Variable Cost

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Variable Cost Questions and Answers

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If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), does the break even point increase or decrease?
For a given accounting period, what is likely to represent primarily variable costs?
A telephone call from texas, u.s.a. to Ontario, Canada costs $1.00 for the first minute and $0.53 for each additional minute. How much will a 27-minute call cost?
You are a representative for a cell phone company and it is your job to promote different cell phone plans. Your boss asks you to visually display two plans and compare them so you can point out th...
Refer to the data below: Output Total cost 0 $30 1 39 2 47 3 54 4 60 5 67 6 75 Calculate the total variable cost of producing 5 units.
Are different methods of accounting for variable cost necessary?
Direct materials for a company were $501,000, manufacturing overhead was $250,500, and direct labor was $770,800. Prime costs would total A.1,522,300. B.751,500. C.1,271,800. D.1,021,300.
TC Company estimates the following costs for the coming month: Variable overhead to direct labor ratio 60% Fixed overhead cost $10,000 Direct material to total costs ratio 20% Estimated total cost...
Define variable and fixed costs, and provide at least two examples of each.
Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $5,000,000 if 160,000 units are produced. The variable cost per unit is (a) $26.54/uni...
A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. a. What should the firm do in the short run? Why? b. What should the...
Define and know how to calculate average variable cost.
Explain whether or not each of the following should be considered a variable cost that increases with each additional airline seat sale: baggage costs, crew costs, commissions on ticket sales, airp...
An entrepreneur is considering starting a business baking and selling cupcakes. The entrepreneur estimates that average total costs per cupcake would be $1.00, and variable costs per cupcake would...
In order to produce a new product, a firm must lease equipment at a cost of $10,000 per year. The managers feel that they can sell 5,000 units per year at a price of $7.50. What is the highest vari...
A car rental agency advertised renting a car for $19.95 per day and $0.49 per mile. If you rent this car for 2 days, how many whole miles can you drive if you only have $200 to spend?
A long distance phone company charges $1.01 for the first 25 minutes of a call, then $0.09 for each additional minute. A call cost $9.56. How long did it last?
Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $12.40 per unit, and the variable labor cost is $6.80 per unit. a. What is the variable cost per unit? (Do no...
Day Shades Inc. manufactures sunglasses. The variable materials cost is $15.00 per unit, and the variable labor cost is $2.30 per unit. What is the variable cost per unit? (Do not round intermedia...
Night Shades Inc. manufactures biotech sunglasses. The variable materials cost is $16.00 per unit, and the variable labor cost is $7.30 per unit. What is the variable cost per unit? (Do not round...
Perfect Pad manufactures floor mats for trailers that are used to transport horses. The mats provide for a firm footing surface that quickly sheds water. Mats are made to customer specifications vi...
The following cost is an example of a variable factory overhead cost: a. Property taxes on the factory building. b. Insurance on the factory building. c. Salary of the plant manager. d. Factory...
Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for an automobile manufacturer: (i) Wages of employees that operate painting equipment (ii) Wages of the plant man...
On a unit basis, what happens to cost as it increases for variable cost?
If a product's total cost is $200 and the prime cost is $150, what is the total applied overhead if 1000 units are produced: a. $40,000. b. $150,000. c. $50,000. d. None of the above.
At the end of August, a company's mixing department had 'Total costs to account for' of $728,607. Of this amount, $255,927 related to direct materials costs, while the remainder related to conversi...
Marvel Manufacturing Inc. provides you with the following data for the month of June: Prime costs were $195,500, conversion costs were $140,700, and total manufacturing costs incurred were $268,000...
The following variable production costs apply to goods made by Zachary Manufacturing Corporation: Item Cost per unit Materials $ 9.00 Labor 2.50 Variable overhead 0.75 Total $12.25 Required: Dete...
Robin Company has the following balances for the current month: What are Robin's prime costs? a) $27,050 b) $39,120 c) $34,250 d) $32,750
At a level of 8,229 units, Balding Plc Ltd., a company that makes keyboards, has total fixed costs of $394,991 and total variable costs of $340,163 for sales expense. What would the total variable...
For Crane Company, sales are $1,000,000, fixed expenses are $300,000, and the contribution margin ratio is 36%. What are the total variable expenses? (a) $1,000,000 (b) $192,000 (c) $640,000 (d) $3...
Would it be wise for an airline to sell a seat to a passenger walking up to the gate at the last minute a ticket based on the variable cost? Why or why not?
A motel operation has 120 rooms. The previous year of operations reported an occupancy rate of 70 percent and the average room rate was $40.00. The owner is forecasting the occupancy rate to increa...
The following costs were incurred in September: Direct materials - $43,700 Direct labor - $29,600 Manufacturing overhead - $22,600 Selling expenses - $17,000 Administrative expenses - $31,100...
Which of the following is a variable inventoriable product cost? a. The salary of the plant manager. b. Depreciation of factory equipment. c. Commissions paid to sales representatives. d. Utili...
A soft drink bottler incurred the following factory utility cost: $3,911 for 850 cases bottled and $3,966 for 1,000 cases bottled. Factory utility cost is a mixed cost containing both fixed and var...
What are some variable costs for an app development?
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: Direct materials $ 74,000 Direct labor $ 37,500 Var...
A company's prime costs total $4,509,000 and its conversion costs total $5,510,000. If direct materials are $2,011,000, calculate the overhead costs. a. $2,498,000 b. $3,499,000 c. $2,011,000 d. $3...
A company's prime costs total $3,300,000 and its conversion costs total $7,300,000. If direct materials are $1,150,000 and factory overhead is $5,150,000, then direct labor is?
A firm expects to sell 25,300 units of its product at $11.30 per unit and to incur variable costs per unit of $6.30. Total fixed costs are $73,000. The pretax net income is: a. $53,500. b. $73,000...
When output volume increases, do variable costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.
If costs rise in a somewhat linear fashion as the number of services offered rises, this may be: a. a fixed cost b. A variable cost, since each additional service adds to the cost. c. A mixed cost,...
A) A company breaks even with sales of $600,000. What profit will it make if it sells $800,000 worth of goods, the variable costs of which are $600,000? You may assume that variable costs change di...
A car rental company charges $150 per week plus $0.24 per mile to rent a car. How many miles can you travel in one week for $360?
Normal Company pays a sales commission of 4% on each unit sold. If a graph is prepared, with the vertical axis representing per-unit cost and the horizontal axis representing units sold, how would...
As the level of output activity increases, the variable cost per unit remains constant. True False
Variable cost structure produces a proportional relationship between sales and profitability. a. True b. False
When a cost base does not change regardless of the activity the cost is a fixed cost. True False 1 points QUESTION 2 Fix cost does not remain consistent when activity changes. True False 1 points Q...
The blue company is currently selling its single product for $15. Variable costs are estimated to remain at 70% of the current selling price, and fixed costs are estimated to be $4,800 per month. I...
The following data pertain to Epsom Corporation's operations: Unit sales 13,400 units Selling price $20 per unit Contribution margin ratio 45% Margin of safety percentage 35% The variable expense p...
Douglas Corporation recently produced and sold 100,000 units. Fixed costs at this level of activity amounted to $50,000; variable costs were $100,000. How much cost would the company anticipate if...
Kodama Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with respect to the number of calls in a month. At a volume of 30,000 calls...
Total fixed costs for Herman Enterprises are $211,065. Total costs, both fixed and variable, are $551,307 if 100,000 units are produced. What is the variable cost per unit?
1. Which one of the following is most likely a variable cost? A. Direct Materials B. Depreciation C. Rent expense D. Property Taxes 2. Gift Gallery sold 2,000 zooglars during 2010. Information is p...
Aaron's Chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were: Material costs $4,620 Labor Cost 2,600 Rent 1,500 Depreciation 2,500 Oth...
Aaron's Chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were: Material cost $4,530 Labor cost $2,760 Rent $1,500 Depreciation $2,500 O...
Which of the following are inversely related to variable costs per unit? A) Operating cash flow per unit and contribution margin per unit. B) Operating cash flow and sales quantity. C) Contribut...
Is the Number of visits which is 10,000 a part of fixed cost? Or you use as a volume to times with variable cost?
Why does a variable cost curve originate from the point of origin?
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