Question 1

For retailers and service companies without inventory,operating income is different if a traditional income statement or a contribution margin income statement is prepared.

Accepted Answer

A) True 
 B)False

Question 2

The HF Corporation manufactures and sells toy gyroscopes.The following data is related to sales and production of the toy gyroscopes for last year.
 
Using absorption costing,what is gross profit for last month?

Accepted Answer

A) $903,000 
B) $1,497,000 
C) $1,200,000 
D) $3,703,000 
A) $903,000 
B) $1,497,000 
C) $1,200,000 
D) $3,703,000

Question 3

What data point can be used to solve for the fixed cost component when using the high-low method?

Accepted Answer

A) The "high" month 
B) Either the "high" or the "low" month 
C) The "low" month 
D) Any month in the data set 
A) The "high" month 
B) Either the "high" or the "low" month 
C) The "low" month 
D) Any month in the data set

Question 4

When a merchandiser prepares a contribution margin income statement,Cost of Goods Sold is always a variable cost.

Accepted Answer

A) True 
 B)False

Question 5

In a regression output,the "X variable 1 coefficient" represents the variable cost component of a mixed cost equation.

Accepted Answer

A) True 
 B)False

Question 6

Maryland Incorporated produces toys.Total manufacturing costs are $350,000 when 50,000 toys are produced.Of this amount,total variable costs are $100,000.What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels. )

Accepted Answer

A) $150,000 
B) $400,000 
C) $500,000 
D) $525,000 
A) $150,000 
B) $400,000 
C) $500,000 
D) $525,000

Question 7

What factor related to manufacturing costs causes the difference between operating income computed using absorption costing and operating income computed using variable costing?

Accepted Answer

A) Absorption costing expenses all costs,whether fixed or variable. 
B) Absorption costing "inventories" all direct manufacturing costs. 
C) Absorption costing "inventories" all fixed manufacturing costs. 
D) Absorption costing "inventories" all fixed manufacturing and period costs. 
A) Absorption costing expenses all costs,whether fixed or variable. 
B) Absorption costing "inventories" all direct manufacturing costs. 
C) Absorption costing "inventories" all fixed manufacturing costs. 
D) Absorption costing "inventories" all fixed manufacturing and period costs.

Question 8

Using account analysis,what type of cost is the fee the airline company charges for your bags? A typical policy is $25 if the bag weighs between 0 and 50 lbs. ;$75 if the bag weighs between 50 and 75 lbs.and $125 if the bag weighs between 75 and 100 lbs.

Accepted Answer

A) Fixed 
B) Mixed 
C) Step 
D) Variable 
A) Fixed 
B) Mixed 
C) Step 
D) Variable

Question 9

If the number of units produced equals the number of units sold for a manufacturer,both variable costing and absorption costing income statements will yield the same gross margin.

Accepted Answer

A) True 
 B)False

Question 10

Steeplechase Building Specialties manufactures metal stud to accommodate commercial framing contractors in the United States.The managerial accountant reported to the operations manager that there is an order to manufacture 2,000 bundles of metal stud during the month.The managerial accountant reported the following information:
 
Determine the cost equation for the managerial accountant and predict the operating costs at a volume of 2,000 bundles of metal stud at Steeplechase Building Specialties.

Accepted Answer

A) $120 
B) $220 
C) $340 
D) $440,120 
A) $120 
B) $220 
C) $340 
D) $440,120

Question 11

For external reporting purposes,U.S.GAAP allows companies to use

Accepted Answer

A) either the traditional format or the contribution margin format. 
B) only the contribution margin format of the income statement. 
C) only the traditional format of the income statement. 
D) the variable costing format. 
A) either the traditional format or the contribution margin format. 
B) only the contribution margin format of the income statement. 
C) only the traditional format of the income statement. 
D) the variable costing format.

Question 12

Discuss and compare absorption costing income statements with variable costing income statements.In your discussion,address the following questions:
a.What is the main difference between the two methods?
b.Under what circumstances will the operating income under each method be the same?
c.What situation will cause the absorption costing income to be higher than the variable costing income?
d.What situation will cause the absorption costing income to be lower than the variable costing income?
e.Why would a company use absorption costing to prepare its income statements?
f.Why would a company use variable costing to prepare its income statements?

Accepted Answer

a.Fixed manufacturing overhead is expens

Question 13

Total fixed costs for Toys and Trinkets Incorporated are $88,000.Total costs,including both fixed and variable,are $155,000 if 268,000 units are produced.The total variable costs at a level of 275,000 units would be

Accepted Answer

A) $68,750. 
B) $159,049. 
C) $90,299. 
D) $151,055. 
A) $68,750. 
B) $159,049. 
C) $90,299. 
D) $151,055.

Question 14

On a traditional income statement,all manufacturing-related costs,whether fixed or variable,are listed

Accepted Answer

A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line. 
A) above the gross profit line. 
B) above the contribution margin line. 
C) below the operating income line. 
D) above the sales line.

Question 15

Absorption costing is required to be used for

Accepted Answer

A) federal income tax reports. 
B) external financial reports,but not income taxes. 
C) neither external financial reports nor income tax reports. 
D) both external financial reports and income tax reports. 
A) federal income tax reports. 
B) external financial reports,but not income taxes. 
C) neither external financial reports nor income tax reports. 
D) both external financial reports and income tax reports.

Question 16

Neon Company manufactures widgets.The following data is related to sales and production of the widgets for last year.
 
Using variable costing,what is the contribution margin for last year?

