University of Louisiana at Lafayette ACCT 526 Final Exam Managerial Accounting Overhead Application Rate Regression Analysis High Low Method Cost Behavior Discretionary Fixed Costs Contribution Margin CVP Analysis Break Even Point Variable vs Fixed Costs

University of Louisiana at Lafayette ACCT 526 Final Exam Managerial Accounting Overhead Application Rate Regression Analysis High Low Method Cost Behavior Discretionary Fixed Costs Contribution Margin CVP Analysis Break Even Point Variable vs Fixed Costs Cost Equations Decision Making Sunk Costs Make or Buy Analysis Income Statement Formats Financial Calculations Exam Questions Verified and Provided with Complete A+ Graded Answers Latest Updated 2026 Overhead costs are assigned to production using an overhead application rate, whereas no such application rate is used to assign the costs of direct materials and direct labor to production. The reason for this difference in procedures is that: overhead is an indirect cost which cannot be traced easily and directly to specific units of product An advantage of using regression analysis over the high-low and scattergraph methods is that regression analysis is a more precise approach than the high-low or scattergraph methods An example of a discretionary fixed cost is: management training Tucker, Inc collected the following production data for the past month: Units Produced Total Cost 1,600 1,300 1,500 1,100 $22,000 19,000 22,500 16,500 If the high-low method is used, what is the monthly total cost equation? Total cost = $4,400 + $11/unit Roddy Company has the following cost formulas for overhead: Cost Indirect materials Maintenance Machine setup Utilities Depreciation Cost Formula $2,000 + $0.40/machine hour $1,500 + $0.60/machine hour $0.30/machine hour$200 + $0.10/machine hour $800 Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be: $5,340 When comparing a traditional income statement to a contribution margin income statement: net income will always be identical on both Kendra Corporation sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is $200,000. What should be reported as variable expenses in the CVP income statement? $700,000 Snyder Corporation, which produces and sells a single product, recently experienced an increase in fixed costs relating to depreciation on new equipment. If variable costs and sales price remain unchanged, what will happen to contribution margin and the break-even point? contribution margin will be unchanged and the break-even point will increase The following is last month's contribution format (CVP) income statement: Sales (10,000 units) Less: variable expenses Contribution margin Less: fixed expenses Net income $1,200,000 800,000 400,000 240,000 $160,000 What is the company's break-even sales in units? 6,000 units A 45% contribution margin ratio means that: 45% of the company's revenue is available to cover fixed costs and to contribute toward operating income. Suppose Motel 6 has annual fixed costs applicable to its rooms of $1.2 million for its 300-room motel, average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365 days per year. How much net income on rooms will be generated if the motel is completely full throughout the entire year? $3,180,000 Brant Company manufactures a part for its production cycle. The costs per unit for 5,000 units of this part are as follows: Direct materials $3 Direct labor 5 Variable factory overhead 4 Fixed factory overhead 2 Total costs $14 The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Brant Company should be willing to pay for the part is $12 In a decision to retain or replace equipment, the book value of the old equipment is a: sunk cost A segment of Duke Inc has the following data: Sales $200,000 Variable expenses $140,000 Fixed expenses $100,000 If this segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. $10,000 decrease Which of the following are risks of outsourcing the production of a part?