C. How much sales can fall before a business makes less than 15% - They are constant on a per unit basis but vary in total as production changes. 6. Hourly employees The shampoo used to groom pets The yarn used to make a scarf 15 for raw materials like potato, oil, salt etc. B. D fixed cost Having discussed about variable cost, let us take an example to see its impact on the overall profit. By reducing the variable expense, the company can increase the profit or contribution margin. 60, the gross profit for a packet will be Rs. follow me on insta: Choosing between a brand-new phone or an inexpensive or refurbished phone is a variable expense. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. 2. C. remain the same as production levels change. This expense is fixed with respect to the cost per unit, but the total expense will increase with the volume of production. Hence company will look at reducing the variable expense. 5.B 35.A Variable costs per unit remain constant in the relevant range. Entire cost Total cost* Complete cost Required cost 2. C. are stated on a per unit basis. Another example of mixed or semi-variable cost is electricity bill. What is another term for profit planning? cost of common stock. 49.D The cost function is the mathematical relationship between the cost of a product and its various determinants. irrespective of the number of output produced.Variable costs vary with the number of output produced.Semi-variable is the type of costs, which have the characteristics of both fixed costs and variable costs. a.A variable cost in total changes in direct proportion to changes in output within the relevant range. 10) / Rs 60 = 0.833. 25, Rs. A cost that has the characteristics of both variable and fixed cost is called mixed or semi-variable cost. As I said I would here are all the answers! Let's stay in touch :), Your email address will not be published. ok ur welcome.Lol. Unit costs associated with Product ORD203 are as follows: Direct materials $50 Direct manufacturing labor 8 Variable manufacturing overhead 10 Fixed manufacturing overhead, If fixed costs are $300,000, the unit selling price is $31, and the unit variable costs are $22, what is the break-even sales (units) if fixed costs are reduced by $30,000? Variable Cost Per Unit Definition. An example of a variable cost is the resin used to create plastic products; resin is the key component of a plastic product, and so varies in direct proportion to the number of units manufactured. Profit mapping* 43.A In this function, the unit cost or total cost is the dependent variable. please help thank you! Costs| Avg. 46.B 2.C Fixed costs, as its name suggests, is fixed in total i.e. Good luck on your finale exam! 4. 20.C 3.D Which of the following is a variable cost? Question 22. Variable cost per unit refers to the cost of production of each unit produced in the company which changes when the volume of the output or the level of the activity changes in the organization and these are not the committed costs of the company as they occur only in case there is the production in the company. A variable expense is a cost that changes significantly from period to period, such as week to week, month to month, quarter to quarter or from year to year. 19.B 1. Variable costs change with the amount of products or services you sell. B. 5. The sales level is 5,000 units. 34.A 36.A Corporate growth Fixed Costs 0 |$500,000| ---- | ---- | ---- |---- | 1 |540,000 | 2 |560,000 | 3, The East Company manufactures several different products. A. A organic growth Variable costs are a company's costs that are associated with the number of goods or services it produces. If you like NF then tell me your fav song! A. They are expenses that will have to be paid by the company even though there are any changes in business activities. How much sales can fall before a business starts taking a loss* Learn vocabulary, terms, and more with flashcards, games, and other study tools. C. Both of the above* 5) none of the above all the rest are correct, Ok so before i spend the next idk 5 min giving you the answer...Lol B. Which of the following is a characteristic of a variable cost? A. Which variable represents her rent? What is known as the price at which a seller projects that a buyer will buy a product? Var. Wow whoever posted that exam ur literally my favorite person to exist, bruh why it gotta be the nf dude who chill ahahah. and Rs. Variable expenses are those expenses that are likely to be affected in proportion to the activities of the business. C. Variable costs* 25.B 50.D, bro i did this whole test then i found this life .-. When the manufacturing increases, the raw material used will also increase thus increasing the expenditure. 8. B. increase as production decreases. The cost factor that is included in the decisions will have a major impact on the finances of the company. 4.B Just as with personal finance, in a small business it would help you to budget for variable expenses as well as to have a savings account with money set aside to cover higher-than-normal expenses when they occur. C. Both of the above 2. Which of the following is not a variable cost? Expenses like production wages, raw materials, sales commission, shipping costs etc. C neither of the above 25 to make 1 packet of potato chips weighing 250 gms. A. Organic growth* The company’s profit is dependent on that total cost which is calculated as: The profit of the company can be increased by decreasing the total costs. A company who pursues to increase its profit by decreasing the variable expense will have to decrease the expense on changing costs for raw materials, direct labor and advertising. main: @_love_me_mas 1  In order to calculate the net profit, the fixed costs will have to be subtracted from the gross profit. 10 Alpha Company has a $250 sales price and $150 in variable manufacturing costs per unit. Which of the following expenses is not a variable cost? d is incorect , not the all is fixed there are two fixed (depreciation - monthly salary of accountant) , and DL is variable lower the cost of retained earnings. 42.B Your email address will not be published. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, and $350 for, The predicted 2009 costs for Osaka Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $100,000 Variable $300,000 Fixed 220,000 Fixed 200,000 Average total assets for 2009 are predicted to be, When fixed costs are unitized, they A. may appear to be variable costs. B. In order to manage a business, it is very important to understand the idea of variable expense as a crucial concept. 5. Groceries are a Variable expense because you may not spend the same amount on food every month What does a written budget if followed remove from your finances? c.A variable cost in total remains constant regardless of the level of output. Spam: melly.esperanza.spammmm What are expenses that do not change called? The company's degree of operating leverage (DOL) (rounded to one decimal point) is: a. b. B. The method is in contrast with absorption costing Absorption Costing Absorption costing is a costing system that is used in valuing inventory. A variable expense is considered as an important component and a management tool in calculating the total expense. Mine is all of them mostly TS Outcast and many more! Profit zoning To calculate total variable costs, the formula is: Total quantity of units produced x Variable cost per unit = Total variable cost. D. None of the above As the cost of production of the potato chips increases, the variable costs of the company are also increased. Based on variability, the costs has been classified into three categories, they are fixed, variable and semi variable. In the short run, which of the following is most likely a variable cost? Thank you!! The reason the marginal cost curve eventually increases as output increases for the typical firm is because: A) of diseconomies of scale. 12.B Fixed expenses are those expenses that do not change when there is a change in production or sales level. Consider a potato chips manufacturing company. Known costs C. Stable costs D. Fixed costs* 5. The Exam answers were 100% right. 40.D Total cost* In this article, we will look at the fixed and variable factors corresponding to the short and long runs of time and focus on short-run total costs.. Browse more Topics under Theory Of Cost How much sales can fall before a, PROBLEM SOLVING 1: "ANDREA'S SOFTWARE BUSINESS" I. Complete the following table: DO THE MATH Data Number of Programs Total Fixed Costs Total Variable Costs Total Costs Marginal Costs Average Fixed Costs Average Variable Costs, The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) 3 hours @ $.80 per hour Variable overhead 3, suppose that the short run costs for a paintbrush manufacturer are given by the expression: TC= 100+2Q+.01 Q2 A. WAT ARE THE FIXED COSTS OF THIS MANUFACTURE? Variable expense is important for the financial planning of the company. A. Manager’s decisions are important as their decision should be aligned with the goals of the company.These goals are mostly linked to the financial aspects of the revenue and profit targets. B. may cause managers to make decisions that are not in the best interest of the company as a whole. Check my work pls. 8. 26.C 41.D Cash – Cash that is required for an immediate expense. Answer 30,000 units 8,710 units 12,273 units 20,000 units, The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: StandardCosts Fixed overhead (based on 10,000 hours) 3 hours @ $.80 per hour Variable overhead3 hours, A computer company produces affordable, easy-to-use home computer systems and has fixed costs of $250. The fuel for an airline is a good example of variable expense. Fixed costs A variable expense is considered as an important component and a management tool in calculating the total expense. A. 33.A D. Required cost What is the margin of safety? You can view more similar questions or ask a new question. The cost differs with the number of flights and trip duration. Labor and raw materials costs C. Property taxes D. Interest payments on borrowed funds Variable costs are the costs of production that change when the rate of … Which of the following costs must be adjusted to an after-tax cost? Managers will add the product of the variable expense as per unit costs and production volume to fixed costs to finalize the total production costs. 60 – Rs. Variable costing (also known as direct costing) treats all fixed manufacturing costs as period costs to be charged to expense in the period received.Under variable costing, companies treat only variable manufacturing costs as product costs. D. Profit price C both of the above The contribution margin is calculated as: Contribution Margin = Gross Profit / Sales = (Sales – Variable Costs) / Sales. Variable manufacturing costs were $8 per unit, and variable marketing costs were $4 per unit sold. 7. Basically, variable expense relates to the material costs that are used in production and the direct labor charges to make the products. 3.C variable cost A company's variable costs increase and decrease with its … D. Fixed costs* The table below shows the way the variable costs change when the potatoes chips manufactured changes. B. Profit increases when the contribution margin increases. 9. Variable cost per unit, within the relevant range, will: A. decrease as production increases. 37.B C inorganic growth Variable costs are expenses that increase proportionately as revenues or operations increase. Direct materials cost B. Straightminus line depreciation expense C. Property taxes D. Salary of plant manager. D. Monetary growth As a manufacturer produces more units, it will naturally need more materials. 60 = 0.58. A. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. 16. Moderate costs C. Variable costs* D. Changing costs 4. Selling price btw i like no name from nf, I took it using your answers I am pretty sure there all right but I missed a couple on purpose so I suggest everyone miss some so the teachers dont know, Always purposely miss a question or 2 if you plan on cheating ~ if everyone cheats and gets 1 wrong (let's say we all put b for idk question 2) they will know so dont make it obvious of you cheat js. Out of Rs. Answer fixed semi-variable operating variable 3. I missed a few just to make it look like I actually did it, but thank you. c . 21.B Wages of workers … 14.3 c. 21.4 d. 35.7 e. None of the answers are correct. With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. 10.D Rent 35. However, it is notable that the changes in expenditure occur with little or no interference by the management. The fixed expenses are $77,000 and the contribution margin ratio is 30% (Sales minus variable costs of 70%.) a is incorrct , because it is fixed costs. Raw material* They remain constant for a specific level of production over a certain period of time. D. Profit sharing What is known as the rate of business expansion through increasing output and sales as opposed to mergers, acquisitions, and takeovers? 48.D Contractual lease payments B. How much sales can fall before a business starts making less 5% For example, you may need a cell phone for work or health reasons. Thus, the cost of materials varies with the level of production. What are expenses that do not change called? 3. Question 23. 32.C 4. 1.A 60 – Rs. A. 44.B Moderate costs D. Changing costs A. Variable Costs . 25 = Rs. To learn more about fixed and variable costs, review the accompanying lesson titled Identifying Fixed Costs & Variable Costs for Producers. are examples of variable expense. 13.D Bringing down fixed expense is a great challenge. Moreover, it is also important to understand the practical application of this concept as when and where the variable expenses will impact. C. Inorganic growth* A target price Depending on the type of business, the variable expense will vary. C. Stable costs Answer direct materials direct labor delivery costs rent 2 _____ costs are a function of time (not sales) and are generally contractual. For example, shipping costs, costs for raw materials, or for employees who are making and shipping products or providing services are usually variable. Fan page: m.esperanza.fanpage.35 10 for the direct labor involved in making potato chips. Fixed expenses are those that will remain same despite any change in the sales amount, production or some other activity. B profit mapping Steps To Get A Business Card, Meaning Of Objective Statement And How To Create One, Difference Between Variable Cost and Fixed Cost, What is fixed expenses ? 15.B C. Profit predicting Property taxes 7. 28.C C. Inorganic growth The variable cost per unit would be $1.50 ($15,000/10,000 units). Variable expenses are also called as unit level expense as they change with the number of units produced. Target price* 6. Variable expense has a different impact on managerial decisions. 6.D B) 400 units. A good example of this is raw materials. A. 27.A The business firm will pay for the maintenance of the infrastructure like rental, electricity etc. B) of minimum efficient scale. CollegePak Company produced and sold 60,000 backpacks during the year just ended at an average price of $20 per unit. D. Monetary growth 18.C 39.C A business firm pays raw material for production. The expression 2x+12y+365z represents her yearly expenses. Which of the following are examples of possible fixed costs? A. *=my answer. 23.D Some expenses can contain discretionary, variable, and fixed categories. New questions in Mathematics. 2.B 1.B total cost 7.B February 16, 2018 By Hitesh Bhasin Tagged With: Small business articles. Some items may appear on more than Which of the following are examples of possible fixed costs? If the potato chips manufacturing reduces its variable costs to 10, its contribution margin will increase to (Rs. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, How to Get a Business Loan -A Complete Step-by-step Guide, How To Get A Business Credit Card? 1. I will post all 50 answers here after I am done! Some of the common examples of variable expense are the following: The variable cost is calculated using the formula shown below: Total Variable Cost = Total Quantity of Output * Variable Cost per Unit of Output. Therefore, the break-even point in dollars = $77,000 divided by 30%. Variable expenses tend to increase persistently in proportion to the capital and labor. Expenses like production wages, raw materials, sales commission, shipping costs etc. D. None of the above The contribution margin allows the management to find out the revenue and profit earned from each unit of product sold. 1 for each unit completed (variable). increase the cost of capital. C. Complete cost Wages of workers Fixed costs, Personal Finance school can you check my answers? For example, 1. and 22.A 10. 47.C The monthly rent of a retai… Consistent reporting of actual costs, correct estimation of the projected costs and the suitable integration of such costs in managerial decisions is a major component of the business operations that meet their targets and also the goals of the company. The following items are the same for the flexible budget and the master budget EXCEPT the same: a. variable cost per unit b. total fixed costs c. units sold d. sales price per unit . It is intended to meet certain insurance needs, investment goals, and tax planning objectives. Accounting. 35 / Rs. status: correct (1.0) correct: b your answer: b feedback: Correct. The expenses that occur in businesses are classified into two types – fixed expenses and variable expenses. A. Let us assume that it costs Rs. Start studying Fixed or Variable Expenses. What is the margin of safety? Known costs Corporate growth The term variable cost refers to costs that fluctuate with respect to cost-driver changes such as the volumes of production and sales. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death. Typical small business variable expenses would be costs for raw materials to produce goods as well as operating expenses such as office supplies or hourly payroll. Entire cost The components of ___ are variable costs and fixed costs. 30.C 16.A Consolidated has the following manufacturing costs: Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers’ wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 per Surfer; Tires, $150 per tire, each Surfer takes 5 tires (one spare). 15. The logic behind this expensing of fixed manufacturing costs is that the company would incur such costs whether a plant was in production or idle. A Written budget, if followed, can remove overspending, guilt, and management by crisis spending. B. Variable costing is a concept used in managerial and cost accounting in which the fixed manufacturing overhead is excluded from the product-cost of production. The two components of are variable costs and fixed costs. They change over a period of time. Its output is: A) 200 units. A. Fixed costs B. D) 1,600 units. However, it may change if the production level increases beyond a limit. b.A variable cost is a cost that is not linked to a company's output. 9.C B. To summarize, variable costs are measured as a direct function of production volume which increases with expansion in production and decreases with contractions in production. The company's operating income is $35,000. WHAT ARE THE TOTAL COSTS , AVERAGE COST, AVERAGE VARIABLE COST AND, The accompanying table shows a car manufacturer’s total cost of producing cars: Qty |TC| Variable Costs| Avg. Given costs B. 9. Answer. I love writing about the latest in marketing & advertising. The contribution margin for the potato chips is Rs. 14.B For example, the rental charges of a machine might include $500 per month plus $5 per hour of use. cost of preferred stock. $110,000 B. 29.B Identify whether each of the following items would appear on the income statement (IS), statement of changes in stockholders’ equity (SE), balance sheet (BS), or statement of cash flows (CF). By this, decreasing expense will lead to decreasing variable expense. cost of debt. C. Perfect price 45.C yesss melly is correct, and i'll use those answer on the test and get a few wrong before they expect too much from me ! B. D. All of the above. If the potato chips manufacturing company sells each packet for Rs. What is known as the rate at which business expands by increasing output and business reach? 11.C are examples of variable expense. 10. Total Costs| Avg. 8.C Examples of Variable Costs. D. None of the above Which of the following describes variable costs? b is correct , the variable costs include DM , DL , VOH. cost of retained earnings. Which of the following are examples of possible fixed costs? 31.B The total cost is calculated by the sum of fixed and variable costs. B. The $500 per month is a fixed cost and $5 per hour is a variable cost. A variable life insurance policy is a contract between you and an insurance company. Semi-variable cost is the cost which is basically variable but whose slope may change abruptly when a certain output level is reached as shown in Exhibit 2.10. Expenses like rent, insurance, payment on loans, management salaries, advertising are examples of fixed expenses. 24.A A. Which of the following is true of a variable cost? An example of a mixed cost is the earnings of a worker who is paid a salary of Rs 1,500 per week (fixed) plus Re. C) 800 units. You can follow me on Facebook. Given costs What Is Variable Life Insurance? In the following month, the company receives a large order whereby it must produce 20,000 toys. A. Organic growth What are expenses that change as conditions change? c is incorrect , any depreciation is fixed costs. Variable expenses are those expenses that are likely to be affected in proportion to the activities of the business. 17.B i used @2dizzy2c's answer's and i got an 80% soo yeah dont use his/hers use mine.. well if u want a straight 100% put thats up to u!!! , shipping costs etc ( 1.0 ) correct: b feedback: correct ( )! Calculated by the sum of fixed and variable marketing costs were $ 8 unit! It will naturally need more materials Required cost 2 the direct labor delivery costs 2. Best interest of the following are examples of fixed and variable costs ) /.. As its name suggests, is fixed costs of $ 3 and average variable of.: a ) of diseconomies of scale and more with flashcards, games, and costs... Business world advertising are examples of possible fixed costs phone for work or health reasons and fixed costs 5... The best interest of the following is a cost that is not to! About variable cost refers to costs that are associated with the amount of products or it... Meet certain insurance needs, investment goals, and fixed costs, Personal Finance can... Expansion through increasing output and sales as opposed to mergers, acquisitions, more. Of plant manager: total quantity of units produced x variable cost discretionary, variable and semi.. Month is a variable expense Straightminus line depreciation expense C. Property taxes C. Both of the following are of! Have a major impact on managerial decisions some other activity cost factor that is used in and... The product-cost of production firm will pay for the typical firm is because a! Increases for the financial planning of the business contract between you and an company! An inexpensive or refurbished phone is a fixed cost and $ 150 in variable manufacturing costs per unit, takeovers! Interest of the following is a variable life insurance policy is a policy that pays a specified amount to family. Phone is a change in production and sales as opposed to mergers, acquisitions, variable! To find out the revenue and profit earned from each unit of product sold decreasing. Dl, VOH a limit product-cost of production over a certain period of time ( not ). Are variable costs change with the number of goods or services it produces opposed to,., which of the following is a variable expense quizlet, VOH are fixed, variable, and tax planning objectives you sell it look like actually! Costs of $ 20 per unit, within the relevant range include DM,,! In total remains constant regardless of the following are examples of possible fixed costs direct materials direct charges., is fixed in total changes in output within the relevant range, will A.... Cause managers to make decisions that are used in valuing inventory understand the practical application of this concept when., which of the following is a variable expense quizlet SOLVING 1: `` ANDREA 's SOFTWARE business '' I manufacturing company each. Study tools can you check my answers cost B. Straightminus line depreciation C..: total quantity of units produced x variable cost in total remains constant regardless of the business firm will for! Materials varies with the number of units produced have to be paid the! Such as the rate at which business expands by increasing output and reach... A cell phone for work or health reasons known as the price at which a seller projects that buyer... You may need a cell phone for work or health reasons certain period of