A) decreases as production volume decreases. B) is not affected by changes in the production volume. C) decreases as production volume increases. D) increases as production volume increases. A) decreases as production volume decreases. B) is not affected by changes in the production volume. C) decreases as production volume increases. D) increases as production volume increases.

The following income statements are provided for Li Company's last two years of operation: $\begin{array}{lrr} &\text { Year 1}&\text { Year 2}\\ \text { Number of units produced and sold } & 3,500 & 3,000 \\ \text { Sales revenue } & \$ 101,500& \$ 87,000 \\ \text { Cost of goods sold } & 68,000& 60,000 \\ \text { Gross margin } & 33,500& 27,000 \\ \text { General, selling, and administrative expenses } & 13,000& 12,00 0 \\ \text { Net income } & \$ 20,500 & \$ 15,000 \end{array}$ Assuming that cost behavior did not change over the two-year period,what is the annual amount of the company's fixed manufacturing overhead?

A) $12,000 B) $24,000 C) $26,000 D) None of these A) $12,000 B) $24,000 C) $26,000 D) None of these

The following income statement is provided for Grant,Inc. \[\begin{array} { l r } \text { Sales revenue (1,500@\$30per unit) } & \$ 45,000 \\ \text { Variable costs } ( 1,500 @ \$ 14 \text { per unit) } & 21,000 \\ \text { Fixed costs } & \underline{ 16,000} \\ \text { Net incorne }& \underline{\$ 8,000 }\\ \end{array}\] What is this company's magnitude of operating leverage?

A) 0.33 B) 1.31 C) 2.00 D) 3.00 A) 0.33 B) 1.31 C) 2.00 D) 3.00

Exam 2: Cost Behavior, operating Leverage, and Profitability Analysis

Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume increases to 5,000 units,the company's total costs will be:

(Multiple Choice)

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Question 41

Carson Corporation's sales increase from $500,000 to $600,000 in the current year.What is the percentage change in sales?

(Multiple Choice)

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Question 42

Operating leverage exists when:

(Multiple Choice)

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Question 43

Select the correct statement regarding fixed costs.

(Multiple Choice)

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Question 44

If a company had a pure fixed cost structure,what would be the relationship between a given dollar increase in sales and net income?

(Essay)

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Question 45

How does total variable cost respond when volume increases?

(Essay)

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Question 46

The excess of revenue over variable costs is referred to as:

(Multiple Choice)

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Question 47

When selecting the high and low observations under the high-low method of analyzing mixed costs,the selection should be based on the dependent variable (cost).

(True/False)

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Question 48

Fixed cost per unit:

(Multiple Choice)

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Question 49

Select the correct statement from the following.

(Multiple Choice)

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Question 50

Larry's Lawn Care incurs significant gasoline costs.This cost would be classified as a variable cost if the total gasoline cost:

(Multiple Choice)

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Question 51

What is an activity base,and how does the activity base relate to a variable cost?

(Essay)

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Question 52

The magnitude of operating leverage for Forbes Corporation is 1.8 when sales are $200,000 and net income is $24,000.If sales increase by 5%,what is net income expected to be?

(Multiple Choice)

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Question 53

The following income statements are provided for Li Company's last two years of operation: Year 1 Year 2 Number of units produced and sold 3,500 3,000 Sales revenue \ 101,500 \ 87,000 Cost of goods sold 68,000 60,000 Gross margin 33,500 27,000 General, selling, and administrative expenses 13,000 12,000 Net income \ 20,500 \ 15,000 Assuming that cost behavior did not change over the two-year period,what is the annual amount of the company's fixed manufacturing overhead?

(Multiple Choice)

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Question 54

What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $4,000 a month and variable costs are expected to be $100 per client for each quarter? Expected number of clients for the year are: Jan-March April-June July-Sep Oct-Dec 110 140 150 100

(Multiple Choice)

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Question 55

Select the incorrect statement regarding the use of average unit costs.

(Multiple Choice)

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Question 56

The following income statement is provided for Grant,Inc. Sales revenue (1,500@ \3 0per unit) \ 45,000 Variable costs (1,500@\ 14 per unit) 21,000 Fixed costs Net incorne What is this company's magnitude of operating leverage?

(Multiple Choice)

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Question 57

Select from the following the incorrect statement regarding contribution margin.

(Multiple Choice)

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Question 58

In regression analysis,an r-square value of one indicates that there is a perfect fit between the independent and dependent variables.

(True/False)

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Question 59

If managers of a company do not understand the behavior of its costs,they are likely to make poor decisions about the company's operations.

(True/False)

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Question 60

Showing 41 - 60 of 153

Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume increases to 5,000 units,the company's total costs will be:

Carson Corporation's sales increase from $500,000 to $600,000 in the current year.What is the percentage change in sales?

Operating leverage exists when:

Select the correct statement regarding fixed costs.

If a company had a pure fixed cost structure,what would be the relationship between a given dollar increase in sales and net income?

How does total variable cost respond when volume increases?

The excess of revenue over variable costs is referred to as:

When selecting the high and low observations under the high-low method of analyzing mixed costs,the selection should be based on the dependent variable (cost).

Fixed cost per unit:

Select the correct statement from the following.

Larry's Lawn Care incurs significant gasoline costs.This cost would be classified as a variable cost if the total gasoline cost:

What is an activity base,and how does the activity base relate to a variable cost?

The magnitude of operating leverage for Forbes Corporation is 1.8 when sales are $200,000 and net income is $24,000.If sales increase by 5%,what is net income expected to be?

What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $4,000 a month and variable costs are expected to be $100 per client for each quarter? Expected number of clients for the year are: Jan-March April-June July-Sep Oct-Dec 110 140 150 100

Select the incorrect statement regarding the use of average unit costs.

The following income statement is provided for Grant,Inc. Sales revenue (1,500@ \3 0per unit) \ 45,000 Variable costs (1,500@\ 14 per unit) 21,000 Fixed costs Net incorne What is this company's magnitude of operating leverage?

Select from the following the incorrect statement regarding contribution margin.

In regression analysis,an r-square value of one indicates that there is a perfect fit between the independent and dependent variables.

If managers of a company do not understand the behavior of its costs,they are likely to make poor decisions about the company's operations.

Management Accounting and Corporate Governance

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Accumulation,tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

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