Variable Cost – NBC Institute

QTB – MAY 2017 – L1 – SA – Q2 – Mathematics.

A multiple-choice question calculating the variable cost per unit given total and fixed costs.

Question

A company produces 16,000 units of a product. The total cost of producing these units is N60,000. If the fixed cost is N12,000, the variable cost per unit of the output is:

A. N7.00
B. N6.00
C. N5.00
D. N4.00
E. N3.00

Answer

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Tags: Break-even Analysis, Costing, Fixed Costs, Production Efficiency, Variable Cost
Level: Level 1

Topic: Mathematics
Series: MAY 2017

MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

Question

Direct material is an example of:
A. Fixed cost
B. Variable cost
C. Semi-variable cost
D. Semi-fixed cost
E. Overheads

Answer

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Tags: Direct Cost, Fixed Cost, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: NOV 2022

MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques

Calculate variable and fixed costs using the high-low method based on monthly activity data.

Question

Use the high-low method to calculate the fixed and variable elements of the following costs:

Month	Activity	N
January	600	1,700
February	800	1,900
March	650	1,750
April	850	1,950
May	900	2,100
June	1,350	2,300

A. VC = N0.08/unit, FC = N1120
B. VC = N0.88/unit, FC = N1020
C. VC = N0.80/unit, FC = N1220
D. VC = N0.82/unit, FC = N1320
E. VC = N0.85/unit, FC = N1330

Answer

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Tags: Cost Estimation, Fixed Cost, High-Low Method, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: NOV 2014

MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis

Calculate the break-even point in units.

Question

What will be the Break-even point, in units, where Total fixed cost = N240,000, Selling price = N24 per unit, and Variable cost = N18 per unit?
A. 20,000 units
B. 30,000 units
C. 40,000 units
D. 50,000 units
E. 60,000 units

Answer

Find Related Questions by Tags, levels, etc.

Tags: Break-even Analysis, Fixed Cost, Variable Cost
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAY 2017

MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

Question

In which costing technique are variable costs charged to cost units and period costs written off against contribution?
A. Contract costing
B. Activity-based costing
C. Process costing
D. Marginal costing
E. Batch costing

Answer

Find Related Questions by Tags, levels, etc.

Tags: Costing Techniques, Marginal Costing, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: MAY 2017

MI – May 2017 – L1 – SA – Q4 – Costing Techniques

Identify the cost that varies with capacity utilization.

Question

Which of the following costs vary with capacity utilization?
A. Straight line depreciation
B. Production manager’s salary
C. Factory rent
D. Piece rate wages
E. Plant hire

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capacity Utilization, Cost behavior, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: MAY 2016

MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis

Calculate the contribution/sales ratio given the budgeted sales and costs.

Question

A company budgets to sell 55,000 units of its products at N40 per unit for a variable cost of N15. If the fixed cost for the period is expected to be N340,000, then the contribution/sales ratio is:

A. 60.5
B. 61.5
C. 62.5
D. 63.5
E. 64.5

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contribution margin, Contribution/Sales Ratio, Fixed Cost, Sales, Variable Cost
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAY 2016

MI – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

Question

A company pays a manager a salary of N40,000 monthly when production is below 320 hours. When the production is between 320-640 hours, two managers would be required. This type of cost is called:

A. Fixed cost
B. Variable cost
C. Stepped variable cost
D. Stepped fixed cost
E. Semi-variable cost

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Analysis, Fixed Cost, Semi-Variable Costs, Stepped Costs, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: MAY 2016

IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour

Establishment of total cost function using high-low method, profit calculation for a specific production level, and identification of advantages and disadvantages of high-low method.

Question

a) Takyi Carpentry makes twin-desk for local schools in the Daboase District. To facilitate control, the owner of the shop has asked you to assist him in analysing cost into fixed and variable elements.

