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1. Which of the following items would be considered a fixed cost for the Honolulu Confectioners Company?

a. None of the other answers
b. the cost of sugar for making tasty treats!
c. costs of fuel for the company delivery truck that makes irregular rounds on Oahu dropping off marvelously sumptuous delicacies
d. the monthly lease payment on the factory location that smells so wonderful everyone is happy to work there!
e. labor costs for hourly employees who are carefully watched to ensure that they don't dip their fingers into the vats of delicious candies

2. The newly formed Newton Cat Sitters travels around town with three employees sitting with finicky felines who cannot be without their owners for very long. Newton estimates that their fixed costs for operating the vehicles to travel to and from clients homes is $900 per month with the cost of employee labor and other expenses being roughly $65 per hour. Newton is considering charging $70 per hour for their cat sitting services. How many hours of cat sitting will be needed to begin earning a profit?

a. 13.85 hours
b. 181 hours
c. None of the other answers
d. 180 hours
e. 12.85 hours

3. Please refer back to the Newton Cat Sitters question.

If state law only allows Newton to work employees a maximum of 160 hours each will they be able to attain their necessary profit given the prices/costs listed?

a. Yes
b. No

4. Please refer back to the Newton Cat Sitters question.

If the owner of Newtons (F.G. Newton) wanted to have a net income of $200 next month from cat sitting services, how much in sales dollars need to be recorded to achieve that goal if we were to use the break even with target net income calculation?

a. roughly $15,714
b. about $32,857
c. close to $2,100
d. roughly $28,000
e. None of the other answers

5. Responsibility accounting systems use concepts of controllable costs to assign responsibility for costs and expenses to ________________.

a. rank and file employees.
b. the president and CEO's only.
c. managers.
d. None of the other answers

6. Which costing method would work best for an automobile repair shop that specializes in repairing/restoring rare autos for exotic clients?

a. Process Costing
b. Job Costing

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Solution Summary

The solution explains some multiple chocie questions relating to fixed cost, breakeven and process vs job costing

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1. the monthly lease payment on the factory location that smells so wonderful everyone is happy to work there!

2. Breakeven ...

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