Zeman Company has no beginning and ending inventories,and reports the following data about its only product: $\begin{array}{ll} \text { Direct materials used } & \$ 200,000 \\ \text { Direct labor } & \$ 180,000 \\ \text { Fixed indirect manufacturing } & \$ 100,000 \\ \text { Fixed selling and administrative } & \$ 150,000 \\ \text { Variable indirect manufacturing } & \$ 120,000 \\ \text { Variable selling and administrative } & \$ 60,000 \\ \text { Selling price(per unit) } & \$ 75 \end{array}$ $\begin{array} { l } \text {Units produced and sold }&10,000 \\ \end{array}$ Zeman Company uses the contribution approach to prepare the income statement.What is the contribution margin?

A) $150,000 B) $190,000 C) $250,000 D) $370,000 A) $150,000 B) $190,000 C) $250,000 D) $370,000

Garcia Company has no beginning and ending inventories,and reports the following data about its only product: $\begin{array}{ll} \text { Direct materials used } & \$ 270,000 \\ \text { Direct labor } & \$ 180,000 \\ \text { Fixed indirect manufacturing } & \$ 130,000 \\ \text { Fixed selling and administrative } & \$ 150,000\\ \text { Variable indirect manufacturing }&\$120,000\\ \text { Variable selling and administrative }&\$60,000\\ \text { Selling price(per unit) }&\$99 \end{array}$ $\begin{array} { l } \text {Units produced and sold }&30,000 \\ \end{array}$ Garcia Company uses the absorption approach to prepare the income statement.What is the operating income?

A) $2,060,000 B) $2,120,000 C) $2,240,000 D) $2,970,000 A) $2,060,000 B) $2,120,000 C) $2,240,000 D) $2,970,000

Schaefer Company has no beginning and ending inventories,and reports the following data about its only product: $\begin{array}{ll} \text { Direct materials used } & \$ 200,000 \\ \text { Direct labor } & \$ 80,000 \\ \text { Fixed indirect manufacturing } & \$ 100,000 \\ \text { Fixed selling and administrative } & \$ 150,000 \\ \text { Variable indirect manufacturing } & \$ 20,000 \\ \text { Variable selling and administrative } & \$ 60,000 \\ \text { Selling price(per unit) } & \$ 50 \end{array}$ $\begin{array} { l } \text {Units produced and sold }&10,000 \\ \end{array}$ Schaefer Company uses the contribution approach to prepare the income statement.What is the contribution margin?

A) $100,000 B) $140,000 C) $200,000 D) $220,000 A) $100,000 B) $140,000 C) $200,000 D) $220,000

Latinovich Company has no beginning and ending inventories,and reports the following data about its only product: $\begin{array}{ll} \text { Direct materials used } & \$ 200,000 \\ \text { Direct labor } & \$ 80,000 \\ \text { Fixed indirect manufacturing } & \$ 180,000 \\ \text { Fixed selling and administrative } & \$ 150,000 \\ \text { Variable indirect manufacturing } & \$ 130,000 \\ \text { Variable selling and administrative } & \$ 160,000 \\ \text { Selling price(per unit) } & \$ 150 \end{array}$ $\begin{array} { l } \text {Units produced and sold }&10,000 \\ \end{array}$ Latinovich Company uses the contribution approach to prepare the income statement.What is the contribution margin?

A) $600,000 B) $910,000 C) $930,000 D) $1,090,000 A) $600,000 B) $910,000 C) $930,000 D) $1,090,000

Exam 5: Relevant Information for Decision Making With a Focus on Pricing Decisions

Missouri Company has a current production capacity level of 200,000 units per month.At this level of production,variable costs are $0.60 per unit and fixed costs are $0.50 per unit.Current monthly sales are 173,000 units.Gates Company has contacted Missouri Company about purchasing 20,000 units at $1.00 each.Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.If the order is accepted,what is Missouri Company's change in profits?

(Multiple Choice)

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Question 61

Frequently,companies do not use a contribution approach to pricing because ________.

(Multiple Choice)

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Question 62

When managers make decisions,the accountant is seen as the technical expert on financial analysis.

(True/False)

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Question 63

Wisconsin Company has a current production capacity level of 200,000 units per month.At this level of production,variable costs are $1.00 per unit and fixed costs are $0.50 per unit.Current monthly sales are 164,500 units.Gates Company has contacted Wisconsin Company about purchasing 20,000 units at $2.00 each.Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.Variable costs would increase $0.10 per unit with the special order.If the order is accepted,what is Wisconsin Company's increase in operating income?

(Multiple Choice)

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Question 64

With increased global competition in many industries,companies are increasingly limited in influencing product prices.

(True/False)

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Question 65

Under absorption costing,fixed manufacturing costs are used to calculate ________ on the income statement.

(Multiple Choice)

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Question 66

In special order situations,unit costs are useful for predicting total .In special order situations,unit costs are not useful for predicting total .

(Multiple Choice)

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Question 67

Value engineering is used primarily during the distribution stage of the value chain.

(True/False)

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Question 68

Zeman Company has no beginning and ending inventories,and reports the following data about its only product: Direct materials used \ 200,000 Direct labor \ 180,000 Fixed indirect manufacturing \ 100,000 Fixed selling and administrative \ 150,000 Variable indirect manufacturing \ 120,000 Variable selling and administrative \ 60,000 Selling price(per unit) \ 75 Units produced and sold 10,000 Zeman Company uses the contribution approach to prepare the income statement.What is the contribution margin?

(Multiple Choice)

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Question 69

If a small price increase causes large volume declines,demand is highly inelastic.

(True/False)

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Question 70

Garcia Company has no beginning and ending inventories,and reports the following data about its only product: Direct materials used \ 270,000 Direct labor \ 180,000 Fixed indirect manufacturing \ 130,000 Fixed selling and administrative \ 150,000 Variable indirect manufacturing \1 20,000 Variable selling and administrative \6 0,000 Selling price(per unit) \9 9 Units produced and sold 30,000 Garcia Company uses the absorption approach to prepare the income statement.What is the operating income?

(Multiple Choice)

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Question 71

In perfect competition,the profit-maximizing volume is the quantity at which the difference between the sales price and marginal cost is at its greatest.

(True/False)

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Question 72

In a special order decision,which of the following costs are usually irrelevant to the decision?

(Multiple Choice)

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Question 73

Using absorption costing,the primary classifications of costs on the income statement are by ________.

(Multiple Choice)

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Question 74

Schaefer Company has no beginning and ending inventories,and reports the following data about its only product: Direct materials used \ 200,000 Direct labor \ 80,000 Fixed indirect manufacturing \ 100,000 Fixed selling and administrative \ 150,000 Variable indirect manufacturing \ 20,000 Variable selling and administrative \ 60,000 Selling price(per unit) \ 50 Units produced and sold 10,000 Schaefer Company uses the contribution approach to prepare the income statement.What is the contribution margin?

(Multiple Choice)

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Question 75

In managerial accounting,variable cost is a reasonable approximation of marginal cost in many situations.

(True/False)

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Question 76

How do managers obtain the target cost for a new product under consideration? Assume the market price per unit is known and it cannot be influenced by management.

(Multiple Choice)

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Question 77

________ is the additional cost resulting from producing and selling one additional unit.

(Multiple Choice)

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Question 78

Under absorption costing,all ________ costs are product or inventoriable costs.

(Multiple Choice)

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Question 79

Latinovich Company has no beginning and ending inventories,and reports the following data about its only product: Direct materials used \ 200,000 Direct labor \ 80,000 Fixed indirect manufacturing \ 180,000 Fixed selling and administrative \ 150,000 Variable indirect manufacturing \ 130,000 Variable selling and administrative \ 160,000 Selling price(per unit) \ 150 Units produced and sold 10,000 Latinovich Company uses the contribution approach to prepare the income statement.What is the contribution margin?

(Multiple Choice)

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Question 80

Showing 61 - 80 of 136

Frequently,companies do not use a contribution approach to pricing because ________.

When managers make decisions,the accountant is seen as the technical expert on financial analysis.

With increased global competition in many industries,companies are increasingly limited in influencing product prices.

Under absorption costing,fixed manufacturing costs are used to calculate ________ on the income statement.

In special order situations,unit costs are useful for predicting total .In special order situations,unit costs are not useful for predicting total .

Value engineering is used primarily during the distribution stage of the value chain.

If a small price increase causes large volume declines,demand is highly inelastic.

In perfect competition,the profit-maximizing volume is the quantity at which the difference between the sales price and marginal cost is at its greatest.

In a special order decision,which of the following costs are usually irrelevant to the decision?

Using absorption costing,the primary classifications of costs on the income statement are by ________.

In managerial accounting,variable cost is a reasonable approximation of marginal cost in many situations.

How do managers obtain the target cost for a new product under consideration? Assume the market price per unit is known and it cannot be influenced by management.

________ is the additional cost resulting from producing and selling one additional unit.

Under absorption costing,all ________ costs are product or inventoriable costs.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 5: Relevant Information for Decision Making With a Focus on Pricing Decisions

Frequently,companies do not use a contribution approach to pricing because ________.

When managers make decisions,the accountant is seen as the technical expert on financial analysis.

With increased global competition in many industries,companies are increasingly limited in influencing product prices.

Under absorption costing,fixed manufacturing costs are used to calculate ________ on the income statement.

In special order situations,unit costs are useful for predicting total ________.In special order situations,unit costs are not useful for predicting total ________.

Value engineering is used primarily during the distribution stage of the value chain.

If a small price increase causes large volume declines,demand is highly inelastic.

In perfect competition,the profit-maximizing volume is the quantity at which the difference between the sales price and marginal cost is at its greatest.

In a special order decision,which of the following costs are usually irrelevant to the decision?

Using absorption costing,the primary classifications of costs on the income statement are by ________.

In managerial accounting,variable cost is a reasonable approximation of marginal cost in many situations.

How do managers obtain the target cost for a new product under consideration? Assume the market price per unit is known and it cannot be influenced by management.

________ is the additional cost resulting from producing and selling one additional unit.

Under absorption costing,all ________ costs are product or inventoriable costs.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

In special order situations,unit costs are useful for predicting total .In special order situations,unit costs are not useful for predicting total .