ACCT 304 Final Exam 100% Correct Answers
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ACTIVITY BASED COSTING
1. If a predetermined overhead rate is not employed and the volume of production is increased over the level planned, the cost per unit would be expected to
A. Decrease for fixed costs and remain unchanged for variable costs.
B. Remain unchanged for fixed costs and increase for variable costs.
C. Decrease for fixed costs and increase for variable costs.
D. Increase for fixed costs and increase for variable costs.
1. If fixed costs decrease while variable cost per unit remains constant, the contribution margin will be
A. Unchanged C. Higher
B. Lower D. Indeterminate
1. The high-low method is criticized because it
A. is not a graphical method.
B. is a mathematical method.
C. ignores much of the available data by concentrating on only the extreme points.
D. does not provide reasonable estimates.
1. [i]. The controller of Jema Company has requested a quick estimate of the manufacturing supplies that it needs for the month of July when the expected production are 470,000 units. Below are the actual data from the prior three months of operations.
Production in units Manufacturing supplies
March 450,000 P723,060
April 540,000 853,560
May 480,000 766,560
Using these data and the high-low method, what is the reasonable estimate of the cost of manufacturing supplies that would be needed for July? (Assume that this activity is within the relevant range.)
A. P 805,284…