Multiple Choice Circle the letter of the choice that best completes the statemen

Question

Multiple Choice Circle the letter of the choice that best completes the statement or answers the question. Transfer answers to a green scantron. 1. Which of the following activity bases would be the most appropriate for food costs of a hospital? a. Number of cooks scheduled to work b. Number of x-rays taken C) Number of patients who stay in the hospital d. Number of scheduled surgeries 2. Costs that vary in total in direct proportion to changes in an activity level are called a fixed costs b. sunk costs c. variable costs d. differential costs 3. Which of the following is an example of a cost that varies in total as the number of units produced changes? a. Salary of a production supervisor c. d. Direct materials cost Property taxes on factory buildings Straight-line depreciation on factory equipment Which of the following costs is a mixed cost? a. b. 4. Salary of a factory supervisor Electricity costs of $3 per kilowatt-hour Rental costs of $10,000 per month plus S.30 per machine hour of use Straight-line depreciation on factory equipment d. 5. Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are: a. $61,875 $33,875 c. $24,750 d. cannot be determined from the data given

Explanation / Answer

Answer:-

1)- The most appropriate activity bases for food costs of a hospital is:

c) No. of patients who stay in the hospital

2)- Cost that vary in total in direct proportion to changes in a activity level are called:-

c)- Variable costs

3)- A cost that varies in total as a number of units produced changes:-

b)- Direct material costs

4)-A mixed cost is:-

c)- Rental costs of $10000 per month plus $.30 per machine hour of use

Explanation:- A cost which is a combination of variable cost & fixed cost called mixed cost.

5)-Under High low method, fixed cost are:-

   Variable cost per unit=Difference in Total cost/ Difference in Production units

=$86625-$49500/4500-1800 = $13.75 per unit

Fixed cost = Total cost – variable cost

                  = $86625- ($13.75 per unit – 4500 units)

                 = $24750 (c)

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