Below is his six-year financial information:

Year	No. of Twin-Desk	Revenue (GH¢)	Profit (GH¢)
2016	1,800	19,600	6,000
2017	1,700	22,000	6,200
2018	1,750	20,300	5,800
2019	2,100	26,200	8,000
2020	1,950	22,400	7,500
2021	2,050	21,800	6,800

Required: i) Establish total cost function using high-low method. (5 marks)

ii) Calculate profit for making 3,500 units of the twin-desk if the selling price is fixed at GH¢20. (3 marks)

iii) Identify TWO (2) advantages and TWO (2) disadvantages of using high-low method. (4 marks)

iv) Identify THREE (3) importance for classifying cost as fixed and variable. (3 marks)

b) For managers within a company, exercising control through standards and standard costing is a creative program aimed at determining whether the organisations’ resources are being used optimally. Standard costs are typically determined during the budgetary control process because it uses predetermined standard costs for direct material, direct labour and factory overheads.

Required: Explain THREE (3) benefits to a company that uses standard costing. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Classification, Cost Function, Fixed Cost, High-Low Method, Profit Calculation, Variable Cost
Level: Level 1

Topic: Cost and Cost Behaviour
Series: AUG 2022

QTB – MAY 2017 – L1 – SA – Q2 – Mathematics.

A multiple-choice question calculating the variable cost per unit given total and fixed costs.

Question

A company produces 16,000 units of a product. The total cost of producing these units is N60,000. If the fixed cost is N12,000, the variable cost per unit of the output is:

A. N7.00
B. N6.00
C. N5.00
D. N4.00
E. N3.00

Answer

Find Related Questions by Tags, levels, etc.

Tags: Break-even Analysis, Costing, Fixed Costs, Production Efficiency, Variable Cost
Level: Level 1

Topic: Mathematics
Series: MAY 2017

MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

Question

Direct material is an example of:
A. Fixed cost
B. Variable cost
C. Semi-variable cost
D. Semi-fixed cost
E. Overheads

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Cost, Fixed Cost, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: NOV 2022

MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques

Calculate variable and fixed costs using the high-low method based on monthly activity data.

Question

Use the high-low method to calculate the fixed and variable elements of the following costs:

Month	Activity	N
January	600	1,700
February	800	1,900
March	650	1,750
April	850	1,950
May	900	2,100
June	1,350	2,300

A. VC = N0.08/unit, FC = N1120
B. VC = N0.88/unit, FC = N1020
C. VC = N0.80/unit, FC = N1220
D. VC = N0.82/unit, FC = N1320
E. VC = N0.85/unit, FC = N1330

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Estimation, Fixed Cost, High-Low Method, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: NOV 2014

MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis

Calculate the break-even point in units.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Break-even Analysis, Fixed Cost, Variable Cost
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAY 2017

MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Costing Techniques, Marginal Costing, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: MAY 2017

MI – May 2017 – L1 – SA – Q4 – Costing Techniques

Identify the cost that varies with capacity utilization.

Question

Which of the following costs vary with capacity utilization?
A. Straight line depreciation
B. Production manager’s salary
C. Factory rent
D. Piece rate wages
E. Plant hire

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capacity Utilization, Cost behavior, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: MAY 2016

MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis

Calculate the contribution/sales ratio given the budgeted sales and costs.

Question

A company budgets to sell 55,000 units of its products at N40 per unit for a variable cost of N15. If the fixed cost for the period is expected to be N340,000, then the contribution/sales ratio is:

A. 60.5
B. 61.5
C. 62.5
D. 63.5
E. 64.5

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contribution margin, Contribution/Sales Ratio, Fixed Cost, Sales, Variable Cost
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAY 2016

MI – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

Question

A company pays a manager a salary of N40,000 monthly when production is below 320 hours. When the production is between 320-640 hours, two managers would be required. This type of cost is called:

A. Fixed cost
B. Variable cost
C. Stepped variable cost
D. Stepped fixed cost
E. Semi-variable cost

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Analysis, Fixed Cost, Semi-Variable Costs, Stepped Costs, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: MAY 2016

IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour

Establishment of total cost function using high-low method, profit calculation for a specific production level, and identification of advantages and disadvantages of high-low method.

