3) = 132,000.
(100,000 - 132,000) = -32,000.
(-32,000 + 32,000 + 32,000 + 110,000) = 142,000.
James Company determines that 13,500 pounds of direct materials are needed for production in July. There are 800 pounds of direct materials on hand at July 1 and the desired ending inventory is 700 pounds. If the cost per pound of direct materials is $3,
$40,200
Rose Company is preparing its direct labor budget for May. Projections for the month are that 8,350 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $9, what is the total budgeted direct labor cost
$225,450.
Why?
(8,350 x 3) = 25,050
(25,050 x 9) = 225,450
Toledo Manufacturing has the following variable overhead costs:
Indirect materials: $2.18/hour
Indirect labor: $3.26/hour
Utilities: $0.90/hour
Maintenance: $0.33/hour
Direct labor hours: 14,500
If Toledo decides that they need to increase their indirect
1,015
Dobbins Resources pays sales commissions of $2 per unit and shipping costs of $0.75 per unit. If Dobbins expects to sell 12,000 units in the third quarter, what will their total variable expenses be?
33,000
When they made their master budget, Vann Enterprises had direct material per unit costs of $12.43, direct labor per unit costs of $8.46, and manufacturing overhead per unit costs of $14.29. They planned to sell 16,000 units in the first quarter. However,
39,605 increase
On January 1, Scarlett Company has a beginning cash balance of $21,000. During the year, the company expects cash disbursements of $170,000 and cash receipts of $145,000. If Scarlett requires an ending cash balance of $20,000, the Scarlett Company must bo
24,000
The Eccleston Company has the following budgeted sales: January $40,000, February $60,000, and March $50,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The to
53,000
The Brenneman Company's direct materials budget shows total cost of direct materials purchases for January $125,000, February $150,000 and March $175,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash pay
$165,000
Which line items of the budgeted balance sheet are calculated based on operating budgets?
finished goods inventory, raw materials inventory, and retained earnings
A purchases budget is used instead of a production budget by
Merchandising companies
Katie's Cleaning Service has cleaning contracts for 15 apartments, 45 family homes, and 25 office buildings. She estimates that an apartment takes 4 hours to clean, a home takes 6 hours to clean, and an office building takes 10 hours to clean. Katie pays
29,000
City Mission is a not-for-profit organization that provides hot meals, living quarters, and showers for homeless people. Based on their yearly budget, they expect to spend $450,000 on food expenses, $350,000 on housing expenses, $280,000 on staff salaries
at least $1,288,000
Which of the following statements is correct?
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