Test Bank for Fundamental Managerial Accounting Concepts, 15th Edition by Edmonds, All Chapters

DOWNLOAD THE Test Bank for Fundamental Managerial Accounting Concepts 9th E
k k k k k k k k k k

dition Edmonds k




FundamentalkManagerialkAccountingkConcepts,k9ek(Edmonds)
Chapterk2k k CostkBehavior,kOperatingkLeverage,kandkProfitabilitykAnalysis

1) JavakJoekoperateskakchainkofkcoffeekshops.kThekcompanykpayskrentkofk$20,000kperkyearkforkeachks
hop.kSuppliesk(napkins,kbags,kandkcondiments)karekpurchasedkaskneeded.kThekmanagerkofkeachksho
pkiskpaidkaksalarykofk$3,000kperkmonth,kandkallkotherkemployeeskarekpaidkonkankhourlykbasis.kRelativ
ektoktheknumberkofkcustomerskforkakshop,kthekcostkofksupplieskiskwhichkkindkofkcost?
A) Fixedkcost
B) Variablekcost
C) Mixedkcost
D) Relevantkcost

Answer:k B
Explanation:k Whenkthekvolumekincreases,kthektotalkcostkofksupplieskincreases;kwhenkvolumekdecre
ases,kthektotalkdecreases;kasksuch,kthekcostkofksupplieskiskakvariablekcost.
Difficulty:k2kMedium
Topic:k VariablekCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Understand
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking

2) Selectkthekcorrectkstatementkregardingkfixedkcosts.
A) Becausektheykdoknotkchange,kfixedkcostskshouldkbekignoredkinkdecisionkmaking.
B) Thekfixedkcostkperkunitkdecreaseskwhenkvolumekincreases.
C) Thekfixedkcostkperkunitkincreaseskwhenkvolumekincreases.
D) Thekfixedkcostkperkunitkdoesknotkchangekwhenkvolumekdecreases.

Answer:k B
Explanation:k Thektotalkamountkofkakfixedkcostkdoesknotkchangekwhenkvolumekchanges.kInkcontrast
,kfixedkcostkperkunitkisknotkfixed.kItkchangeskaskthekvolumekchanges.kThekfixedkcostkperkunitkdecreas
eskwhenkvolumekincreaseskandkthekfixedkcostkperkunitkincreaseskwhenkvolumekdecreases.
Difficulty:k1kEasy
Topic:k FixedkCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Remember
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking




1
Copyrightk2020k©kMcGraw-
HillkEducation.kAllkrightskreserved.kNokreproductionkorkdistributionkwithoutkthekpriorkwrittenkconsentkofkMcGraw-
HillkEducation.
mynursytest.store

,DOWNLOAD THE Test Bank for Fundamental Managerial Accounting Concepts 9th E
k k k k k k k k k k

dition Edmonds k




3) Larry'skLawnkCarekincursksignificantkgasolinekcosts.kThiskcostkwouldkbekclassifiedkaskakvariablekc
ostkifkthektotalkgasolinekcost:
A) varieskinverselykwithktheknumberkofkhoursktheklawnkequipmentkiskoperated.
B) isknotkaffectedkbyktheknumberkofkhoursktheklawnkequipmentkiskoperated.
C) increaseskinkdirectkproportionktoktheknumberkofkhoursktheklawnkequipmentkiskoperated.
D) Nonekofkthesekarekcorrect.

Answer:k C
Explanation:k Thekgasolinekcostkwouldkbekclassifiedkaskvariablekifkthektotalkgasolinekcostkincreaseskw
henkthekvolumekincreaseskandkthektotalkgasolinekcostkdecreaseskwhenkthekvolumekdecreases.
Difficulty:k2kMedium
Topic:k VariablekCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Understand
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking

4) Selectkthekcorrectkstatementkregardingkfixedkcosts.
A) Therekiskakcontradictionkbetweenkthektermk"fixedkcostkperkunit"kandkthekbehaviorkpatternki
mpliedkbykthekterm.
B) Fixedkcostkperkunitkisknotkfixed.
C) Totalkfixedkcostkremainskconstantkwhenkvolumekchanges.
D) Allkofkthesekarekcorrectkstatements.

