Question 1

Outsourcing production will

Accepted Answer

A) reduce fixed costs and increase variable costs. 
B) reduce variable costs and increase fixed costs. 
C) have no effect on the relative proportion of fixed and variable costs. 
D) make the company more susceptible to economic swings. 
A) reduce fixed costs and increase variable costs. 
B) reduce variable costs and increase fixed costs. 
C) have no effect on the relative proportion of fixed and variable costs. 
D) make the company more susceptible to economic swings. A

Question 2

Companies recognize fixed manufacturing overhead costs as period costs (expenses) when incurred when using

Accepted Answer

A) full costing. 
B) absorption costing. 
C) product costing. 
D) variable costing. 
A) full costing. 
B) absorption costing. 
C) product costing. 
D) variable costing. D

Question 3

If Sprinkle Industries has a margin of safety ratio of .60, it could sustain a 60 percent decline in sales before it would be operating at a loss.

Accepted Answer

A) True 
 B)False  True

Question 4

The required sales in units to achieve a target net income is

Accepted Answer

A) (sales + target net income) divided by contribution margin per unit. 
B) (sales + target net income) divided by contribution margin ratio. 
C) (fixed cost + target net income) divided by contribution margin per unit. 
D) (fixed cost + target net income) divided by contribution margin ratio. 
A) (sales + target net income) divided by contribution margin per unit. 
B) (sales + target net income) divided by contribution margin ratio. 
C) (fixed cost + target net income) divided by contribution margin per unit. 
D) (fixed cost + target net income) divided by contribution margin ratio.

Question 5

Reducing reliance on human workers and instead investing heavily in computers and online technology will

Accepted Answer

A) reduce fixed costs and increase variable costs. 
B) reduce variable costs and increase fixed costs. 
C) have no effect on the relative proportion of fixed and variable costs. 
D) make the company less susceptible to economic swings. 
A) reduce fixed costs and increase variable costs. 
B) reduce variable costs and increase fixed costs. 
C) have no effect on the relative proportion of fixed and variable costs. 
D) make the company less susceptible to economic swings.

Question 6

The contribution margin ratio is

Accepted Answer

A) sales divided by contribution margin. 
B) sales divided by fixed expenses. 
C) sales divided by variable expenses. 
D) contribution margin divided by sales. 
A) sales divided by contribution margin. 
B) sales divided by fixed expenses. 
C) sales divided by variable expenses. 
D) contribution margin divided by sales.

Question 7

Use the following information for questions 
Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2015-2017. Sales were 20 units in 2015, 16 units in 2016, and 24 units in 2017.
-Income under variable costing for 2017 is

Accepted Answer

A) $19,800. 
B) $23,400. 
C) $24,600. 
D) $28,200. 
A) $19,800. 
B) $23,400. 
C) $24,600. 
D) $28,200.

Question 8

Use the following information for questions 
Mercantile Corporation has sales of $2,000,000, variable costs of $800,000, and fixed costs of $900,000.
-Mercantile's margin of safety ratio is

Accepted Answer

A) .15. 
B) .25. 
C) .33. 
D) .75. 
A) .15. 
B) .25. 
C) .33. 
D) .75.

Question 9

Use the following information for questions 
Sprinkle Co. sells its product for $60 per unit. During 2016, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $15, direct labor $9, and variable overhead $3. Fixed costs are: $720,000 manufacturing overhead, and $90,000 selling and administrative expenses.
-The per unit manufacturing cost under variable costing is

Accepted Answer

A) $24. 
B) $27. 
C) $39. 
D) $40. 
A) $24. 
B) $27. 
C) $39. 
D) $40.

Question 10

According to the theory of constraints, a company must identify its constraints and find ways to reduce or eliminate them.

Accepted Answer

A) True 
 B)False

Question 11

Some fixed manufacturing costs of the current period are deferred to future periods through ending inventory under variable costing.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information for questions 
Sprinkle Co. sells its product for $60 per unit. During 2016, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $15, direct labor $9, and variable overhead $3. Fixed costs are: $720,000 manufacturing overhead, and $90,000 selling and administrative expenses.
-Ending inventory under variable costing is

Accepted Answer

A) $270,000. 
B) $390,000. 
C) $600,000. 
D) $1,350,000. 
A) $270,000. 
B) $390,000. 
C) $600,000. 
D) $1,350,000.

Question 13

In a CVP income statement, cost of goods sold is generally

Accepted Answer

A) completely a variable cost. 
B) completely a fixed cost. 
C) neither a variable cost nor a fixed cost. 
D) partly a variable cost and partly a fixed cost. 
A) completely a variable cost. 
B) completely a fixed cost. 
C) neither a variable cost nor a fixed cost. 
D) partly a variable cost and partly a fixed cost.

