Question 1

The point in operations at which revenues and expenses are exactly equal is called the break-even point.

Accepted Answer

A) True 
 B)False

Question 2

If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.

Accepted Answer

A) True 
 B)False

Question 3

Roller Paint Co.reported the following data for the month of September.There were no beginning inventories and all units were completed no work in process.
   In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit.
a Prepare a variable costing income statement.
b Prepare an absorption costing income statement.
c Briefly explain why there is a difference in income from operations between the two methods. 
a.Relevant range
b.Break-even point
c.Contribution margin
d.Fixed costs
e.Variable costs

Accepted Answer

The answer of Roller Paint Co.reported the following data for...

Question 4

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

Accepted Answer

A) True 
 B)False

Question 5

If fixed costs are $400,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

Accepted Answer

A) 25,000 units 
B) 10,000 units 
C) 400,000 units 
D) 20,000 units 
A) 25,000 units 
B) 10,000 units 
C) 400,000 units 
D) 20,000 units

Question 6

In cost-volume-profit analysis, all costs are classified into the following two categories:

Accepted Answer

A) mixed costs and variable costs 
B) sunk costs and fixed costs 
C) discretionary costs and sunk costs 
D) variable costs and fixed costs 
A) mixed costs and variable costs 
B) sunk costs and fixed costs 
C) discretionary costs and sunk costs 
D) variable costs and fixed costs

Question 7

A cost that has characteristics of both a variable cost and a fixed cost is called a

Accepted Answer

A) variable/fixed cost 
B) mixed cost 
C) discretionary cost 
D) sunk cost 
A) variable/fixed cost 
B) mixed cost 
C) discretionary cost 
D) sunk cost

Question 8

The three most common cost behavior classifications are

Accepted Answer

A) variable costs, product costs, and sunk costs 
B) fixed costs, variable costs, and mixed costs 
C) variable costs, period costs, and differential costs 
D) variable costs, sunk costs, and opportunity costs 
A) variable costs, product costs, and sunk costs 
B) fixed costs, variable costs, and mixed costs 
C) variable costs, period costs, and differential costs 
D) variable costs, sunk costs, and opportunity costs

Question 9

What was Carter Co.'s sales mix last year?

Accepted Answer

A) 20% Arks, 80% Bins 
B) 12% Arks, 28% Bins 
C) 70% Arks, 30% Bins 
D) 40% Arks, 20% Bins 
A) 20% Arks, 80% Bins 
B) 12% Arks, 28% Bins 
C) 70% Arks, 30% Bins 
D) 40% Arks, 20% Bins

Question 10

What was Rusty Co.'s unit variable cost of E?

Accepted Answer

A) $52.50 
B) $70.00 
C) $120.00 
D) $50.00 
A) $52.50 
B) $70.00 
C) $120.00 
D) $50.00

Question 11

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

Accepted Answer

A) True 
 B)False

Question 12

The manufacturing cost of Mocha Industries for three months of the year are provided below:
   Using the high-low method, determine the a variable cost per unit, and b the total fixed costs.

Accepted Answer

a $100,900 - $63,100

Question 13

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

Accepted Answer

A) 9,231 units 
B) 12,000 units 
C) 10,769 units 
D) 5,833 units 
A) 9,231 units 
B) 12,000 units 
C) 10,769 units 
D) 5,833 units

Question 14

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

Accepted Answer

A) the maximum possible operating loss 
B) the maximum possible operating income 
C) the total fixed costs 
D) the break-even point 
A) the maximum possible operating loss 
B) the maximum possible operating income 
C) the total fixed costs 
D) the break-even point

Question 15

Unit variable cost does not change as the number of units of activity changes.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Accepted Answer

A) direct labor 
B) salary of a factory supervisor 
C) units-of-production depreciation on factory equipment 
D) direct materials 
A) direct labor 
B) salary of a factory supervisor 
C) units-of-production depreciation on factory equipment 
D) direct materials

Question 17

Which of the following describes the behavior of the fixed cost per unit?

Accepted Answer

A) decreases with increasing production 
B) decreases with decreasing production 
C) remains constant with changes in production 
D) increases with increasing production 
A) decreases with increasing production 
B) decreases with decreasing production 
C) remains constant with changes in production 
D) increases with increasing production

Question 18

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Accepted Answer

A) True 
 B)False

Question 19

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

Accepted Answer

A) True 
 B)False

Question 20

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

Accepted Answer

A) True 
 B)False

The point in operations at which revenues and expenses are exactly equal is called the break-even point.

If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

If fixed costs are $400,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

In cost-volume-profit analysis, all costs are classified into the following two categories:

A cost that has characteristics of both a variable cost and a fixed cost is called a

The three most common cost behavior classifications are

What was Carter Co.'s sales mix last year?

What was Rusty Co.'s unit variable cost of E?

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

The manufacturing cost of Mocha Industries for three months of the year are provided below: Using the high-low method, determine the a variable cost per unit, and b the total fixed costs.

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

Unit variable cost does not change as the number of units of activity changes.

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Which of the following describes the behavior of the fixed cost per unit?

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

The point in operations at which revenues and expenses are exactly equal is called the break-even point.

If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

If fixed costs are $400,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

In cost-volume-profit analysis, all costs are classified into the following two categories:

A cost that has characteristics of both a variable cost and a fixed cost is called a

The three most common cost behavior classifications are

What was Carter Co.'s sales mix last year?

What was Rusty Co.'s unit variable cost of E?

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

The manufacturing cost of Mocha Industries for three months of the year are provided below: Using the high-low method, determine the a variable cost per unit, and b the total fixed costs.

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

Unit variable cost does not change as the number of units of activity changes.

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Which of the following describes the behavior of the fixed cost per unit?

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters