# MANAGEMENT ACCOUNTING COST ESTIMATION

## 9 questions

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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.