Question 14

In 2016, Teller Company sold 3,000 units at $600 each.Variable expenses were $420 per unit, and fixed expenses were $270,000.The same selling price, variable expenses, and fixed expenses are expected for 2017.What is Teller's break-even point in sales dollars for 2017?

Accepted Answer

A) $900,000 
B) $2,700,000 
C) $1,800,000 
D) $2,571,429 
A) $900,000 
B) $2,700,000 
C) $1,800,000 
D) $2,571,429

Question 15

Use the following information for questions 
Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2015-2017. Sales were 20 units in 2015, 16 units in 2016, and 24 units in 2017.
-Income under variable costing for 2016 is

Accepted Answer

A) $4,800. 
B) $8,400. 
C) $9,600. 
D) $13,200. 
A) $4,800. 
B) $8,400. 
C) $9,600. 
D) $13,200.

Question 16

Net income can be increased or decreased by changing the sales mix.

Accepted Answer

A) True 
 B)False

Question 17

Selling and administrative costs are period costs under both absorption and variable costing.

Accepted Answer

A) True 
 B)False

Question 18

If Buttercup, Inc.sells two products with a sales mix of 75% : 25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120.

Accepted Answer

A) True 
 B)False

Question 19

The CVP income statement classifies costs

Accepted Answer

A) as variable or fixed and computes contribution margin. 
B) by function and computes a contribution margin. 
C) as variable or fixed and computes gross margin. 
D) by function and computes a gross margin. 
A) as variable or fixed and computes contribution margin. 
B) by function and computes a contribution margin. 
C) as variable or fixed and computes gross margin. 
D) by function and computes a gross margin.

Question 20

Use the following information for questions 
MacCloud Industries has two divisions-Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available: $\begin{array}{lrr}&\text { Standard Division }&\text { Premium Division }&\text { Total }\
\text { Sales } & \$ 400,000 & \$ 600,000 &\$1,000,000\
\text { Variable costs } & 280,000 & 360,000\
\text { Contribution margin }&\$120,000&\$240,000\\text { Total fixed costs }&&&\$300,000
\end{array}$
-What is the break-even point in dollars?

Accepted Answer

A) $108,000 
B) $833,333 
C) $857,143 
D) $882,353 
A) $108,000 
B) $833,333 
C) $857,143 
D) $882,353

Outsourcing production will

Companies recognize fixed manufacturing overhead costs as period costs (expenses) when incurred when using

If Sprinkle Industries has a margin of safety ratio of .60, it could sustain a 60 percent decline in sales before it would be operating at a loss.

The required sales in units to achieve a target net income is

Reducing reliance on human workers and instead investing heavily in computers and online technology will

The contribution margin ratio is

Use the following information for questions Mercantile Corporation has sales of $2,000,000, variable costs of $800,000, and fixed costs of $900,000. -Mercantile's margin of safety ratio is

According to the theory of constraints, a company must identify its constraints and find ways to reduce or eliminate them.

Some fixed manufacturing costs of the current period are deferred to future periods through ending inventory under variable costing.

In a CVP income statement, cost of goods sold is generally

In 2016, Teller Company sold 3,000 units at $600 each.Variable expenses were $420 per unit, and fixed expenses were $270,000.The same selling price, variable expenses, and fixed expenses are expected for 2017.What is Teller's break-even point in sales dollars for 2017?

Net income can be increased or decreased by changing the sales mix.

Selling and administrative costs are period costs under both absorption and variable costing.

If Buttercup, Inc.sells two products with a sales mix of 75% : 25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120.

The CVP income statement classifies costs

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

Filters

Exam 6: Reporting and Analyzing Inventory

Outsourcing production will

Companies recognize fixed manufacturing overhead costs as period costs (expenses) when incurred when using

If Sprinkle Industries has a margin of safety ratio of .60, it could sustain a 60 percent decline in sales before it would be operating at a loss.

The required sales in units to achieve a target net income is

Reducing reliance on human workers and instead investing heavily in computers and online technology will

The contribution margin ratio is

Use the following information for questions Mercantile Corporation has sales of $2,000,000, variable costs of $800,000, and fixed costs of $900,000. -Mercantile's margin of safety ratio is

According to the theory of constraints, a company must identify its constraints and find ways to reduce or eliminate them.

Some fixed manufacturing costs of the current period are deferred to future periods through ending inventory under variable costing.

In a CVP income statement, cost of goods sold is generally

In 2016, Teller Company sold 3,000 units at $600 each.Variable expenses were $420 per unit, and fixed expenses were $270,000.The same selling price, variable expenses, and fixed expenses are expected for 2017.What is Teller's break-even point in sales dollars for 2017?

Net income can be increased or decreased by changing the sales mix.

Selling and administrative costs are period costs under both absorption and variable costing.

If Buttercup, Inc.sells two products with a sales mix of 75% : 25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120.

The CVP income statement classifies costs

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

Filters