accounting test 2  Your client's company wants to determind the relationship between its monthly operating costs and a potential cost drive

1. Your client's company wants to determind the relationship between its monthly operating costs and a potential cost drive. The output of regression analysis showed the following information
   
   intercept coefficient= 89,500
   x variable 1 coefficient= 62.50
   r-square= .9855
   
   What is the company's monthly cost operation?
   (a) y= $89,500x + $62.98
   (b) y= $62.50x + $89,500
   (c) y= $89500x + $98.55
   (d) y= $98.55x + $89,500

(b) y= $62.50x + $89,500

2. A contribution margin income statement allows managers to see which costs will change with changes in volume and which costs will remain fixed
   TRUE
   FALSE

TRUE

3. The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.
   TRUE
   FALSE

TRUE

4. The contribution margin income statement presents _____ below the contribution margin line
   (a) all fixed expenses
   (b) only variable expenses relating to selling and administrative activities
   (c) only fixed expenses relating to selling and admin fees
   (d) all variable expenses

(a) all fixed expenses

5. Regression analysis is found by using only the two data points of the highest and lowest volume
   TRUE
   FALSE

FALSE

6. A product's contribution margin per unit is the excess of the selling price per unit over the variable cost of obtaining and selling each unit
   TRUE
   FALSE

TRUE

7. The breakeven point is the sales level where operating income is positive
   TRUE
   FALSE

FALSE

8. Mom and Pop's ice crem shoppe Mom and Pop's ice cream shoppe sells ice cream cones for $5 per customer. Variable costs are $2.25 per cone. Fixed costs are $3,000 per month. What is the company's contribution margin ratio?
   (a) 3%
   (b) 182%
   (c) 55%
   (d) 45%

(c) 55%

9. Fave Motion Pictures sells movie tickets for $10 per movie patron. Variable costs are $7.50 per movie patron and fixed costs are $50,000 per month. The company's relevant range extends to 35,000 movie patrons per month. What is Fave Motion Pictures' projected operating income is 25,000 movie patrons see movies during a month?
   (a) $62,500
   (b) $200,000
   (c) $250,000
   (d) $12,500

(d) 12,500

10. CVP stands for Company-Value-Profit
    TRUE
    FALSE

FALSE