Question 1

The boundaries of cost driver activity within which a specific relationship between costs and the cost driver is valid.

Accepted Answer

The answer of The boundaries of cost driver activity within...

Question 2

Gross margin is

Accepted Answer

A)  the excess of gross profit over operating expenses. 
B)  the excess of sales over the cost of goods sold. 
C)  also referred to as net profit. 
D)  the same as contribution margin. 
A)  the excess of gross profit over operating expenses. 
B)  the excess of sales over the cost of goods sold. 
C)  also referred to as net profit. 
D)  the same as contribution margin.

Question 3

Reese, Inc. produces pliers. Each pair of pliers sells for $8.00. Variable costs per unit total $5.60 of which $2.50 is for direct materials and $2.10 is for direct labour.
-If total fixed costs are $174,000, then the break-even point in units is

Accepted Answer

A)  31,071. 
B)  37,826. 
C)  72,500. 
D)  21,750. 
A)  31,071. 
B)  37,826. 
C)  72,500. 
D)  21,750.

Question 4

As the level of activity decreases within the relevant range,

Accepted Answer

A)  total fixed costs increases. 
B)  fixed costs per unit decreases. 
C)  total variable costs decreases. 
D)  variable costs per unit decreases. 
A)  total fixed costs increases. 
B)  fixed costs per unit decreases. 
C)  total variable costs decreases. 
D)  variable costs per unit decreases.

Question 5

A fixed cost is fixed per unit.

Accepted Answer

A) True 
 B)False

Question 6

If the contribution-margin ratio is .30, targeted net income is $64,000, and targeted sales volume in dollars is $400,000, then total fixed costs are

Accepted Answer

A)  $56,000. 
B)  $120,000. 
C)  $36,800. 
D)  $19,200. 
A)  $56,000. 
B)  $120,000. 
C)  $36,800. 
D)  $19,200.

Question 7

If the sales price per unit is $200.00, the unit variable cost is $148.00, and total fixed costs are $164,000, then the break-even volume in dollar sales rounded to the nearest whole dollar is

Accepted Answer

A)  $630,769. 
B)  $221,622. 
C)  $1,640,000. 
D)  $206,308. 
A)  $630,769. 
B)  $221,622. 
C)  $1,640,000. 
D)  $206,308.

Question 8

Thornburg Corporation manufactures lamps. Given the following financial data:   Required:
a. Compute the contribution margin per unit.
b. Compute the break-even point in units.
c. Compute the break-even volume in dollars.

Accepted Answer

a. $13 - $8 = $5 per

Question 9

If the sales price per unit is $17.00, the unit variable cost is $13.50, and the break-even point is 78,000 units, then the total fixed costs are

Accepted Answer

A)  $105,300. 
B)  $89,140. 
C)  $273,000. 
D)  $156,000. 
A)  $105,300. 
B)  $89,140. 
C)  $273,000. 
D)  $156,000.

Question 10

A cost that changes in direct proportion to changes in the cost driver is a

Accepted Answer

A)  fixed cost. 
B)  joint cost. 
C)  mixed cost. 
D)  variable cost. 
A)  fixed cost. 
B)  joint cost. 
C)  mixed cost. 
D)  variable cost.

Question 11

Activities that affect costs.

Accepted Answer

The answer of Activities that affect costs....

Question 12

The margin of safety

Accepted Answer

A)  equals break-even unit sales less actual unit sales. 
B)  shows how far sales can fall below the planned level before losses occur. 
C)  is the sales price minus all the variable expenses. 
D)  is the same as break-even point. 
A)  equals break-even unit sales less actual unit sales. 
B)  shows how far sales can fall below the planned level before losses occur. 
C)  is the sales price minus all the variable expenses. 
D)  is the same as break-even point.

Question 13

The sales price minus all the variable expenses per unit.

Accepted Answer

The answer of The sales price minus all the variable...

Question 14

If total fixed costs are $62,000, contribution margin per unit is $5.00, and targeted after-tax net income is $12,000 with a 40 percent tax rate, then the number of units that must be sold is

Accepted Answer

A)  16,400. 
B)  14,800. 
C)  24,667. 
D)  11,440. 
A)  16,400. 
B)  14,800. 
C)  24,667. 
D)  11,440.

Question 15

The following information is for Lyceum, Ltd.:
  
-If management has a targeted net income of $21,000 (ignore income taxes), then the number of units which must be sold is

Accepted Answer

A)  2,036. 
B)  2,336. 
C)  6,540. 
D)  5,700. 
A)  2,036. 
B)  2,336. 
C)  6,540. 
D)  5,700.

Question 16

Use the following information to answer the next question(s).
  
-The contribution margin ratio is

Accepted Answer

A)  15%. 
B)  45%. 
C)  50%. 
D)  55%. 
A)  15%. 
B)  45%. 
C)  50%. 
D)  55%.

