Question

true or false

All cost are reported on the income statement {}

an activity can be the total cost of a product {}

once the future of cost has been received the cost becomes an expense on the income statement {}

The relevant range is the range in which cost behaviors and estimates are valid.()

the data points with the highest cost and lowest cost are used to estimate fixed and variable costs when the high low method is used ()

the amount of net income presented on a functional income statement will be different from the amount of net income presented on a contribution margin format income statement ()

choose

1. When drawing a scattergraph, which of the following is correct?
   1. Identifying the line on the graph is determined by connecting the high point with the low point.
   2. The cost is plotted on the x-axis.
   3. The point where the line crosses the x-axis is the total fixed cost.
2. CalcTown sold 400 calculators during 2011 for a total profit of $4,200. Its contribution margin per unit was $54 and its contribution margin ratio was 30%. If sales revenue increases by $1,800, by how much will operating income increase?
   1. $1,800
   2. $16.20
   3. $1,260
   4. $540

Answer 1

True and False

1 .All cost are reported on the income statement

Ans : False

2.an activity can be the total cost of a product

Ans : False

3.once the future of cost has been received the cost becomes an expense on the income statement

Ans : False

4. The relevant range is the range in which cost behaviors and estimates are valid.

Ans : True

5.the data points with the highest cost and lowest cost are used to estimate fixed and variable costs when the high low method is used

Ans : True

6. the amount of net income presented on a functional income statement will be different from the amount of net income presented on a contribution margin format income statement

Ans. false

When drawing a scattergraph, which of the following is correct?

Ans :

1. Identifying the line on the graph is determined by connecting the high point with the low point.

CalcTown sold 400 calculators during 2011 for a total profit of $4,200. Its contribution margin per unit was $54 and its contribution margin ratio was 30%. If sales revenue increases by $1,800, by how much will operating income increase?

Ans : D $1260 (1800*70/100)