Question 1

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

Accepted Answer

A) True 
 B)False  False

Question 2

Edna's Chocolates had planned to sell chocolate covered strawberries for $3.00 each.Due to various factors, the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is 1 the quantity factor and 2 the price factor for sales?

Accepted Answer

A) 1 $3,000, 2 $1,250 
B) 1 $3,000, 2 $3,000 
C) 1 $1,250, 2 $3,000 
D) 1 $4,000 2 $3,000 
A) 1 $3,000, 2 $1,250 
B) 1 $3,000, 2 $3,000 
C) 1 $1,250, 2 $3,000 
D) 1 $4,000 2 $3,000 A

Question 3

If sales totaled $800,000 for the year 80,000 units at $10.00 each and the planned sales totaled $799,500 78,000 units at $10.25 each, the effect of the quantity factor on the change in sales is:

Accepted Answer

A) $20,500 increase 
B) $20,000 decrease 
C) $20,500 decrease 
D) $20,000 increase 
A) $20,500 increase 
B) $20,000 decrease 
C) $20,500 decrease 
D) $20,000 increase A

Question 4

The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured:

Accepted Answer

A) exceed units sold 
B) equal units sold 
C) are less than units sold 
D) are equal to or greater than units sold 
A) exceed units sold 
B) equal units sold 
C) are less than units sold 
D) are equal to or greater than units sold

Question 5

Contribution margin reporting and analysis is appropriate only for manufacturing firms, not for service firms.

Accepted Answer

A) True 
 B)False

Question 6

On the variable costing income statement, variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

Accepted Answer

A) True 
 B)False

Question 7

In variable costing, fixed costs do not become part of the cost of goods manufactured, but are considered an expense of the period.

Accepted Answer

A) True 
 B)False

Question 8

For a period during which the quantity of inventory at the end equals the inventory at the beginning, income from operations reported under variable costing will be smaller than income from operations reported under absorption costing.

Accepted Answer

A) True 
 B)False

Question 9

On January 1 of the current year, Townsend Co.commenced operations.It operated its plant at 100% of capacity during January.The following data summarized the results for January:
   a Prepare an income statement using absorption costing.
b Prepare an income statement using variable costing.

Accepted Answer

The answer of On January 1 of the current year,...

Question 10

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Accepted Answer

A) direct labor cost 
B) direct materials cost 
C) variable and fixed factory overhead cost 
D) variable and fixed selling and administrative expenses 
A) direct labor cost 
B) direct materials cost 
C) variable and fixed factory overhead cost 
D) variable and fixed selling and administrative expenses

Question 11

If variable cost of goods sold totaled $80,000 for the year 16,000 units at $5.00 each and the planned variable cost of goods sold totaled $86,250 15,000 units at $5.75 each, the effect of the quantity factor on the change in contribution margin is:

Accepted Answer

A) $5,000 decrease 
B) $5,000 increase 
C) $5,750 increase 
D) $5,750 decrease 
A) $5,000 decrease 
B) $5,000 increase 
C) $5,750 increase 
D) $5,750 decrease

Question 12

A business operated at 100% of capacity during its first month and incurred the following costs:   If 75 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

Accepted Answer

A) $5,625 
B) $5,250 
C) $5,760 
D) $6,210 
A) $5,625 
B) $5,250 
C) $5,760 
D) $6,210

Question 13

If variable selling and administrative expenses totaled $120,000 for the year 80,000 units at $1.50 each and the planned variable selling and administrative expenses totaled $136,500 78,000 units at $1.75 each, the effect of the unit cost factor on the change in contribution margin is:

Accepted Answer

A) $19,500 decrease 
B) $19,500 increase 
C) $20,000 decrease 
D) $20,000 increase 
A) $19,500 decrease 
B) $19,500 increase 
C) $20,000 decrease 
D) $20,000 increase

Question 14

Based upon the following data taken from the records of Bruce Inc., prepare a contribution margin analysis report for the year ended December 31.
   
a.Absorption costing only
b.Variable costing only
c.Both absorption and variable costing

Accepted Answer

The answer of Based upon the following data taken from...

Question 15

For a period during which the quantity of product manufactured exceeded the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

Accepted Answer

A) True 
 B)False

Question 16

Presented below are the major categories or captions that would appear on an income statement prepared in the variable costing format:
Contribution margin Fixed costs
Income from operations Manufacturing margin Sales
Variable cost of goods sold
Variable selling and administrative expenses
a Arrange the above captions in the proper order in accordance with the variable costing concept.
b Which of the captions represents 1 the difference between sales and the total of all the variable costs and expenses and 2 the remaining amount of revenue available for fixed manufacturing costs, fixed expenses, and net income?

Accepted Answer

The answer of Presented below are the major categories or...

