Which of the following statements is true regarding current manufacturing companies? Select one: O A. Production processes are simpler than before. B. Most companies produce only a limited variation of products in one facility. C. Materials and wages constitute the largest portions of the per-unit costs. D. None of the above.

Which of the following statements is true regarding current manufacturing companies? Select one: O A. Production processes are simpler than before. B. Most companies produce only a limited variation of products in one facility. C. Materials and wages constitute the largest portions of the per-unit costs. D. None of the above.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 4DQ: In the variable costing income statement, how are the fixed manufacturing costs reported, and how...

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Kindly answer all questions: 1.) Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity. A. True B. False 2.) Which of the following is an example of a cost that is variable with respect to the number of units produced? A. rent on administrative office building B. rent on factory building C. Salaries of top marketing executives D. direct labor cost, where the direct labor force is adjusted to actual production of the period 3.) Fixed costs are constant in total amount over the relevant range of operations. A. True B. False 4.) The cost function derived by the simple least squares method: A. must be tested for minimum and maximum points. B. is parabolic. C. is linear. D. is curvilinear.
Which of the following statements is true for a firm that uses variable costing? A. The cost of a unit of product changes because of changes in number of units manufactured.B. Profits fluctuate with sales.C. An idle facility variation is calculated.D. Product costs include variable administrative costs.
Classify each of the following as direct or indirect with respect to traceability to product and as variable or fixed with respect to whether the costs fluctuate in total as volume of production changes over wide ranges. Explain your classifications. 1. The cost of components that are assembled into a final product. 2. The cost of supplies consumed when maintenance is performed on machines. 3. The wages of machine operators who work on only one product. 4. The cost of training mechanics who service processing machinery. Question content area bottom Part 1 1. The cost of components that are assembled into a final product. Classification Explanation
1.Choose all of the following statements that are true. a. Opportunity costs and sunk costs are not reflected on a firm's financial statements. b. Direct costs are manufacturing costs; indirect costs are non-manufacturing costs. c. Variable costs are always relevant to a decision. d. Under absorption costing, when a firm increases production, but has the same amount of sales, cost of goods sold decreases. e. Job order costing systems are used only in service industries; process costing systems are used only in manufacturing industries. 2.Which of the following are true about cost behavior within a particular relevant range? (Choose all that apply.) a. Variable costs per unit increase as a company produces more units of production. b. Total fixed cost is constant over all units of production. c. Fixed costs per unit decreases as a company produces less units of production. d. The slope of total variable costs is positive over increasing levels of production.
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: $ 74,000 $ 37,500 Direct materials Direct labor $ 17,000 29,500 Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Variable selling expense Fixed selling expense Total selling expense Variable administrative expense Fixed administrative expense Total administrative expense $ 46,500 $ 13,000 20,000 $ 33,000 $ 4,500 26,000 $ 30,500
As a general rule of economics, companies should only produce and sell units as long as ________. A. the revenue from an additional unit exceeds the cost of producing it B. there is customer demand for the product C. there is a relatively small supply of the product when compared to past operating periods D. there is a generous supply of low-cost direct materials
The total cost C for a manufacturer during a given time period is a function of the number N of items produced during that period. To determine a formula for the total cost, we need to know two things. The first is the manufacturer's fixed costs. This amount covers expenses such as plant maintenance and insurance, and it is the same no matter how many items are produced. The second thing we need to know is the cost for each unit produced, which is called the variable cost.The total revenue R for a manufacturer during a given time period is a function of the number N of items produced during that period. The profit P for a manufacturer is the total revenue minus the total cost. If the profit is zero, then the manufacturer is at a break-even point.In general, the highest price p per unit of an item at which a manufacturer can sell N items is not constant but is, rather, a function of N. Suppose the manufacturer of widgets has developed the following table showing the highest price p, in…
Which of the following would be true for a service company? a. ABC helps the company make more informed decisions about services. b. Service companies use only a few activities, so a plantwide overhead allocation is always appropriate. c. Most of the company’s costs are for direct materials and direct labor. Indirect costs are a small proportion of total costs. d. All of the above are true.
Which of the following statements is true for a company that uses variable costing? Profit fluctuates with sales. Product costs include variable administration costs. Any underapplied overhead is included in the product cost. The unit product cost changes because of changes in the number of units manufactured.
Which of the following is true of a company that uses absorption costing? Net operating income fluctuates directly with changes in sales volume. Fixed production and fixed selling costs are considered to be product costs. Unit product costs can change as a result of changes in the number of units manufactured. Variable selling expenses are included in product costs.
Which of the following is unlikely to be classified as a fixed cost with respect to the number of units produced and sold? a Property taves on a headquarters building b. Legal department salaries C. Cost of leasing the company's mainframe computer d. Production supplies
Which one of the following is not an example of a committed fixed cost? None of the given answers. O a. O b. The property taxes of the factory plant. Ос. The cost of the accounting system of the company. d. O d. The salary of the deputy manager of customer call center. O e. The depreciation cost of the Headquarters offices.