Question 1

The contribution margin and the manufacturing margin are usually equal.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would not be an appropriate activity base for cost analysis in a service firm?

Accepted Answer

A)  lawns mowed 
B)  inventory produced 
C)  customers served 
D)  haircuts given 
A)  lawns mowed 
B)  inventory produced 
C)  customers served 
D)  haircuts given

Question 3

A business operated at 100% of capacity during its first month and incurred the following costs: ​
  If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month,what would be the amount of income from operations reported on the absorption costing income statement?

Accepted Answer

A)  $50,400 
B)  $70,000 
C)  $52,000 
D)  $68,400 
A)  $50,400 
B)  $70,000 
C)  $52,000 
D)  $68,400

Question 4

In contribution margin analysis,the effect of a difference in the number of units sold,assuming no change in unit sales price or cost,is termed the quantity factor.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

The answer of Philadelphia Company has the following information for...

Question 7

Based upon the following data taken from the records of Bruce Inc.,prepare a contribution margin analysis report for the year ended December 31.

Accepted Answer

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

For a period during which the quantity of inventory at the end was larger than that 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 10

In the variable costing income statement,deduction of variable selling and administrative expenses from manufacturing margin yields:

Accepted Answer

A)  differential margin 
B)  contribution margin 
C)  gross profit 
D)  marginal expenses 
A)  differential margin 
B)  contribution margin 
C)  gross profit 
D)  marginal expenses

Question 11

The absorption costing income statement does not distinguish between variable and fixed costs.

Accepted Answer

A) True 
 B)False

Question 12

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each),the effect of the unit cost factor on the change in contribution margin is:

Accepted Answer

A)  $6,400 decrease 
B)  $6,400 increase 
C)  $7,200 increase 
D)  $7,200 decrease 
A)  $6,400 decrease 
B)  $6,400 increase 
C)  $7,200 increase 
D)  $7,200 decrease

Question 13

The level of inventory of a manufactured product has increased by 4,000 units during a period.The following data are also available: ​
  What would be the effect on income from operations if absorption costing is used rather than variable costing?

Accepted Answer

A)  $44,000 decrease 
B)  $44,000 increase 
C)  $64,000 increase 
D)  $64,000 decrease 
A)  $44,000 decrease 
B)  $44,000 increase 
C)  $64,000 increase 
D)  $64,000 decrease

Question 14

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 15

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

Question 16

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 17

On the variable costing income statement,variable costs are deducted from contribution margin to yield manufacturing margin.

Accepted Answer

A) True 
 B)False

Question 18

The level of inventory of a manufactured product has increased by 5,000 units during a period.The following data are also available: ​
  What would be the effect on income from operations if variable costing is used rather than absorption costing?

Accepted Answer

A)  $50,000 decrease 
B)  $50,000 increase 
C)  $65,000 increase 
D)  $65,000 decrease 
A)  $50,000 decrease 
B)  $50,000 increase 
C)  $65,000 increase 
D)  $65,000 decrease

Question 19

The level of inventory of a manufactured product has increased by 8,000 units during a period.The following data are also available: ​
  What would be the effect on income from operations if variable costing is used rather than absorption costing?

Accepted Answer

A)  $80,000 decrease 
B)  $80,000 increase 
C)  $104,000 decrease 
D)  $104,000 increase 
A)  $80,000 decrease 
B)  $80,000 increase 
C)  $104,000 decrease 
D)  $104,000 increase

Question 20

Which of the following would be included in the cost of a product manufactured according to variable costing?

Accepted Answer

A)  sales commissions 
B)  office supply costs 
C)  interest expense 
D)  direct materials 
A)  sales commissions 
B)  office supply costs 
C)  interest expense 
D)  direct materials

Exam 20: Variable Costing for Management Analysis

The contribution margin and the manufacturing margin are usually equal.

Which of the following would not be an appropriate activity base for cost analysis in a service firm?

A business operated at 100% of capacity during its first month and incurred the following costs: ​ If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month,what would be the amount of income from operations reported on the absorption costing income statement?

In contribution margin analysis,the effect of a difference in the number of units sold,assuming no change in unit sales price or cost,is termed the quantity factor.

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.

Based upon the following data taken from the records of Bruce Inc.,prepare a contribution margin analysis report for the year ended December 31.

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

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

In the variable costing income statement,deduction of variable selling and administrative expenses from manufacturing margin yields:

The absorption costing income statement does not distinguish between variable and fixed costs.

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each),the effect of the unit cost factor on the change in contribution margin is:

The level of inventory of a manufactured product has increased by 4,000 units during a period.The following data are also available: ​ What would be the effect on income from operations if absorption costing is used rather than variable costing?

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

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

On the variable costing income statement,variable costs are deducted from contribution margin to yield manufacturing margin.

The level of inventory of a manufactured product has increased by 5,000 units during a period.The following data are also available: ​ What would be the effect on income from operations if variable costing is used rather than absorption costing?

The level of inventory of a manufactured product has increased by 8,000 units during a period.The following data are also available: ​ What would be the effect on income from operations if variable costing is used rather than absorption costing?

Which of the following would be included in the cost of a product manufactured according to variable costing?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month,what would be the amount of income from operations reported on the absorption costing income statement?

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.

The level of inventory of a manufactured product has increased by 4,000 units during a period.The following data are also available: What would be the effect on income from operations if absorption costing is used rather than variable costing?

The level of inventory of a manufactured product has increased by 5,000 units during a period.The following data are also available: What would be the effect on income from operations if variable costing is used rather than absorption costing?

The level of inventory of a manufactured product has increased by 8,000 units during a period.The following data are also available: What would be the effect on income from operations if variable costing is used rather than absorption costing?