Question 17

Sales mix is defined as the relative proportions of products that comprise total sales.

Accepted Answer

A) True 
 B)False

Question 18

Break-even is the point at which the company achieves its targeted net income.

Accepted Answer

A) True 
 B)False

Question 19

When changes occur in the sales mix, there is no effect on the cost-volume-profit relationships.

Accepted Answer

A) True 
 B)False

Question 20

Assume the following cost information for Quayle Corporation:
  
-If fixed costs increased by 10 percent, and management wanted to maintain the original break-even point, then the selling price per unit would have to be increased to

Accepted Answer

A)  $99 
B)  $130 
C)  $94 
D)  $97 
A)  $99 
B)  $130 
C)  $94 
D)  $97

The boundaries of cost driver activity within which a specific relationship between costs and the cost driver is valid.

Gross margin is

Reese, Inc. produces pliers. Each pair of pliers sells for $8.00. Variable costs per unit total $5.60 of which $2.50 is for direct materials and $2.10 is for direct labour. -If total fixed costs are $174,000, then the break-even point in units is

As the level of activity decreases within the relevant range,

A fixed cost is fixed per unit.

If the contribution-margin ratio is .30, targeted net income is $64,000, and targeted sales volume in dollars is $400,000, then total fixed costs are

If the sales price per unit is $200.00, the unit variable cost is $148.00, and total fixed costs are $164,000, then the break-even volume in dollar sales rounded to the nearest whole dollar is

Thornburg Corporation manufactures lamps. Given the following financial data: Required: a. Compute the contribution margin per unit. b. Compute the break-even point in units. c. Compute the break-even volume in dollars.

If the sales price per unit is $17.00, the unit variable cost is $13.50, and the break-even point is 78,000 units, then the total fixed costs are

A cost that changes in direct proportion to changes in the cost driver is a

Activities that affect costs.

The margin of safety

The sales price minus all the variable expenses per unit.

If total fixed costs are $62,000, contribution margin per unit is $5.00, and targeted after-tax net income is $12,000 with a 40 percent tax rate, then the number of units that must be sold is

The following information is for Lyceum, Ltd.: -If management has a targeted net income of $21,000 (ignore income taxes), then the number of units which must be sold is

Use the following information to answer the next question(s). -The contribution margin ratio is

Sales mix is defined as the relative proportions of products that comprise total sales.

Break-even is the point at which the company achieves its targeted net income.

When changes occur in the sales mix, there is no effect on the cost-volume-profit relationships.

Assume the following cost information for Quayle Corporation: -If fixed costs increased by 10 percent, and management wanted to maintain the original break-even point, then the selling price per unit would have to be increased to

Management Accounting and Management Decisions

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

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Exam 2: Cost Behaviour and Cost-Volume Relationships

The boundaries of cost driver activity within which a specific relationship between costs and the cost driver is valid.

Gross margin is

Reese, Inc. produces pliers. Each pair of pliers sells for $8.00. Variable costs per unit total $5.60 of which $2.50 is for direct materials and $2.10 is for direct labour. -If total fixed costs are $174,000, then the break-even point in units is

As the level of activity decreases within the relevant range,

A fixed cost is fixed per unit.

If the contribution-margin ratio is .30, targeted net income is $64,000, and targeted sales volume in dollars is $400,000, then total fixed costs are

If the sales price per unit is $200.00, the unit variable cost is $148.00, and total fixed costs are $164,000, then the break-even volume in dollar sales rounded to the nearest whole dollar is

Thornburg Corporation manufactures lamps. Given the following financial data: Required: a. Compute the contribution margin per unit. b. Compute the break-even point in units. c. Compute the break-even volume in dollars.

If the sales price per unit is $17.00, the unit variable cost is $13.50, and the break-even point is 78,000 units, then the total fixed costs are

A cost that changes in direct proportion to changes in the cost driver is a

Activities that affect costs.

The margin of safety

The sales price minus all the variable expenses per unit.

If total fixed costs are $62,000, contribution margin per unit is $5.00, and targeted after-tax net income is $12,000 with a 40 percent tax rate, then the number of units that must be sold is

The following information is for Lyceum, Ltd.: -If management has a targeted net income of $21,000 (ignore income taxes), then the number of units which must be sold is

Use the following information to answer the next question(s). -The contribution margin ratio is

Sales mix is defined as the relative proportions of products that comprise total sales.

Break-even is the point at which the company achieves its targeted net income.

When changes occur in the sales mix, there is no effect on the cost-volume-profit relationships.

Assume the following cost information for Quayle Corporation: -If fixed costs increased by 10 percent, and management wanted to maintain the original break-even point, then the selling price per unit would have to be increased to

Management Accounting and Management Decisions

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters