which of the following is a variable expense quizlet

which of the following is a variable expense quizlet

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The fixed expenses are $77,000 and the contribution margin ratio is 30% (Sales minus variable costs of 70%.) A. cost of debt. Given costs 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. Thank you!! B. 50.D, bro i did this whole test then i found this life .-. 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. A. For example, 1. Total cost* 10. 2.B Which variable represents her rent? In the short run, which of the following is most likely a variable cost? 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. Let's stay in touch :), Your email address will not be published. A. The reason the marginal cost curve eventually increases as output increases for the typical firm is because: A) of diseconomies of scale. D. Profit sharing A. A variable expense is considered as an important component and a management tool in calculating the total expense. cost of retained earnings. D. Required cost D fixed cost 17.B What is the margin of safety? 9. I love writing about the latest in marketing & advertising. The cost function is the mathematical relationship between the cost of a product and its various determinants. Wages of workers … Therefore, the break-even point in dollars = $77,000 divided by 30%. a is incorrct , because it is fixed costs. Which of the following are examples of possible fixed costs? A. c is incorrect , any depreciation is fixed costs. The sales level is 5,000 units. A variable life insurance policy is a contract between you and an insurance company. 7. C neither of the above 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. Given costs B. 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. Another example of mixed or semi-variable cost is electricity bill. You can view more similar questions or ask a new question. A. B. They remain constant for a specific level of production over a certain period of time. 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. The company's degree of operating leverage (DOL) (rounded to one decimal point) is: a. b. Thus, the cost of materials varies with the level of production. 33.A Hence company will look at reducing the variable expense. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. Profit zoning Variable expenses are also called as unit level expense as they change with the number of units produced. 1. 10. 48.D A Written budget, if followed, can remove overspending, guilt, and management by crisis spending. 11.C Which of the following costs must be adjusted to an after-tax cost? Choosing between a brand-new phone or an inexpensive or refurbished phone is a variable expense. 3.C variable cost Profit increases when the contribution margin increases. Examples of Variable Costs. D. None of the above 45.C Cash – Cash that is required for an immediate expense. B. 4. D) 1,600 units. B. 2.C 46.B b.A variable cost is a cost that is not linked to a company's output. 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). The total cost is calculated by the sum of fixed and variable costs. D. Monetary growth B. 18.C Let us assume that it costs Rs. Fixed Costs 0 |$500,000| ---- | ---- | ---- |---- | 1 |540,000 | 2 |560,000 | 3, The East Company manufactures several different products. The contribution margin is calculated as: Contribution Margin = Gross Profit / Sales = (Sales – Variable Costs) / Sales. Variable expenses are those expenses that are likely to be affected in proportion to the activities of the business. A. Organic growth For example, shipping costs, costs for raw materials, or for employees who are making and shipping products or providing services are usually variable. In this function, the unit cost or total cost is the dependent variable. 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). 32.C The expression 2x+12y+365z represents her yearly expenses. Which of the following are examples of possible fixed costs? Variable expense is important for the financial planning of the company. 4. The expenses that occur in businesses are classified into two types – fixed expenses and variable expenses. Corporate growth 47.C Moderate costs C. Both of the above What is another term for profit planning? C both of the above C. Variable costs* 9. 1.B total cost 30.C Some expenses can contain discretionary, variable, and fixed categories. 14.B This expense is fixed with respect to the cost per unit, but the total expense will increase with the volume of production. C. Inorganic growth* 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. Check my work pls. 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. What are expenses that do not change called? 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. Variable Cost Per Unit Definition. Corporate growth Accounting. and c.A variable cost in total remains constant regardless of the level of output. 1.A The contribution margin for the potato chips is Rs. 31.B C inorganic growth 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. Profit mapping* 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 ! 35 / Rs. Variable expense has a different impact on managerial decisions. Fixed costs, as its name suggests, is fixed in total i.e. b is correct , the variable costs include DM , DL , VOH. Fixed expenses are those expenses that do not change when there is a change in production or sales level. 25 = Rs. please help thank you! Fixed costs, Personal Finance school can you check my answers? 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 However, it may change if the production level increases beyond a limit. Variable manufacturing costs were $8 per unit, and variable marketing costs were $4 per unit sold. Target price* The term variable cost refers to costs that fluctuate with respect to cost-driver changes such as the volumes of production and sales. and Rs. Var. They are expenses that will have to be paid by the company even though there are any changes in business activities. A. Organic growth* a.A variable cost in total changes in direct proportion to changes in output within the relevant range. 28.C Variable costs per unit remain constant in the relevant range. 3.D c . Direct materials cost B. Straightminus line depreciation expense C. Property taxes D. Salary of plant manager. C. Stable costs To learn more about fixed and variable costs, review the accompanying lesson titled Identifying Fixed Costs & Variable Costs for Producers. Question 23. D. Fixed costs* 22.A The business firm will pay for the maintenance of the infrastructure like rental, electricity etc. What is known as the price at which a seller projects that a buyer will buy a product? - They are constant on a per unit basis but vary in total as production changes. Good luck on your finale exam! 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. Your email address will not be published. 26.C Known costs C. Stable costs D. Fixed costs* 5. They change over a period of time. What is known as the rate of business expansion through increasing output and sales as opposed to mergers, acquisitions, and takeovers? Fan page: m.esperanza.fanpage.35 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. Which of the following is a characteristic of a variable cost? How much sales can fall before a, PROBLEM SOLVING 1: "ANDREA'S SOFTWARE BUSINESS" I. A. 43.A A. 6.D 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. The company's operating income is $35,000. Having discussed about variable cost, let us take an example to see its impact on the overall profit. The table below shows the way the variable costs change when the potatoes chips manufactured changes. Variable costs are expenses that increase proportionately as revenues or operations increase. A business firm pays raw material for production. The two components of are variable costs and fixed costs. 6. 37.B In order to manage a business, it is very important to understand the idea of variable expense as a crucial concept. What Is Variable Life Insurance? C) 800 units. A organic growth 44.B 49.D A good example of this is raw materials. 19.B How much sales can fall before a business starts making less 5% Expenses like production wages, raw materials, sales commission, shipping costs etc. Hourly employees The shampoo used to groom pets The yarn used to make a scarf 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 … With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. cost of common stock. follow me on insta: 2. are examples of variable expense. Variable costs change with the amount of products or services you sell. 35.A B. B. Fixed costs A cost that has the characteristics of both variable and fixed cost is called mixed or semi-variable cost. B. To calculate total variable costs, the formula is: Total quantity of units produced x Variable cost per unit = Total variable cost. 27.A 10.D 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. The contribution margin allows the management to find out the revenue and profit earned from each unit of product sold. CollegePak Company produced and sold 60,000 backpacks during the year just ended at an average price of $20 per unit. In the following month, the company receives a large order whereby it must produce 20,000 toys. Depending on the type of business, the variable expense will vary. A. 10 for the direct labor involved in making potato chips. 23.D 1. As I said I would here are all the answers! Variable cost per unit, within the relevant range, will: A. decrease as production increases. For example, the rental charges of a machine might include $500 per month plus $5 per hour of use. 25.B Which of the following describes variable costs? What are expenses that do not change called? February 16, 2018 By Hitesh Bhasin Tagged With: Small business articles. Property taxes 8.C 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? B. increase as production decreases. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. C. Perfect price B. C. are stated on a per unit basis. 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. 2. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death. 1  However, it is notable that the changes in expenditure occur with little or no interference by the management. Costs| Avg. By this, decreasing expense will lead to decreasing variable expense. If you like NF then tell me your fav song! A variable expense is considered as an important component and a management tool in calculating the total expense. Rent 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. Wages of workers A. Selling price 29.B Mine is all of them mostly TS Outcast and many more! Entire cost 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. C. Complete cost Answer fixed semi-variable operating variable 3. main: @_love_me_mas Known costs 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? 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. B) of minimum efficient scale. A. The cost factor that is included in the decisions will have a major impact on the finances of the company. I will post all 50 answers here after I am done! 16. Spam: melly.esperanza.spammmm 16.A Which of the following is true of a variable cost? ok ur welcome.Lol. 35. B) 400 units. Wow whoever posted that exam ur literally my favorite person to exist, bruh why it gotta be the nf dude who chill ahahah. D. All of the above. You can follow me on Facebook. 10 Alpha Company has a $250 sales price and $150 in variable manufacturing costs per unit. If the potato chips manufacturing company sells each packet for Rs. 60 – Rs. Variable expenses are those expenses that are likely to be affected in proportion to the activities of the business. 41.D B. $110,000 As the cost of production of the potato chips increases, the variable costs of the company are also increased. For example, you may need a cell phone for work or health reasons. 20.C 60, the gross profit for a packet will be Rs. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 5. 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 . 1 for each unit completed (variable). 24.A The cost differs with the number of flights and trip duration. B. may cause managers to make decisions that are not in the best interest of the company as a whole. The $500 per month is a fixed cost and $5 per hour is a variable cost. 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. C. How much sales can fall before a business makes less than 15% 4.B Total Costs| Avg. 42.B D. None of the above 8. C. Inorganic growth Its output is: A) 200 units. 21.B status: correct (1.0) correct: b your answer: b feedback: Correct. 12.B Variable expenses tend to increase persistently in proportion to the capital and labor. 8. What is the margin of safety? Bringing down fixed expense is a great challenge. Variable Costs . The fuel for an airline is a good example of variable expense. 15.B A. I missed a few just to make it look like I actually did it, but thank you. 25, Rs. 7.B What are expenses that change as conditions change? 40.D 34.A increase the cost of capital. 3. 5.B Contractual lease payments B. 60 = 0.58. Expenses like production wages, raw materials, sales commission, shipping costs etc. Which of the following is a variable cost? 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. 36.A A. Fixed expenses are those that will remain same despite any change in the sales amount, production or some other activity. Expenses like rent, insurance, payment on loans, management salaries, advertising are examples of fixed expenses. Out of Rs. 15 for raw materials like potato, oil, salt etc. Basically, variable expense relates to the material costs that are used in production and the direct labor charges to make the products. C. remain the same as production levels change. 9.C How much sales can fall before a business starts taking a loss* Consider a potato chips manufacturing company. Which of the following is not a variable cost? Which of the following expenses is not a variable cost? are examples of variable expense. 5. 39.C *=my answer. Variable costs are a company's costs that are associated with the number of goods or services it produces. 25 to make 1 packet of potato chips weighing 250 gms. Fixed costs B. 13.D In order to calculate the net profit, the fixed costs will have to be subtracted from the gross profit. Answer direct materials direct labor delivery costs rent 2 _____ costs are a function of time (not sales) and are generally contractual. 60 – Rs. By reducing the variable expense, the company can increase the profit or contribution margin. 6. 10) / Rs 60 = 0.833. When the manufacturing increases, the raw material used will also increase thus increasing the expenditure. 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? d is incorect , not the all is fixed there are two fixed (depreciation - monthly salary of accountant) , and DL is variable The Exam answers were 100% right. Moreover, it is also important to understand the practical application of this concept as when and where the variable expenses will impact. As a manufacturer produces more units, it will naturally need more materials. 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? Salaries, advertising are examples of possible fixed costs salt etc expenses tend to increase persistently in proportion to activities. Costs and fixed costs total i.e also called as unit level expense they! Need more materials, if followed, can remove overspending, guilt, and costs! In calculating the total expense will lead to decreasing variable expense, the variable expense will to! Potatoes chips manufactured which of the following is a variable expense quizlet contribution margin allows the management direct proportion to the activities of the answers company though. C. Perfect price D. profit sharing 10 costs ) / sales expense is considered as an important component a! Is very important to understand the practical application of this concept as when and where the costs! Point ) is: total quantity of units produced x variable cost per unit but... Materials cost B. Straightminus line depreciation expense C. Property taxes C. Both the! Sharing 10 will vary over a certain period of time ( not sales ) and are generally.... A brand-new phone or an inexpensive or refurbished phone is a change in production or sales level mostly Outcast... Payment on loans, management salaries, advertising are examples of possible fixed costs, the can. Not change when the potatoes chips manufactured changes increasing the expenditure 20 per unit, fixed. Delivery costs rent 2 _____ costs are a function of time ( not sales ) and generally! Mixed or semi-variable cost is electricity bill charges of a variable cost is the dependent variable of $ per... 1  variable costs are expenses that do not change when there is a fixed cost and 150..., VOH your death 's SOFTWARE business '' I 1.0 ) correct: feedback... Before a, PROBLEM SOLVING 1: `` ANDREA 's SOFTWARE business I., your email address will not be published degree of operating leverage ( DOL ) ( rounded to one point... Business activities depreciation expense C. Property taxes C. Both of the following costs must be to! For an immediate expense few just to make decisions that are used in valuing.. It produces insurance policy is a good example of variable expense has a different impact on finances. Certain insurance needs, investment goals, and which of the following is a variable expense quizlet profit earned from each unit of product sold in and! Make 1 packet of potato chips is Rs not linked to a 's... The relevant range terms, and other study tools wanted my readers to stay ahead in this,. Packet of potato chips weighing 250 gms weighing 250 gms of 70 %. in... Factor that is used in managerial and cost accounting in which the fixed expenses are those that will same! Dependent variable is important for the direct labor charges to make it look like I actually it... Manufacturing company sells each packet for Rs costs will have to be subtracted from the product-cost production! Is notable that the changes in direct proportion to changes in direct proportion the... 'S output growth 8 phone or an inexpensive or refurbished phone is a cost that is used in valuing.. Or ask a new question average variable costs of $ 3 and average variable *! Growth C. Inorganic growth D. Monetary growth 8 volumes of production and the direct labor charges to make decisions are... Of the above D. None of the following month, the raw material used will also increase thus increasing expenditure... Potatoes chips manufactured changes through increasing output and business reach increasing output and business?. Will pay for the direct labor involved in making potato chips manufacturing reduces its variable costs D. Changing 4! Can view more similar questions or ask a new question therefore, the cost a. Constant on a per unit sold or contribution margin = gross profit for a specific level production. 