Question 1

In contribution margin analysis, the unit price or unit cost factor is computed as:

Accepted Answer

A) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold 
B) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold 
C) the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost 
D) the difference between the actual quantity sold and the planned quantity sold, multiplied by the actual unit sales price or unit cost 
A) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold 
B) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold 
C) the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost 
D) the difference between the actual quantity sold and the planned quantity sold, multiplied by the actual unit sales price or unit cost

Question 2

A business operated at 100% of capacity during its first month, with the following results:   What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Accepted Answer

A) $30,000 
B) $38,000 
C) $56,000 
D) $44,000 
A) $30,000 
B) $38,000 
C) $56,000 
D) $44,000

Question 3

The relative distribution of sales among various products sold is referred to as the:

Accepted Answer

A) by-product mix 
B) joint product mix 
C) profit mix 
D) sales mix 
A) by-product mix 
B) joint product mix 
C) profit mix 
D) sales mix

Question 4

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Accepted Answer

A) True 
 B)False

Question 5

Match
-May be used in a manufacturing company.

Accepted Answer

A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing 
A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing

Question 6

A business operated at 100% of capacity during its first month and incurred the following costs:   If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

Accepted Answer

A) $64,000 
B) $56,000 
C) $66,400 
D) $78,400 
A) $64,000 
B) $56,000 
C) $66,400 
D) $78,400

Question 7

For short-run production planning, information in the absorption costing format is more useful to management than is information in the variable costing format.

Accepted Answer

A) True 
 B)False

Question 8

Fixed costs are $10 per unit and variable costs are $25 per unit.Production was 13,000 units, while sales were 12,000 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 $10 per unit and...

Question 9

Match
-Generally provides the most useful report for setting long-term prices.

Accepted Answer

A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing 
A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing

Question 10

Match
-Generally provides the most useful report for controlling costs.

Accepted Answer

A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing 
A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing

Question 11

Philadelphia Company has the following information for March:
   Determine the March a manufacturing margin, b contribution margin, and c income from operations for Philadelphia Company.

Accepted Answer

a $210,000 $450,000

Question 12

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:

Accepted Answer

A) fixed manufacturing costs 
B) variable cost of goods sold 
C) fixed selling and administrative expenses 
D) variable selling and administrative expenses 
A) fixed manufacturing costs 
B) variable cost of goods sold 
C) fixed selling and administrative expenses 
D) variable selling and administrative expenses

Question 13

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

Accepted Answer

A) by using the absorption costing method, income could appear to be higher by producing more inventory. 
B) by using the absorption costing method, income could appear to be lower by producing more inventory. 
C) by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and sales remain the same. 
D) by using the variable costing method, all fixed and variable costs are included in the unit cost of the product manufactured. 
A) by using the absorption costing method, income could appear to be higher by producing more inventory. 
B) by using the absorption costing method, income could appear to be lower by producing more inventory. 
C) by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and sales remain the same. 
D) by using the variable costing method, all fixed and variable costs are included in the unit cost of the product manufactured.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Contribution margin reporting can be beneficial for analyzing which of the following?

Accepted Answer

A) sales personnel 
B) products 
C) sales territory 
D) all of the above 
A) sales personnel 
B) products 
C) sales territory 
D) all of the above

Question 16

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

Accepted Answer

A) True 
 B)False

Question 17

Management may use both absorption and variable costing methods for analyzing a particular product.

Accepted Answer

A) True 
 B)False

Question 18

What is the amount of the gross profit that would be reported on the absorption costing income statement?

Accepted Answer

A) $21,000 
B) $18,900 
C) $27,900 
D) $18,000 
A) $21,000 
B) $18,900 
C) $27,900 
D) $18,000

Question 19

S&P Enterprises sold 10,000 units of inventory during a given period.The level of inventory of the manufactured product remained unchanged.The manufacturing costs were as follows:   Which of the following statements is true?

Accepted Answer

A) Net income will be the same under both variable and absorption costing. 
B) Net income under variable costing will be $45,000 less than net income under absorption costing 
C) Net income under absorption costing will be $40,000 more than under variable costing. 
D) The difference in net income cannot be determined. 
A) Net income will be the same under both variable and absorption costing. 
B) Net income under variable costing will be $45,000 less than net income under absorption costing 
C) Net income under absorption costing will be $40,000 more than under variable costing. 
D) The difference in net income cannot be determined.

Question 20

Companies prepare contribution margin reports by market segments and product segments because products contribute to profitability in various ways.

Accepted Answer

A) True 
 B)False

In contribution margin analysis, the unit price or unit cost factor is computed as:

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

The relative distribution of sales among various products sold is referred to as the:

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Match -May be used in a manufacturing company.

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

For short-run production planning, information in the absorption costing format is more useful to management than is information in the variable costing format.

Match -Generally provides the most useful report for setting long-term prices.

Match -Generally provides the most useful report for controlling costs.

Philadelphia Company has the following information for March: Determine the March a manufacturing margin, b contribution margin, and c income from operations for Philadelphia Company.

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

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

Contribution margin reporting can be beneficial for analyzing which of the following?

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

Management may use both absorption and variable costing methods for analyzing a particular product.

What is the amount of the gross profit that would be reported on the absorption costing income statement?

S&P Enterprises sold 10,000 units of inventory during a given period.The level of inventory of the manufactured product remained unchanged.The manufacturing costs were as follows: Which of the following statements is true?

Companies prepare contribution margin reports by market segments and product segments because products contribute to profitability in various ways.

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 contribution margin analysis, the unit price or unit cost factor is computed as:

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

The relative distribution of sales among various products sold is referred to as the:

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Match -May be used in a manufacturing company.

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

For short-run production planning, information in the absorption costing format is more useful to management than is information in the variable costing format.

Match -Generally provides the most useful report for setting long-term prices.

Match -Generally provides the most useful report for controlling costs.

Philadelphia Company has the following information for March: Determine the March a manufacturing margin, b contribution margin, and c income from operations for Philadelphia Company.

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

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

Contribution margin reporting can be beneficial for analyzing which of the following?

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

Management may use both absorption and variable costing methods for analyzing a particular product.

What is the amount of the gross profit that would be reported on the absorption costing income statement?

S&P Enterprises sold 10,000 units of inventory during a given period.The level of inventory of the manufactured product remained unchanged.The manufacturing costs were as follows: Which of the following statements is true?

Companies prepare contribution margin reports by market segments and product segments because products contribute to profitability in various ways.

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