Answer:k D
Explanation:k Thektotalkamountkofkakfixedkcostkdoesknotkchangekwhenkvolumekchanges.kInkcontrast
,kfixedkcostkperkunitkisknotkfixed.kItkchangeskaskthekvolumekchanges.kThekfixedkcostkperkunitkdecreas
eskwhenkvolumekincreaseskandkthekfixedkcostkperkunitkincreaseskwhenkvolumekdecreases.
Difficulty:k1kEasy
Topic:k FixedkCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Remember
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking




2
Copyrightk2020k©kMcGraw-
HillkEducation.kAllkrightskreserved.kNokreproductionkorkdistributionkwithoutkthekpriorkwrittenkconsentkofkMcGraw-
HillkEducation.
mynursytest.store

,DOWNLOAD THE Test Bank for Fundamental Managerial Accounting Concepts 9th E
k k k k k k k k k k

dition Edmonds k




5) RockkCreekkBottlingkCompanykpayskitskproductionkmanagerkaksalarykofk$6,000kperkmonth.k
Salespersonskarekpaidkstrictlykonkcommission,katk$1.50kforkeachkcasekofkproductksold.

ForkRockkCreekkBottlingkCompany,kthekproductionkmanager'sksalarykiskankexamplekof:
A) akvariablekcost.
B) akmixedkcost.
C) akfixedkcost.
D) Nonekofkthese

Answer:k C
Explanation:k Thektotalkamountkofkaktotalkfixedkcostkdoesknotkchangekwhenkvolumekchanges.kDifficu
lty:k2kMedium
Topic:k FixedkCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Understand
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking

6) RockkCreekkBottlingkCompanykpayskitskproductionkmanagerkaksalarykofk$6,000kperkmonth.k
Salespersonskarekpaidkstrictlykonkcommission,katk$1.50kforkeachkcasekofkproductksold.

ForkRockkCreekkBottlingkCompany,kthekcostkofktheksalespersons'kcommissionskiskankexamplekof:
A) akfixedkcost.
B) akvariablekcost.
C) akmixedkcost.
D) nonekofkthese

Answer:k B
Explanation:k Sincektheksalespersonskarekpaidkstrictlykonkcommission,katk$1.50kforkeachkcasekofkpro
ductksold,kthektotalkcostkofktheksalespersons'kcommissionskwouldkincreasekasktheksaleskvolumekincre
ases.kAsksuch,kthiskcostkwouldkbekclassifiedkaskakvariablekcost.
Difficulty:k2kMedium
Topic:k VariablekCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Understand
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking




3
Copyrightk2020k©kMcGraw-
HillkEducation.kAllkrightskreserved.kNokreproductionkorkdistributionkwithoutkthekpriorkwrittenkconsentkofkMcGraw-
HillkEducation.
mynursytest.store

, DOWNLOAD THE Test Bank for Fundamental Managerial Accounting Concepts 9th E
k k k k k k k k k k

dition Edmonds k




7) Basedkonkthekfollowingkcostkdata,kwhatkconclusionskcankyoukmakekaboutkthekcostskofkProductkAka
ndkProductkB?

TotalkCost
Production: ProductkA ProductkB
10kunits $ 100 ?
100kunits $ 1,000 ?
1,000kunits $k 10,000 ?
UnitkCost
Production: ProductkA ProductkB
10kunits ? $k 10,000
100kunits ? $ 1,000
1,000kunits ? $ 100

A) ThekcostkofkProductkAkiskakfixedkcostkandkthekcostkofkProductkBkiskakvariablekcost.
B) ThekcostkofkProductkAkiskakvariablekcostkandkthekcostkofkProductkBkiskakfixedkcost.
C) ThekcostskofkProductkAkandkProductkBkarekbothkvariablekcosts.
D) ThekcostskofkProductkAkandkProductkBkarekbothkmixedkcosts.

Answer:k B
Explanation:k Whenkthekvolumekincreases,kthektotalkcostkofkProductkAkincreases;kasksuch,kthekcostko
fkProductkAkiskakvariablekcost.kThekfixedkcostkperkunitkofkProductkBkdecreaseskwhenkvolumekincreas
es;kasksuch,kthekcostkofkProductkBkiskakfixedkcost.
Difficulty:k2kMedium
Topic:k VariablekCostkBehavior;kFixedkCostkBehavior
LearningkObjective:k 02-
01kIdentifykandkdescribekfixed,kvariable,kandkmixedkcostkbehavior.kBloom's:k Understand
AACSB:k KnowledgekApplication
AICPA:k BBkIndustry;kFNkDecisionkMaking




4
Copyrightk2020k©kMcGraw-
HillkEducation.kAllkrightskreserved.kNokreproductionkorkdistributionkwithoutkthekpriorkwrittenkconsentkofkMcGraw-
HillkEducation.
mynursytest.store