Tri-State Food Service operates six fast food restaurants in the New England area. The company pays rent of $10000 per year for each shop. The managers of each shop are paid a salary of $3200 per month and all other employees are paid on an hourly basis. Relative to the number of hours worked total compensation cost for a particular shop is which kind of cost? (Points : 2) Variable cost
Fixed cost
Mixed cost
None of the above
For Hico Bottling Company the production managers salary is an example of: (Points : 2)
a fixed cost.
a mixed cost.
none of the above.
The fixed cost per unit increases when volume increases.
The fixed cost per unit decreases when volume increases.
The fixed cost per unit does not change when volume decreases.
For Hico Bottling Company the salespersons commissions are an example of: (Points : 2)
a fixed cost.
a mixed cost.
none of the above.
reduce the margin of safety.
increase profit by an amount equal to the per unit contribution margin.
increase the company’s operating leverage.
7500
8333
12500
$200000
$60000
$100000
2.9%
3.4%
37%
$105000
$87500
$90000
double as well.
increase but will not double.
decrease.
What was the percentage change in income from 2009 to 2010? (Points : 2)20% increase
20% decrease
25% decrease
25% increase
machine hours.
square footage occupied.
units sold.
The cost of supplies
The cost of commissions paid to the sales staff
All of the above
net income.
fixed costs.
variable costs.
$175
$160
$205
identify and estimate opportunity costs.
determine the cost of a particular cost object.
set the selling price for a service.
If the company uses direct labor hours as the cost driver what amount of overhead cost will be allocated to Shawls? (Points : 2)$357500
$750000
$470000
$833000
The same cost may be assigned to more than one cost object.
General selling and administrative costs are not assigned to cost objects.
A given cost cannot be driven by more than one cost driver.
Both direct and indirect costs can easily be traced to a cost object.
Neither direct nor indirect costs are easily traced to a cost object.
Indirect costs can be traced easily to a cost object but direct costs cannot be.
Actual costs are useful for evaluating managerial performance.
Actual costs are not relevant in many decisions because actual costs cannot be determined until after the decision has been made.
When accumulating the cost of a specific cost object the indirect costs are traced to the cost object.