Question 17

A business operated at 100% of capacity during its first month and incurred the following costs:   If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Accepted Answer

A) $104,000 
B) $106,000 
C) $140,000 
D) not reported 
A) $104,000 
B) $106,000 
C) $140,000 
D) not reported

Question 18

Fixed costs are $50 per unit and variable costs are $125 per unit.Production was 130,000 units, while sales were 125,000 units.Determine a whether variable costing income from operations is less than or greater than absorption costing income from operations, and b the difference in variable costing and absorption costing income from operations.

Accepted Answer

The answer of Fixed costs are $50 per unit and...

Question 19

The contribution margin ratio is computed as contribution margin divided by sales.

Accepted Answer

A) True 
 B)False

Question 20

Management will use both variable and absorption costing in all of the following activities except:

Accepted Answer

A) controlling costs 
B) product pricing 
C) production planning 
D) controlling inventory levels 
A) controlling costs 
B) product pricing 
C) production planning 
D) controlling inventory levels

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

Edna's Chocolates had planned to sell chocolate covered strawberries for $3.00 each.Due to various factors, the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is 1 the quantity factor and 2 the price factor for sales?

If sales totaled $800,000 for the year 80,000 units at $10.00 each and the planned sales totaled $799,500 78,000 units at $10.25 each, the effect of the quantity factor on the change in sales is:

The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured:

Contribution margin reporting and analysis is appropriate only for manufacturing firms, not for service firms.

On the variable costing income statement, variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

In variable costing, fixed costs do not become part of the cost of goods manufactured, but are considered an expense of the period.

For a period during which the quantity of inventory at the end equals the inventory at the beginning, income from operations reported under variable costing will be smaller than income from operations reported under absorption costing.

On January 1 of the current year, Townsend Co.commenced operations.It operated its plant at 100% of capacity during January.The following data summarized the results for January: a Prepare an income statement using absorption costing. b Prepare an income statement using variable costing.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

If variable cost of goods sold totaled $80,000 for the year 16,000 units at $5.00 each and the planned variable cost of goods sold totaled $86,250 15,000 units at $5.75 each, the effect of the quantity factor on the change in contribution margin is:

A business operated at 100% of capacity during its first month and incurred the following costs: If 75 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

If variable selling and administrative expenses totaled $120,000 for the year 80,000 units at $1.50 each and the planned variable selling and administrative expenses totaled $136,500 78,000 units at $1.75 each, the effect of the unit cost factor on the change in contribution margin is:

Based upon the following data taken from the records of Bruce Inc., prepare a contribution margin analysis report for the year ended December 31. a.Absorption costing only b.Variable costing only c.Both absorption and variable costing

For a period during which the quantity of product manufactured exceeded the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

The contribution margin ratio is computed as contribution margin divided by sales.

Management will use both variable and absorption costing in all of the following activities except:

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit 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 5: Variable Costing for Management Analysis

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

Edna's Chocolates had planned to sell chocolate covered strawberries for $3.00 each.Due to various factors, the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is 1 the quantity factor and 2 the price factor for sales?

If sales totaled $800,000 for the year 80,000 units at $10.00 each and the planned sales totaled $799,500 78,000 units at $10.25 each, the effect of the quantity factor on the change in sales is:

The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured:

Contribution margin reporting and analysis is appropriate only for manufacturing firms, not for service firms.

On the variable costing income statement, variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

In variable costing, fixed costs do not become part of the cost of goods manufactured, but are considered an expense of the period.

For a period during which the quantity of inventory at the end equals the inventory at the beginning, income from operations reported under variable costing will be smaller than income from operations reported under absorption costing.

On January 1 of the current year, Townsend Co.commenced operations.It operated its plant at 100% of capacity during January.The following data summarized the results for January: a Prepare an income statement using absorption costing. b Prepare an income statement using variable costing.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

If variable cost of goods sold totaled $80,000 for the year 16,000 units at $5.00 each and the planned variable cost of goods sold totaled $86,250 15,000 units at $5.75 each, the effect of the quantity factor on the change in contribution margin is:

A business operated at 100% of capacity during its first month and incurred the following costs: If 75 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

If variable selling and administrative expenses totaled $120,000 for the year 80,000 units at $1.50 each and the planned variable selling and administrative expenses totaled $136,500 78,000 units at $1.75 each, the effect of the unit cost factor on the change in contribution margin is:

Based upon the following data taken from the records of Bruce Inc., prepare a contribution margin analysis report for the year ended December 31. a.Absorption costing only b.Variable costing only c.Both absorption and variable costing

For a period during which the quantity of product manufactured exceeded the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

The contribution margin ratio is computed as contribution margin divided by sales.

Management will use both variable and absorption costing in all of the following activities except:

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit 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