Question 1 You have been asked to predict the first quarter of cost for water and sewage based on…
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Question
1
You have been asked to predict the
first quarter of cost for water and sewage based on the past 12 months of
activity as listed below. You know that the water and sewage cost is both
fixed and variable each month. Using the High Low Method to seperate variable
and fixed costs, answer the questions below:
Month
Gallons Used
Cost
January
2,500
775.0
February
2,200
754.0
March
2,100
747.0
April
2,100
726.0
May
2,600
782.0
June
2,700
789.0
July
2,900
803.0
August
3,100
817.0
September
2,800
796.0
October
2,500
775.0
November
2,200
754.0
December
2,000
740.0
Using the High-Low method, calculate the variable cost
per gallon of water used.
A.
.09
B.
.07
C.
.10
D.
.05
10 points
Question
2
Based on the information above, calculate the fixed
cost each month.
$600.00
$250.10
$500.10
$400,89
10 points
Question
3
If you project that you will use 2,650 galllons of
water in the month of January, estimate the total variable cost for the
month of January.
A.
$190.00
B.
$185.50
C.
$1,890.21
D.
$2,900.30
10 points
Question
4
If you project that you will use 2,650
galllons of water in the month of January, estimate the fixed cost for the
month of January.
A.
$500.00
B.
$200.00
C.
$600.00
D.
$450.00
10 points
Question
5
If you project that you will use 2,650
galllons of water in the month of January, estimate the total water and
sewage cost for the month of January.
A.
$710.30
B.
$685.00
C.
$785.50
D.
$710.24
10 points
Question
6
Costs arising from the possession of facilities,
equipment and a basic organizational structure are ________.
capacity costs
discretionary costs
committed fixed costs
engineered costs
10 points
Question
7
Due to the economic downturn, a company has reduced
charitable donations to community groups. This is an example of a
________.
variable cost
committed fixed cost
capacity cost
discretionary fixed cost
10 points
Question
8
If a company eliminates all discretionary costs due to
a severe recession, this could ________.
ensure that the company reports a
net loss
ensure that the company reports a
net profit
reestablish a company’s
competitive position in an industry
impair a company’s competitive
position in an industry
10 points
Question
9
In a corporate setting, property taxes are an example
of a(n) ________.
mixed cost
committed fixed cost
discretionary fixed cost
engineering cost
10 points
Question
10
Which statement regarding fixed costs is TRUE?
Discretionary fixed costs preserve
management’s flexibility.
Committed fixed costs preserve
management’s flexibility.
Both discretionary and committed
fixed costs preserve management’s flexibility.
Discretionary fixed costs limit
management’s flexibility.
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