The opportunity cost of making a product when the manufacturing plant has excess

Question

The opportunity cost of making a product when the manufacturing plant has excess capacity for which there is no alternative use is:

a.) the fixed manufacturing cost of the product
b.) the total manufacturing cost of the product
c.) the variable manufacturing cost of the product
d.) zero

All the following are NOT discretionary fixed costs except:
a.) Insurance
b.) R&D
c.) Utilities
d.) Commissions
e.) Labor
f.) C & D Only

Regression analysis is a statistical tool used to explain:
a.) Where step cost change.
b.) The “best fit” for a line through the data.
c.) Where the relevant range is.
d.) How much variance in the dependent variable is explained by the independent variables.

e.) B & D only

Breakeven point using the contribution margin approach is calculated by:
a.) Adding fixed and variable costs and dividing by the sales price per unit.
b.) Subtracting variable costs from sales price and dividing that number by the selling price per unit.

c.) Subtracting variable costs from the selling price, adding fixed costs, and dividing by the number of units produced.

d.) Subtracting variable costs per unit from selling price per unit and dividing that number into total fixed costs.

e.) A & C only Apple pays its managers $100,000, $200,000, and $300,000 for every 100,000, 200,000, and 300,000 units produced, respectively. Apple’s management costs are:

a.) Fixed
b.) Variable
c.) Step
d.) Mixed

Explanation / Answer

1) A 2) C 3)C 4)D 5)A

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