Accepted Answer

A) $216,700 
B) $68,200 
C) $143,000 
D) $69,300 
A) $216,700 
B) $68,200 
C) $143,000 
D) $69,300

Question 17

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 at a production level of 2,200 birdcages.What is the total cost of producing 2,200 birdcages?

Accepted Answer

A) $39,600 
B) $18.00 
C) $2,218 
D) $122 
A) $39,600 
B) $18.00 
C) $2,218 
D) $122

Question 18

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months.
 
Using the high-low method,what will the total monthly manufacturing costs be if the company produces 9,000 units?

Accepted Answer

A) $8,750 
B) $4,500 
C) $8,400 
D) $4,250 
A) $8,750 
B) $4,500 
C) $8,400 
D) $4,250

Question 19

In the equation y = $7.20x + $790,"x" represents

Accepted Answer

A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above. 
A) number of units produced. 
B) total fixed costs. 
C) total costs. 
D) none of the above.

Question 20

Tasty Treats is a snow cone stand near the local park.To plan for the future,Tasty Treats wants to determine its cost behavior patterns.It has the following information available about its operating costs and the number of snow cones served.
 
Using the high-low method,the fixed costs for a month are

Accepted Answer

A) $980. 
B) $12,660. 
C) $1,500. 
D) $5,320. 
A) $980. 
B) $12,660. 
C) $1,500. 
D) $5,320.

For retailers and service companies without inventory,operating income is different if a traditional income statement or a contribution margin income statement is prepared.

The HF Corporation manufactures and sells toy gyroscopes.The following data is related to sales and production of the toy gyroscopes for last year. Using absorption costing,what is gross profit for last month?

What data point can be used to solve for the fixed cost component when using the high-low method?

When a merchandiser prepares a contribution margin income statement,Cost of Goods Sold is always a variable cost.

In a regression output,the "X variable 1 coefficient" represents the variable cost component of a mixed cost equation.

Maryland Incorporated produces toys.Total manufacturing costs are $350,000 when 50,000 toys are produced.Of this amount,total variable costs are $100,000.What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels. )

What factor related to manufacturing costs causes the difference between operating income computed using absorption costing and operating income computed using variable costing?

Using account analysis,what type of cost is the fee the airline company charges for your bags? A typical policy is $25 if the bag weighs between 0 and 50 lbs. ;$75 if the bag weighs between 50 and 75 lbs.and $125 if the bag weighs between 75 and 100 lbs.

If the number of units produced equals the number of units sold for a manufacturer,both variable costing and absorption costing income statements will yield the same gross margin.

For external reporting purposes,U.S.GAAP allows companies to use

Total fixed costs for Toys and Trinkets Incorporated are $88,000.Total costs,including both fixed and variable,are $155,000 if 268,000 units are produced.The total variable costs at a level of 275,000 units would be

On a traditional income statement,all manufacturing-related costs,whether fixed or variable,are listed

Absorption costing is required to be used for

Neon Company manufactures widgets.The following data is related to sales and production of the widgets for last year. Using variable costing,what is the contribution margin for last year?

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 at a production level of 2,200 birdcages.What is the total cost of producing 2,200 birdcages?

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method,what will the total monthly manufacturing costs be if the company produces 9,000 units?

In the equation y = $7.20x + $790,"x" represents

Tasty Treats is a snow cone stand near the local park.To plan for the future,Tasty Treats wants to determine its cost behavior patterns.It has the following information available about its operating costs and the number of snow cones served. Using the high-low method,the fixed costs for a month are

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 6: Cost Behavior

For retailers and service companies without inventory,operating income is different if a traditional income statement or a contribution margin income statement is prepared.

The HF Corporation manufactures and sells toy gyroscopes.The following data is related to sales and production of the toy gyroscopes for last year. Using absorption costing,what is gross profit for last month?

What data point can be used to solve for the fixed cost component when using the high-low method?

When a merchandiser prepares a contribution margin income statement,Cost of Goods Sold is always a variable cost.

In a regression output,the "X variable 1 coefficient" represents the variable cost component of a mixed cost equation.

Maryland Incorporated produces toys.Total manufacturing costs are $350,000 when 50,000 toys are produced.Of this amount,total variable costs are $100,000.What are the total production costs when 75,000 toys are produced? (Assume the same relevant range for both production levels. )

What factor related to manufacturing costs causes the difference between operating income computed using absorption costing and operating income computed using variable costing?

Using account analysis,what type of cost is the fee the airline company charges for your bags? A typical policy is $25 if the bag weighs between 0 and 50 lbs. ;$75 if the bag weighs between 50 and 75 lbs.and $125 if the bag weighs between 75 and 100 lbs.

If the number of units produced equals the number of units sold for a manufacturer,both variable costing and absorption costing income statements will yield the same gross margin.

For external reporting purposes,U.S.GAAP allows companies to use

Total fixed costs for Toys and Trinkets Incorporated are $88,000.Total costs,including both fixed and variable,are $155,000 if 268,000 units are produced.The total variable costs at a level of 275,000 units would be

On a traditional income statement,all manufacturing-related costs,whether fixed or variable,are listed

Absorption costing is required to be used for

Neon Company manufactures widgets.The following data is related to sales and production of the widgets for last year. Using variable costing,what is the contribution margin for last year?

Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 at a production level of 2,200 birdcages.What is the total cost of producing 2,200 birdcages?

To follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months. Using the high-low method,what will the total monthly manufacturing costs be if the company produces 9,000 units?

In the equation y = $7.20x + $790,"x" represents

Tasty Treats is a snow cone stand near the local park.To plan for the future,Tasty Treats wants to determine its cost behavior patterns.It has the following information available about its operating costs and the number of snow cones served. Using the high-low method,the fixed costs for a month are

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters