1. Leas Corporation staffs a helpline to answer questions fromcustomers. The costs of operating the helpline are variable withrespect to the number of calls in a month. At a volume of 25,000calls in a month, the costs of operating the helpline total$452,500. To the nearest whole dollar, what should be the totalcost of operating the helpline costs at a volume of 23,900 calls ina month? (Assume that this call volume is within the relevantrange.) (Points : 2) $442,545 $452,500 $473,326 $432,590 2. Withinthe relevant range, as the number of units produced increases:(Points : 2) the variable cost per unit remains the same. fixedcosts in total remain the same. variable costs increase in total.all of these. 3. An understanding of the underlying behavior ofcosts helps in all of the following EXCEPT: (Points : 2) salesvolume can be better estimated costs can be better estimated asvolume expands and contracts true costs of processes can be betterevaluated process inefficiencies can be better identified and, as aresult, improved 4. The following cost data pertain to theoperations of Ladwig Department Stores, Inc., for the month ofDecember. Corporate legal office salaries: $68,000 Shoe Departmentcost of sales: Brentwood Store $66,000 Corporate headquartersbuilding lease: $86,000 Store manager’s salary, Brentwood Store:$10,000 Shoe Department sales commissions, Brentwood Store: $5,000Store utilities, Brentwood Store: $11,000 Shoe Department manager’ssalary, Brentwood Store: $3,000 Central warehouse lease cost:$3,000 Janitorial costs, Brentwood Store: $11,000 The Brentwoodstore is just one of many stores owned and operated by the company.The shoe department is one of the many departments at the Brentwoodstore. The central warehouse serves all of the company’s stores.What is the total amount of the costs listed above that are directcosts of the shoe department? (Points : 2) $66,000 $74,000 $106,000$71,000 5. Mendoza, Inc. manufactures and sells aluminum dishes forcamping and outdoor enthusiasts through a mail order catalogoperation. Large rectangular sheets of aluminum are purchased byMendoza. These sheets are cut down into smaller squares and arethen fed into a machine where they are trimmed down into a circularshape. These aluminum circles are then fed into a stamping machinewhere they are formed into plates and bowls. After production, thedishes are shipped to warehouses where they are packed and thenshipped to customers. Which of the following terms could be used tocorrectly describe the cost of electricity used to run the stampingmachine? (Points : 2) variable cost indirect cost manufacturingoverhead cost All of these 6. A manufacturing plant for Vanguardproduces two product lines: Optimist sailboats and 420 sailboats.An indirect cost for the Optimist line is the: (Points : 2) clothused to make Optimist sails labor to pour 420 hull molds shiftsupervisor for the Optimist line plant supervisor 7. A sunk costis: (Points : 2) a cost that is planned to be incurred in the nearfuture. irrelevant for decision making. a cost connected withdrilling for oil affected by changes in the level of activity. 8.Depreciation of plant facilities is classified as a(n): (Points :2) direct material cost direct labor cost indirect manufacturingcost general and administrative cost 9. Chezpere Companymanufactures and sells washing machines. In order to make assemblyof the machines faster and easier, some of the metal parts in themachines are coated with grease. How should the cost of this greasebe classified? a. Direct Material Cost b. Fixed Cost (Points : 2)a. Yes, b. Yes a. Yes, b. No a. No, b. Yes a. No, b. No 10. Amanufacturing plant produces two product lines: football equipmentand hockey equipment. An indirect cost for the hockey equipmentline is the: (Points : 2) material used to make the hockey stickslabor to bind the shaft to the blade of the hockey stick shiftsupervisor for the hockey line plant supervisor 11. Which of thefollowing production costs, if expressed on a per unit basis, wouldbe most likely to change significantly as the production levelvaries? (Points : 2) Direct materials. Direct labor. Fixedmanufacturing overhead. Responses A and B are both correct. 12. Thecost of the cushions that are used to manufacture sofas is bestdescribed as a: (Points : 2) manufacturing overhead cost. periodcost. variable cost. conversion cost. 13. Cost behavior refers to:(Points : 2) how costs react to a change in the level of activitywhether a cost is incurred in a manufacturing, merchandising, orservice company classifying costs as either product or period costswhether a particular expense has been ethically incurred 14. Costdistortion is common in conventional costing systems because:(Points : 2) of the recent change in cost structure the number ofproducts being manufactured is increasing fixed costs are allocatedusing a volume measure fixed costs create higher risks for acompany 15. A mattress manufacturer has provided the following costdata. The cost of fabric, foam, springs, and lumber is $68,000. Thecost of indirect materials is $21,000. Labor cost of assemblyworkers is $52,000 and for production supervisors is $14,000. Howmuch indirect cost is included in the above costs? (Points : 2)$21,000 $35,000 $89,000 $103,000 16. At a sales volume of 38,000units, Tirri Corporation’s property taxes (a cost that is fixedwith respect to sales volume) total $733,400. To the nearest wholecenter, what should be the average property tax per unit at a salesvolume of 37,300 units? (Assume that this sales volume is withinthe relevant range.) (Points : 2) $19.30 $19.66 $19.72 $19.48 17.Mark is an engineer who has designed a telecommunications device.He is convinced that there is a big potential market for thedevice. Accordingly, he has decided to quit his present job andstart a company to manufacture and market the device. The salarythat Mark earns at his present employ is: (Points : 2) a variablecost a fixed cost a product cost an opportunity cost 18. An exampleof a cost object is: (Points : 2) a bicycle an individual fast foodfranchise the produce department of a grocery store All of theabove are correct. 19. Indirect manufacturing costs: (Points : 2)can be traced to the product that created the costs may have acause-and-effect relationship with capacity rather than withindividual units of production generally include the cost ofmaterial and the cost of labor are included in period costs 20. Howmuch sunk cost is represented in the following list? Annualoperating cost $80,000 Fixed operating costs other thandepreciation $14,000 Resale value, if sold now $25,000 Originalcost of current machine $68,000 (Points : 2) $80,000 $14,000$25,000 $68,000
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