Question

Below is his six-year financial information:

Year	No. of Twin-Desk	Revenue (GH¢)	Profit (GH¢)
2016	1,800	19,600	6,000
2017	1,700	22,000	6,200
2018	1,750	20,300	5,800
2019	2,100	26,200	8,000
2020	1,950	22,400	7,500
2021	2,050	21,800	6,800

Required: i) Establish total cost function using high-low method. (5 marks)

ii) Calculate profit for making 3,500 units of the twin-desk if the selling price is fixed at GH¢20. (3 marks)

iii) Identify TWO (2) advantages and TWO (2) disadvantages of using high-low method. (4 marks)

iv) Identify THREE (3) importance for classifying cost as fixed and variable. (3 marks)

Required: Explain THREE (3) benefits to a company that uses standard costing. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Classification, Cost Function, Fixed Cost, High-Low Method, Profit Calculation, Variable Cost
Level: Level 1

Topic: Cost and Cost Behaviour
Series: AUG 2022

Question Tag: Variable Cost

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QTB – MAY 2017 – L1 – SA – Q2 – Mathematics.

A multiple-choice question calculating the variable cost per unit given total and fixed costs.

You're reporting an error for "QTB – MAY 2017 – L1 – SA – Q2 – Mathematics."

MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

You're reporting an error for "MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications"

MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques

Calculate variable and fixed costs using the high-low method based on monthly activity data.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques"

MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis

Calculate the break-even point in units.

You're reporting an error for "MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis"

MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

You're reporting an error for "MI – May 2017 – L1 – SA – Q6 – Costing Techniques"

MI – May 2017 – L1 – SA – Q4 – Costing Techniques

Identify the cost that varies with capacity utilization.

You're reporting an error for "MI – May 2017 – L1 – SA – Q4 – Costing Techniques"

MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis

Calculate the contribution/sales ratio given the budgeted sales and costs.

You're reporting an error for "MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis"

MI – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

You're reporting an error for "MI – May 2016 – L1 – SA – Q1 – Cost Classifications"

IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour

Establishment of total cost function using high-low method, profit calculation for a specific production level, and identification of advantages and disadvantages of high-low method.

You're reporting an error for "IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour"

QTB – MAY 2017 – L1 – SA – Q2 – Mathematics.

A multiple-choice question calculating the variable cost per unit given total and fixed costs.

You're reporting an error for "QTB – MAY 2017 – L1 – SA – Q2 – Mathematics."

MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

You're reporting an error for "MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications"

MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques

Calculate variable and fixed costs using the high-low method based on monthly activity data.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q1 – Costing Techniques"

MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis

Calculate the break-even point in units.

You're reporting an error for "MI – May 2017 – L1 – SA – Q8 – Cost-Volume-Profit (CVP) Analysis"

MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

You're reporting an error for "MI – May 2017 – L1 – SA – Q6 – Costing Techniques"

MI – May 2017 – L1 – SA – Q4 – Costing Techniques

Identify the cost that varies with capacity utilization.

You're reporting an error for "MI – May 2017 – L1 – SA – Q4 – Costing Techniques"

MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis

Calculate the contribution/sales ratio given the budgeted sales and costs.

You're reporting an error for "MI – May 2016 – L1 – SA – Q9 – Cost-Volume-Profit (CVP) Analysis"

MI – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

You're reporting an error for "MI – May 2016 – L1 – SA – Q1 – Cost Classifications"

IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour

Establishment of total cost function using high-low method, profit calculation for a specific production level, and identification of advantages and disadvantages of high-low method.

You're reporting an error for "IMAC – AUG 2022 – L1 – Q5 – Costs and Cost Behaviour"

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