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MANAGEMENT ACCOUNTING COST ESTIMATION

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  • 1. Multiple Choice
    1 minute
    1 pt

      A mixed cost

    is fixed over a wider range of activity than a step cost.

    is a fixed cost over the relevant range and a variable cost everywhere else.

     

    contains both fixed and variable components.

      always increases on a per unit basis.

     

  • 2. Multiple Choice
    1 minute
    2 pts

       Bud uses the high-low method of estimating costs. Bud had total costs of $50,000 at its lowest level of activity, when 5,000 units were sold. When, at its highest level of activity, sales equaled 12,000 units, total costs were $78,000. Bud would estimate variable cost per unit as 

     

    $10.00

      $6.50

      $4.00

    $7.53

  • 3. Multiple Choice
    30 seconds
    1 pt

    Which of the following is a variable cost?

      A cost that is $20,000 when production is 50,000, and $20,000 when production is 70,000.

      A cost that is $20,000 when production is 50,000, and $28,000 when production is 70,000.

    A cost that is $20,000 when production is 50,000, and $40,000 when production is 70,000.

      A cost that is $40,000 when production is 50,000, and $40,000 when production is 70,000.

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