MULTIPLE CHOICE $-$ Choose the one alternative that best completes the statement or answers the question.

$1)$ What would be the classification of corporate controller's salary?

A$)$ Manufacturing cost.

B$)$ Product cost.

C$)$ Administrative cost.

D$)$ Selling cost.

$2)$ How should the cost of the fire insurance for a manufacturing plant be classified?

A$)$ Prime cost.

B$)$ Product cost.

C$)$ Period cost.

D$)$ Variable cost.

$3)$ The advertising costs incurred by Pepsi to air its commercials during the hockey season can best be described as a:

A$)$ Variable cost.

B$)$ Fixed cost.

C$)$ Prime cost.

D$)$ Conversion cost.

$4)$ Prime costs consist of:

A$)$ Direct Labour and Manufacturing Overhead.

B$)$ Direct Material and Direct Labour.

C$)$ Direct Material and Manufacturing overhead.

D$)$ Direct Material, Direct Labour and Manufacturing Overhead.

$5)$ Last month, when $10,000$ units of a product were manufactured, the cost per unit was $$60.$ At this level of activity, variable costs were $50\%$ of total unit costs. If $10,500$ units are manufactured next month and cost behaviour patterns remain unchanged, how will costs be affected?

A$)$ Total variable costs will remain unchanged.

B$)$ Fixed costs will increase in total.

C$)$ Variable cost per unit will increase.

D$)$ Total cost per unit will decrease.

$6)$ The Payless store in your hometown is one of many Payless department stores across the province. Some of the costs associated with the store in your hometown last month appear below:

Shoe department cost of sales $$80,000$

Other department salaries $$62,000$

Store managers salary $$14,000$

Shoe department sales commissions $$8,000$

Store utilities $$13,000$

Shoe department manager's salary $$9,000$

Store lease cost $$11,000$

Store janitorial costs $$11,000$

Other store costs $$98,000$

The Shoe department is one of many departments in the hometown store. The direct costs of the Shoe department total are:

A$)$ $$80,000$

B$)$ $$88,000$

C$)$ $$97,000$

D$)$ $$108,000$

$7)$ Which costs will change with a decrease in activity within the relevant range?

A$)$ Total fixed costs and total variable costs.

B$)$ Unit fixed cost and total variable costs.

C$)$ Unit variable cost and unit fixed cost.

D$)$ Unit fixed cost and total fixed costs.

$8)$ The linear equation Y $=$ a $+$ bX is often used to express cost formulas. Which of the following representations in this equation is correct?

A$)$ The term $$b$\text{'}$ represents variable cost per unit of activity.

B$)$ The term $$a$\text{'}$ represents variable cost in total.

C$)$ The term $$X$\text{'}$ represents total costs.

D$)$ The term $$Y$\text{'}$ represents total fixed costs.

$9)$ In describing the cost formula equation Y $=$ a $+$ bX$,$ which of the following statements is correct?

A$)$ The X term is the dependent variable.

B$)$ The a term is the fixed component.

C$)$ In the high$-$low method, the b term equals change in activity divided by change in costs.

D$)$ As the X term increases, the Y term decreases.

$10)$ The following data pertain to activity and costs for two months:

June July

Activity level in units $10,00020,000$

Variable costs $$20,000?$

Fixed costs $15,000?$

Mixed costs $10,000?$

Total costs $$45,000$ $$70,000$

Assuming that these activity levels are within the relevant range, what were the mixed costs for July?

A$)$ $$10,000$

B$)$ $$15,000$

C$)$ $$35,000$

D$)$ $$40,000$

$11)$ An analysis of past maintenance costs indicates that maintenance cost is an average of $$0\mathrm{.}20$ per machine hour at an activity level of $10,000$ machine hours and $$0\mathrm{.}25$ per machine hour at an activity level of $8,000$ machine hours. Assuming that this activity is within the relevant range, what is the total expected maintenance cost if the activity level is $8,700$ machine hours?

A$)$ $$400$

B$)$ $$1,740$

C$)$ $$2,000$

D$)$ $$2,250$

$12)$ Brasher Company manufactures and sells a single product that has a positive contribution margin. If the selling price and variable expenses both decrease by $5\%$ and fixed expenses do not change, then what would be the effect on the contribution margin per unit and the contribution margin ratio?

Contribution margin per unit Contribution margin ratio

A$)$ Decrease Decrease

B$)$ Decrease No change

C$)$ No change Decrease

D$)$ No change No change

A$)$ Option A

B$)$ Option B

C$)$ Option C

D$)$ Option D

$13)$ How is the margin of safety percentage computed?

A$)$ Break$-$even sales divided by Total sales.

B$)$ Total sales minus Break$-$even sales.

C$)($Total sales $-$ Break$-$even sales$)$ divided by Break$-$even sales.

D$)($Total sales $-$ Break$-$even sales$)$ divided by Total sales.

$14)$ A company has provided the following data:

Sales $5,000$ units

Sales price $$100$ per unit

Variable cost $$70$ per unit

Fixed cost $$30,000$

If the sales volume decreased by $20\%,$ variable costs increase by $10\%,$ and all factors remain the same, what will happen to operating income?

A$)$ Decrease by $$35,000.$

B$)$ Decrease by $$58,000.$

C$)$ Decrease by $$75,00.$

D$)$ No change in operating income.

$15)$ Kelly Sportswear manufactures a specialty line of T$-$shirts. The company uses a job$-$order costing system. During