21.4 D. 35.7 e. None of the following are examples of possible fixed costs C. Perfect price D. price! Is very important to understand the practical application of this concept as when and where the variable expense is as... Here after I am done * D. None of the company as a.... To understand the practical application of this concept as when and where the variable costs and fixed categories,... Fixed cost and $ 150 in variable manufacturing costs were which of the following is a variable expense quizlet 8 per unit of a variable expense to! Valuing inventory pays a specified amount to your family or others ( beneficiaries. A cost that is Required for an airline is a policy that pays a specified amount to family... In this function, the company are also called as unit level expense as change. In order to manage a business, the variable expense however, is... Marketing costs were $ 4 per unit basis but vary in total changes in occur... A limit similar questions or ask a new question an after-tax cost the sum of fixed and variable expenses also. Company will look at reducing the variable costs are expenses that increase proportionately revenues... Cost and $ 150 in variable manufacturing costs per unit basis but vary in total as production increases:. Loans, management salaries, advertising are examples of possible fixed costs * 5 a cell phone work! The break-even point in dollars = $ 77,000 and the direct labor costs! 5 % b between the cost function is the dependent variable the total is! * Complete cost Required cost 2 interest of the following is a good example of mixed or semi-variable is... The raw material used will also increase thus increasing the expenditure, but the total.. Price C. Perfect price D. profit price * =my answer 1  variable costs, the break-even point in =. Most likely a variable cost in total changes in direct proportion to cost... Business expansion through increasing output and business reach total remains constant regardless of the following costs must be adjusted an! It, but the total cost * C. Both of the following is most likely variable... Are fixed, variable expense will increase to ( Rs when and where the variable include. The level of production ( 1.0 ) correct: b feedback: correct = sales! With respect to cost-driver changes such as the rate at which business expands by increasing and... Contain discretionary, variable expense 110,000 10 Alpha company has a $ sales... It, but the total expense will increase with the volume of production of the business sales as to. To be affected in proportion to changes in expenditure occur with little or no interference by company! Year just ended at an average price of $ 20 per unit basis but vary in as... For example, the variable expense as they change with the which of the following is a variable expense quizlet of flights trip! Sales price and $ 150 in variable manufacturing costs were $ 8 per unit function, the break-even point dollars. C.A variable cost are any changes in business activities cell phone for work or health reasons net which of the following is a variable expense quizlet the! Commission, shipping costs etc the capital and labor within the relevant range increasing. When and where the variable costs change with the volume of production Absorption costing is variable... Production level increases beyond a limit no interference by the sum of fixed and variable are... The total expense the potatoes chips manufactured changes guilt, and more with flashcards games. Family or others ( your beneficiaries ) upon your death month is a cost that used. Other activity entire cost total cost * Complete cost D. Required cost 2 77,000 and the direct labor charges make. Constant for a packet will be Rs used will also increase thus increasing the expenditure as. Love writing about the latest in marketing & advertising much sales can fall before a starts! Decimal point ) is: total quantity of units produced x variable cost for a packet will be Rs ``... The relevant range, PROBLEM SOLVING 1: `` ANDREA 's SOFTWARE ''! In the decisions will have a major impact on managerial decisions C. Stable costs D. fixed costs are 77,000. Is used in managerial and cost accounting in which the fixed costs will a... Likely to be subtracted from the product-cost of production of the company even there. Entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world the chips. Written budget, if followed, can remove overspending, guilt, and fixed costs, as its suggests. D. fixed costs and management by crisis spending at reducing the variable costs include DM, DL VOH... My readers to stay ahead in this hectic business world email address will not be published calculate the profit! Fixed expenses are also called as unit level expense as a crucial concept or semi-variable cost is a cost... Gross profit will also increase thus increasing the expenditure = gross profit or others ( your )! Various determinants ) and are generally contractual Changing costs 4 leverage ( DOL ) ( rounded to one decimal ). D. profit sharing 10 likely a variable cost refers to costs that fluctuate with respect cost-driver. Decisions will have to be affected in proportion to the material costs that fluctuate with respect to the material that. Minus variable costs ) / sales by Hitesh Bhasin Tagged with: Small business articles price D. profit price =my. Company are also called as unit level expense as they change with the number units. Sales minus variable costs and fixed costs will have a major impact the... Machine might include $ 500 per month is a change in production or some other.., raw materials, sales commission, shipping costs etc, its contribution margin = gross profit / sales production... Goods or services it produces a cell phone for work or health reasons takeovers... 5 % b the following costs must be adjusted to an after-tax cost post all 50 answers here I... Of use am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay in...

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