Q1. In making a decision about which piece of equipment to buy, two types of cos
ID: 2714481 • Letter: Q
Question
Q1. In making a decision about which piece of equipment to buy, two types of costs are considered. They are relevant and:
Sunk
Fixed
Irrelevant
Controllable
Q2. An objective of internal control is to:
Eliminate collusion
Prevent employees from having access to cash
Provide 24-hour policing of employees
Safeguard the assets
Q3. The following refers to Dine well Restaurant Company's January financial information. Dinewell had $17,200 of food purchases for the month. The ending food inventory was $3,800 and the beginning food inventory was $4,200. There was an employee meal credit for $2,300. Total food sales for the month were $49,000. Calculate:
Total Food Available
Total Food Used
Cost of Food Sold
Cost of Food Sold as a Percentage of Total Food Sales
Total Food Available: $21,400
Total Food Used: $16,200
Cost of Food Sold: $13,900
Cost of Food Sold as a Percentage of Total Food Sales: 28.4%
Total Food Available: $22,400
Total Food Used: $18,600
Cost of Food Sold: $16,300
Cost of Food Sold as a Percentage of Total Food Sales: 33.3%
Total Food Available: $21,400
Total Food Used: $17,600
Cost of Food Sold: $15,300
Cost of Food Sold as a Percentage of Total Food Sales: 31.2%
Total Food Available: $20,500
Total Food Used: $16,700
Cost of Food Sold: $14,400
Cost of Food Sold as a Percentage of Total Food Sales: 31.2%
Q4. Standard costs:
Are what the costs should be for a particular level of sales revenue
Are not relevant in decision-making
Are the same as variable costs
Must be broken down into their fixed and variable elements
Q5. A restaurant has two departments, food and beverage. Food occupies 4,200 square feet and the beverage department occupies 1,800 square feet. Indirect costs of $34,000 are to be allocated based on square footage to each department. What is the amount of indirect costs allocated to each department?
Food: $27,800
Beverage: $9,200
Food: $20,800
Beverage: $13,200
Food: $21,800
Beverage: $12,200
QUESTION 6
1. Contributory incomes are:
departmental incomes before deduction of indirect expenses
the same as gross margin
sales revenues less indirect expenses
income before income tax
QUESTION 7
1. Using the high-low method, what are the fixed and variable costs if the high sales revenue is $160,000 with total costs of $90,000, and the low sales revenue is $96,000 with total costs of $58,000. What is the fixed cost and the variable percentage per dollar of sales revenue?
$9,750 fixed and 32.5% per dollar of sales revenue
$10,000 fixed and 50.0% per dollar of sales revenue
$6,750 fixed and 32.5% per dollar of sales revenue
$4,240 fixed and 56.0% per dollar of sales revenue
QUESTION 8
1. Average check is calculated by dividing:
Sales revenue for a period by the number of guests served during that period
Annual sales revenue by 365
Sales revenue for a period by the number of guests served during that period and multiplying by 100
Sales revenue for a period into the number of guests during that period
QUESTION 9
1. Indirect costs should be allocated to operating departments:
Because otherwise the departmental income after deducting direct costs will be incorrect
To insure that each department has a net income after deducting both direct and indirect costs
Pro-rata according to sales revenue in each department.
Only after careful analysis of each cost to ensure the allocation is correct.
QUESTION 10
1. If a restaurant reported monthly sales revenue of $47,250, cost of sales $18,900 and 4,200 guests were served, what is the cost of sales per guest and the cost percentage?
$4.50 and 40.0%
$4.75 and 40.0%
$5.00 and 42.0%
$5.50 and 42.0%
QUESTION 11
1. One can sell below cost when the sales revenue:
Would otherwise go to a competitor
Is below total cost but covers variable costs and contributes towards fixed costs
Covers fixed costs but not necessarily all variable costs
Covers all direct costs
QUESTION 13
1. Average room rate for a motel is $80.00. Occupancy is 60%. The motel has 80 rooms. Double occupancy rate is 50%. Spread between single and double rates is $5.00. The average single rate is:
$70.00
$77.50
$93.32
$73.32
QUESTION 14
1. An operation should close during the off season when:
Variable costs are higher than fixed costs
The lost sales revenue would be higher than total costs
A net loss would be eliminated
The net loss to be eliminated is greater than the remaining fixed costs
QUESTION 15
1. A food service department has sales revenue of $690,000 and a beverage department has sales revenue of $220,000. Indirect costs total $52,000 and are to be allocated based on sales revenue to both departments. Calculate the amount of total indirect costs to be allocated to each department.
Food: $41,416
Beverage: $10,584
Food: $39,429
Beverage: $12,571
Food: $37,416
Beverage: $14,584
Food: $38,416
Beverage: $13,584
QUESTION 16
A restaurant has sales revenue of $580,000 with variable cost of sales of 42%. Fixed costs are $245,920. The owner wants a $46,000 after tax return based on a tax rate of 32%. What is the income tax?
$16,941
$17,882
$21,647
$22,118
QUESTION 17
1. Using the high-low method, what are the fixed and variable costs if the maximum covers served was 54,000 with a $69,800 labor cost, and minimum guests served was 25,600 with labor cost of $42,800?
$10,832 fixed and $1.08 per guest
$18,475 fixed and $0.94 per guest
$10,832 fixed and $0.84 per guest
None of the above answers are correct
5 points
QUESTION 18
1. The main purpose of calculating a standard food cost percentage is to:
Knowing in advance what the actual food cost will be
Be able to calculate the food cost each day
Have a figure against which actual food cost can be compared
Be able to calculate in advance what the gross profit will be
5 points
QUESTION 19
1. Variable costs:
Decrease 10% if sales revenue increases 10%
Are generally fixed in the short run
Vary in a linear fashion with sales revenue
Are the same as indirect costs
5 points
QUESTION 20
1. Gross margin is:
income before income tax
sales revenue less indirect expenses
sales revenue less cost of sales
sales revenue less direct expenses
Eliminate collusion
Prevent employees from having access to cash
Provide 24-hour policing of employees
Safeguard the assets
Q3. The following refers to Dine well Restaurant Company's January financial information. Dinewell had $17,200 of food purchases for the month. The ending food inventory was $3,800 and the beginning food inventory was $4,200. There was an employee meal credit for $2,300. Total food sales for the month were $49,000. Calculate:
Total Food Available
Total Food Used
Cost of Food Sold
Cost of Food Sold as a Percentage of Total Food Sales
Total Food Available: $21,400
Total Food Used: $16,200
Cost of Food Sold: $13,900
Cost of Food Sold as a Percentage of Total Food Sales: 28.4%
Total Food Available: $22,400
Total Food Used: $18,600
Cost of Food Sold: $16,300
Cost of Food Sold as a Percentage of Total Food Sales: 33.3%
Total Food Available: $21,400
Total Food Used: $17,600
Cost of Food Sold: $15,300
Cost of Food Sold as a Percentage of Total Food Sales: 31.2%
Total Food Available: $20,500
Total Food Used: $16,700
Cost of Food Sold: $14,400
Cost of Food Sold as a Percentage of Total Food Sales: 31.2%
Explanation / Answer
3 answer
Total Food Available: $21,400
Total Food Used: $17,600
Cost of Food Sold: $15,300
Cost of Food Sold as a Percentage of Total Food Sales: 31.2%
workings
1 In making a decision about which piece of equipment to buy, two types of costs are considered. They are relevant and Controllable 2 An objective of internal control is to: Safeguard the assets 3 4 Are what the costs should be for a particular level of sales revenue Are what the costs should be for a particular level of sales revenueRelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.