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Chapters 1-4 The Accounting Cycle
Chapters 5-8 Current Assets
Chapters 9-11 Long-Term Assets
Chapters 12-14 Liabilities/Equities
Chapters 15-16 Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20 Managerial/Cost
Chapters 21-24 Budgeting/Decisions

Chapter 18 - Multiple Choice

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Chapter 18 – Multiple Choice

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Question 1 of 8

1. Question
Costs that do not change when the activity base fluctuates are known as:
- Variable costs
- Discretionary costs
- Fixed costs
- Mixed costs
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Question 2 of 8

2. Question
If one would prepare a graph with a horizontal axis representing units of production and a vertical axis representing per-unit production cost, how would a line representing fixed production cost be drawn?
- As a horizontal line
- As a vertical line
- As a straight line sloping upward to the right
- As a straight line sloping downward to the right
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Question 3 of 8

3. Question
The term “committed costs” refers to those:
- Costs which are likely to respond to additional sales volume.
- Costs which are governed mainly by past decisions that establish the present level of capacity.
- Costs which fluctuate in response to changes in the rate of utilization of capacity.
- Costs which management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers.
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Question 4 of 8

4. Question
Lansing Corporation provides household painting services. During June, its busiest month, Lansing had total direct labor hours of 20,000 and total costs of $274,000. During December, its slowest month, the company had direct labor hours of 12,500 and total costs of $214,000. The company is planning for 16,000 direct labor hours in July. How many dollars should the company budget for fixed costs during July?
- $114,000
- $162,000
- $242,000
- $251,500
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Question 5 of 8

5. Question
Moore Company reported sales of $150,000 (20,000 units). Fixed costs amounted to $20,000 and income for the period was $90,000. Determine the per-unit variable cost.
- $1.00
- $2.00
- $4.50
- $5.50
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Question 6 of 8

6. Question
Blackhat Chimney Builders constructed 80 units during 19X1. The total sales value for these 80 units was $460,000. Variable costs associated with each unit was $4,000 and the company’s fixed costs for 19X1 amounted to $50,000. How much was the per-unit contribution margin?
- $750
- $1,125
- $1,750
- $5,125
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Question 7 of 8

7. Question
The Rug Outlet Store produces two products, carpet and padding. These account for 40% and 60% of the total sales dollars of the company, respectively. Variable costs (as a percentage of sales dollars) are 40% for carpet and 50% for padding. Total fixed costs are $540,000. No other costs are expected to be incurred. How much is the company’s total break-even point in sales dollars?
- $540,000
- $964,285
- $1,000,000
- $1,173,913
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Question 8 of 8

8. Question
Which of the following factors would cause the break-even point to change?
- Increased sales volume.
- Fixed costs increased due to addition of physical plant.
- Total variable costs increased as a function of higher production.
- Total production decreased.
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Chapters 1-4
Chapters 5-8
Chapters 9-11
Chapters 12-14
Chapters 15-16
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20
Chapters 21-24
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