16. (TCO 9) If the activity level increases 10%, total variable costs will _____

Question

16. (TCO 9) If the activity level increases 10%, total variable costs will _____.
(Points : 5)        remain the same
       increase by more than 10%
       decrease by less than 10%
       increase 10% Question 17. 17. (TCO 9) At the high level of activity in November, 7,000 machine hours were run and power costs were $12,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? (Points : 5)        $12,000
       $6,000
       $3,600
       $8,400 Question 18. 18. (TCO 10) What is the method used to determine whether the budgeting process is operating effectively? (Points : 5)        Budget evaluation
       Budget review
       Budget appraisal
       Budget audit 16. (TCO 9) If the activity level increases 10%, total variable costs will _____.
(Points : 5)        remain the same
       increase by more than 10%
       decrease by less than 10%
       increase 10%

Explanation / Answer

16)increase 10%

17)

Variable Cost per machine hour = (12000-6000)/(7000-2000)=$1.2 per Machine Hour

Fixed Cost Element = 12000-(7000*1.2)= $3600

18)Budget audit  is the method used to determine whether the budgeting process is operating effectively

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