23) Deidoro Company has provided the following data for maintenance cost:
Prior Year
Current Year
Machine hours
8,000
10,000
Maintenance cost
$
26,600
$
31,000
Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable
components of maintenance cost are closest to:
A) $26,600 per year; $3.10 per machine hour
B) $9,000 per year; $2.20 per machine hour
C) $9,000 per year; $3.10 per machine hour
D) $26,600 per year; $2.20 per machine hour
High level of activity
10,000
31,000
Low level of activity
26,600
Change
24) Caraco Corporation has provided the following production and average cost data for two
levels of monthly production volume. The company produces a single product.
Production volume
7,000
units
8,000
units
Direct materials
$
87.40
per unit
$
87.40
per unit
Direct labor
$
20.20
per unit
$
20.20
per unit
Manufacturing overhead
$
101.50
per unit
$
90.80
per unit
The best estimate of the total cost to manufacture 7,300 units is closest to:
A) $1,487,375
B) $1,448,320
C) $1,500,750
D) $1,526,430
25) A soft drink bottler incurred the following factory utility cost: $9,246 for 5,200 cases bottled
and $8,997 for 4,900 cases bottled. Factory utility cost is a mixed cost containing both fixed and
variable components. The variable factory utility cost per case bottled is closest to:
A) $1.81
B) $1.78
C) $1.84
D) $0.83
26) Andom Corporation has provided the following production and average cost data for two
levels of monthly production volume. The company produces a single product.
Production volume
1,000
units
2,000
units
Direct materials
$
15.20
per unit
$
15.20
per unit
Direct labor
$
30.50
per unit
$
30.50
per unit
Manufacturing overhead
$
54.10
per unit
$
37.40
per unit
The best estimate of the total monthly fixed manufacturing cost is:
A) $74,800
B) $54,100
C) $99,800
D) $33,400
27) The following data pertains to activity and maintenance cost for two recent periods:
Activity level (units)
8,000
7,000
Maintenance cost
$
34,000
$
31,500
Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low
method, the cost formula for maintenance cost is:
A) Y = $4.25 X
B) Y = $14,000 + $2.50 X
C) Y = $2,500 + $4.25 X
D) Y = $4.50 X
High level of activity
8,000
Low level of activity
7,000
Change
1,000
2,500
28) Farac Corporation has provided the following production and total cost data for two levels of
monthly production volume. The company produces a single product.
Production volume
4,000
units
5,000
units
Direct materials
$
208,800
$
261,000
Direct labor
$
119,200
$
149,000
Manufacturing overhead
$
319,200
$
329,500
The best estimate of the total cost to manufacture 4,300 units is closest to:
A) $674,890
B) $665,855
C) $695,740
D) $635,970
29) The following data pertains to activity and utility cost for two recent periods:
Activity level (units)
15,000
12,000
Utility cost
$
24,750
$
21,000
Utility cost is a mixed cost with both fixed and variable components. Using the high-low
method, the cost formula for utility cost is:
A) Y = $1.65 X
B) Y = $1.75 X
C) Y = $3,750 + $1.75 X
D) Y = $6,000 + $1.25 X
Utility Cost
High level of activity
15,000
24,750
Low level of activity
12,000
21,000
Change
30) Dacosta Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product.
Production volume
6,000
units
7,000
units
Direct materials
$
369,600
$
431,200
Direct labor
$
309,600
$
361,200
Manufacturing overhead
$
919,800
$
937,300
The best estimate of the total monthly fixed manufacturing cost is:
A) $1,599,000
B) $1,664,350
C) $814,800
D) $1,729,700
31) Seifer Inc.’s inspection costs are listed below:
Units Produced
Inspection
Costs
April
119
$
8,558
May
117
$
8,535
June
113
$
8,415
July
125
$
8,736
August
152
$
9,357
September
108
$
8,320
October
120
$
8,603
November
192
$
10,337
Management believes that inspection cost is a mixed cost that depends on the number of units
produced. Using the least-squares regression method, the estimates of the variable and fixed
components of inspection cost would be closest to:
A) $24.08 per unit plus $5,709 per month
B) $67.74 per unit plus $8,858 per month
C) $24.37 per unit plus $5,658 per month
D) $24.01 per unit plus $5,727 per month
Intercept
$
5,709
Fixed cost
Slope
$
24.08
Variable cost
32) Your boss would like you to estimate the fixed and variable components of a particular cost.
Actual data for this cost over four recent periods appear below.
Activity
Cost
Period 1
22
$
121
Period 2
28
$
132
Period 3
21
$
117
Period 4
29
$
134
Using the least-squares regression method, what is the cost formula for this cost?
A) Y = $75.89 + $1.02X
B) Y = $72.64 + $2.13X
C) Y = $ 0.00 + $5.04X
D) Y = $75.50 + $2.02X
Intercept
Slope
33) The management of Hamano Corporation would like for you to analyze their repair costs,
which are listed below:
Machine-
Hours
Repair
Costs
April
4,459
$
98,523
May
4,426
$
98,296
June
4,493
$
98,781
July
4,417
$
98,207
August
4,432
$
98,349
September
4,446
$
98,420
October
4,489
$
98,749
November
4,475
$
98,654
Management believes that repair cost is a mixed cost that depends on the number of machine-
hours. Using the least-squares regression method, the estimates of the variable and fixed
components of repair cost would be closest to:
A) $22.11 per machine-hour plus $98,497 per month
B) $7.37 per machine-hour plus $65,670 per month
C) $8.19 per machine-hour plus $62,015 per month
D) $7.55 per machine-hour plus $64,859 per month
Intercept
$
Fixed cost
Slope
$
Variable cost
34) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per
unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000
unit level of activity. Assume that the relevant range includes all of the activity levels mentioned
in this problem.
What would be the competitor’s prediction of variable cost per unit for Matthew Corporation?
A) $1.30
B) $0.77
C) $1.50
D) $1.45
35) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per
unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000
unit level of activity. Assume that the relevant range includes all of the activity levels mentioned
in this problem.
What would be the competitor’s prediction of total fixed cost per period?
A) $22,500
B) $28,000
C) $13,600
D) $ 3,000
36) One of Matthew Corporation’s competitors has learned that Matthew has a total expense per
unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000
unit level of activity. Assume that the relevant range includes all of the activity levels mentioned
in this problem.
What would be the competitor’s prediction of total expected costs at 18,000 units?
A) $16,860
B) $26,400
C) $29,100
D) $30,000
37) The following production and average cost data for two levels of monthly production volume
have been supplied by a company that produces a single product:
Production volume
2,000
units
4,000
units
Direct materials
$
88.40
per unit
$
88.40
per unit
Direct labor
$
20.60
per unit
$
20.60
per unit
Manufacturing overhead
$
86.90
per unit
$
55.30
per unit
The best estimate of the total monthly fixed manufacturing cost is:
A) $221,200
B) $391,800
C) $173,800
D) $126,400
38) The following production and average cost data for two levels of monthly production volume
have been supplied by a company that produces a single product:
Production volume
2,000
units
4,000
units
Direct materials
$
88.40
per unit
$
88.40
per unit
Direct labor
$
20.60
per unit
$
20.60
per unit
Manufacturing overhead
$
86.90
per unit
$
55.30
per unit
The best estimate of the total variable manufacturing cost per unit is:
A) $132.70
B) $88.40
C) $23.70
D) $109.00