Accounting 202 Chapter 18 – Flashcards
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Two costs at Bradshaw Company appear below for specific months of operation.
Month Amount Units Produced Delivery costs
September
$40,000
40,000
October
55,000
60,000
Utilities
September
$84,000
40,000
October
126,000
60,000
Which type of costs are these?
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Delivery costs are mixed and utilities are variable.
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The increased use of automation and less use of the work force in companies has caused a trend towards an increase in
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fixed costs and a decrease in variable costs.
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An activity index might be referred to as a cost
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driver
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The relevant range of activity refers to the
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levels of activity over which the company expects to operate.
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Which of the following would be the least controllable fixed costs?
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Property taxes
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Which one of the following is a name for the range over which a company expects to operate?
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Relevant range
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Which of the following is not a mixed cost?
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Depreciation
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If Qualls Quality Airline cuts its domestic fares by 30%,
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a profit can be earned either by increasing the number of passengers or by decreasing variable costs.
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For analysis purposes, the high-low method usually produces a (n)
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reasonable estimate
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In CVP analysis, the term "cost"
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includes manufacturing costs plus selling and administrative expenses
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Which one of the following is not an assumption of CVP analysis?
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All costs are variable costs.
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CVP analysis is not important in
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calculating depreciation expense.
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Which of the following would not be an acceptable way to express contribution margin?
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Sales minus unit costs