time ( not sales ) are. May cause managers to make the products above 7 a fixed cost $! I created Marketing91 because I wanted my readers to stay ahead in this function, the costs. Changes in direct proportion to the material costs that are used in managerial cost. Will have to be subtracted from the product-cost of production level increases beyond a limit is incorrct, it! B.A variable cost, let us take an example to see its impact on the finances of potato! Involved in making potato chips its various determinants before a, PROBLEM SOLVING 1: `` ANDREA 's SOFTWARE ''... Electricity bill Required cost 2 practical application of this concept as when and the... It may change if the potato chips weighing 250 gms depreciation is with. D. Salary of plant manager of 70 %. electricity bill growth 8 Marketing91 because I wanted my readers stay... Profit / sales b feedback: correct ( 1.0 ) correct: b feedback: correct relates to the of! Constant regardless of the company even though there are any changes in expenditure occur with little or interference... Dm, DL, VOH costs that are not in the following are examples possible... For raw materials like potato, oil, salt etc decisions that are associated the. As opposed to mergers, acquisitions, and variable expenses are those that will remain same any. 77,000 divided by 30 % ( sales minus variable costs in valuing inventory total remains constant of... Were $ 4 per unit = total variable cost, let us an. Depending on the finances of the above 6 not be published us take an example to see its impact the! A characteristic of a variable cost per unit, can remove overspending, guilt and! Required cost 2 the method is in contrast with Absorption costing Absorption costing Absorption costing is a change the.: Small business articles that do not change when the potatoes chips manufactured.... Margin is calculated as: contribution margin is calculated by the sum of fixed expenses are 77,000... The potatoes chips manufactured changes above D. None of the company can increase the or... ___ are variable costs to 10, its contribution margin you like NF then tell me your fav!. To meet certain insurance needs, investment goals, and fixed costs just to make that. Material used will also increase thus increasing the expenditure questions or ask a new question ) your... Variable costs include DM, DL, VOH, electricity etc am a serial entrepreneur & I Marketing91. Allows the management which of the following is a variable expense quizlet None of the following month, the variable costs per =! Costs etc understand the practical application of this concept as when and where the variable costs of the 's! Amount, production or sales level likely a variable expense because it is notable that the in... ( your beneficiaries which of the following is a variable expense quizlet upon your death that pays a specified amount to family... To mergers, acquisitions, and variable marketing costs were $ 8 per unit as. Labor delivery costs rent 2 _____ costs are expenses that do not change when there is a variable,... Valuing inventory be affected in proportion to the capital and labor adjusted an... Company can increase the profit or contribution margin will increase to ( Rs occur with little or no interference the... Of variable expense, the variable costs * 5 tax planning objectives earned from each unit of product sold (... The changes in expenditure occur with little or no interference by the management to find the. Of units produced x variable cost refers to costs that are not in the best of... Of units produced x variable cost in total i.e this hectic business world variable... That are associated with the number of units produced x variable cost is a concept used in valuing.! The mathematical relationship between the cost per unit remain constant in the range... Idea of variable expense me your fav song expense relates to the capital and labor ), your address... Games, and management by crisis spending all 50 answers here after I am a serial entrepreneur & created... Likely a variable cost refers to costs that are not in the sales amount, production or other! Sum of fixed and variable marketing costs were $ 4 per unit sold, costs. Total remains constant regardless of the infrastructure like rental, electricity etc expenses tend to increase persistently in to! Proportion to the activities of the above * D. Monetary growth 9 by increasing output and business reach c.a cost... As the volumes of production a whole price D. profit sharing 10 proportion to the cost a! Alpha company has a different impact on the overall profit: correct ( 1.0 ) correct b! Increases as output increases for the financial planning of the business firm will for. A costing system that is used in managerial and cost accounting in which the fixed expenses are $ 77,000 the! Another example of variable expense has a different impact on the overall profit relates to the capital labor. Insurance, payment on loans, management salaries, advertising are examples of possible costs.