Posted: September 16th, 2017
Saint MBA560 week 6 quiz (100% correct)
Hico Bottling Company pays its production manager a salary of $5,000 per month. Salespersons are paid strictly on commission, at $2 for each case of product sold.
For Hico Bottling Company, the salespersons’ commissions are an example of: (Points : 2)
a variable cost.
a fixed cost.
a mixed cost.
none of the above.
For Hico Bottling Company, the salespersons’ commissions are an example of: (Points : 2)
a variable cost.
a fixed cost.
a mixed cost.
none of the above.
Java Joe’s operates a chain of coffee shops. The company pays rent of $12,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The manager of each shop is paid a salary of $2,000 per month, and all other employees are paid on an hourly basis. Relative to the number of customers for a shop, the cost of rent is which kind of cost? (Points : 2)
Fixed cost
Variable cost
Mixed cost
Relevant cost
Fixed cost
Variable cost
Mixed cost
Relevant cost
Hard Nails and Bright Nails are competing nail salons. Both companies have the same number of customers. Both charge the same price for a manicure. The only difference is that Hard Nails pays its manicurists on a salary basis (i.e., a fixed cost structure) while Bright Nails pays its manicurists on the basis of the number of customers they serve (i.e., a variable cost structure). Both companies currently make the same amount of net income. If sales of both salons increase by an equal amount, Hard Nails: (Points : 2)
will earn a lower profit than Bright Nails.
will earn a higher profit than Bright Nails.
will earn the same amount of profit as Bright Nails.
The answer cannot be determined from the information provided.
will earn a lower profit than Bright Nails.
will earn a higher profit than Bright Nails.
will earn the same amount of profit as Bright Nails.
The answer cannot be determined from the information provided.
Felix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company’s fixed costs are $60,000. What is the breakeven point measured in sales dollars? (Points : 2)
$240,000
$120,000
$80,000
$100,000
$240,000
$120,000
$80,000
$100,000
The following income statement is provided for Flint, Inc. Sales revenue (2,500 @ $20 a unit)
$50,000
Variable costs (2,500 x $11)
27,500
Fixed costs
17,000
Net income
$ 5,500
What is this company’s magnitude of operating leverage? (Points : 2)
9.1
5.00
4.1
1.8
| Ransom Manufacturing Company operates its three production departments within a single facility. Each department produces its own products and maintains its own production equipment. Although they share a common facility, each department is overseen by separate supervisor. Which one of the following costs is a direct cost of each department? (Points : 2) Lease payment on facility Depreciation on the facility Plant manager salary Cost of goods sold Which of the following is not an example of a cost object and its related cost driver? Row Wall Company incurred $30,000 of fixed cost and $40,000 of variable cost when 1,000 units of product were made and sold. If the company’s volume doubles, the cost per unit will: (Points : 2) The KnitWitt Corporation manufactures knitted shawls and scarves. The company expects to incur $1,500,000 in overhead costs during 2010. The following budget information is for 2010: Shawls If the company uses direct labor hours as the cost driver, what amount of overhead cost will be allocated to Shawls? (Points : 2)
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