Question 1

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

Accepted Answer

A) True 
 B)False

Question 2

The dollars available from each unit of sales to cover fixed cost and profit is the contribution margin per unit.

Accepted Answer

A) True 
 B)False

Question 3

DeGiaimo Co.has an operating leverage of 5.If next year's sales are expected to increase by 10%,then the company's operating income will increase by 50%.

Accepted Answer

A) True 
 B)False

Question 4

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

Accepted Answer

A) decrease. 
B) increase. 
C) remain the same. 
D) increase or decrease,depending upon the percentage increase in wage rates. 
A) decrease. 
B) increase. 
C) remain the same. 
D) increase or decrease,depending upon the percentage increase in wage rates.

Question 5

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95.

Accepted Answer

The answer of For the current year ending April 30,Philip...

Question 6

The fixed cost per unit varies with changes in the level of activity.

Accepted Answer

A) True 
 B)False

Question 7

The variable cost per unit remains constant with changes in the level of activity.

Accepted Answer

A) True 
 B)False

Question 8

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

Accepted Answer

A) True 
 B)False

Question 9

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Accepted Answer

A) True 
 B)False

Question 10

Variable costs as a percentage of sales for Leamon Inc.are 75%,current sales are $600,000,and fixed costs are $110,000.How much will operating income change if sales increase
By $50,000?

Accepted Answer

A) $37,500 increase 
B) $12,500 decrease 
C) $37,500 decrease 
D) $12,500 increase 
A) $37,500 increase 
B) $12,500 decrease 
C) $37,500 decrease 
D) $12,500 increase

Question 11

If the contribution margin ratio for Harrison Company is 38%,sales were $425,000 and fixed costs were $100,000,what was the income from operations?

Accepted Answer

A) $163,500 
B) $161,500 
C) $54,730 
D) $61,500 
A) $163,500 
B) $161,500 
C) $54,730 
D) $61,500

Question 12

If fixed costs are $850,000 and the unit contribution margin is $50,profit is zero when 15,000 units are sold.

Accepted Answer

A) True 
 B)False

Question 13

If direct materials cost per unit increases,the break-even point will increase.

Accepted Answer

A) True 
 B)False

Question 14

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Accepted Answer

A) True 
 B)False

Question 15

Costs that vary in total in direct proportion to changes in an activity level are called

Accepted Answer

A) fixed costs. 
B) sunk costs. 
C) variable costs. 
D) differential costs. 
A) fixed costs. 
B) sunk costs. 
C) variable costs. 
D) differential costs.

Question 16

Assuming that last year's fixed costs totaled $910,000,what was Kennedy Co.'s break-even point in units?

Accepted Answer

A) 9,100 units 
B) 13,000 units 
C) 13,227 units 
D) 13,542 units 
A) 9,100 units 
B) 13,000 units 
C) 13,227 units 
D) 13,542 units

Question 17

If fixed costs are $250,000,the unit selling price is $105,and the unit variable costs are $65,what is the break-even sales (in units)?

Accepted Answer

A) 6,250 units 
B) 2,381 units 
C) 10,000 units 
D) 3,846 units 
A) 6,250 units 
B) 2,381 units 
C) 10,000 units 
D) 3,846 units

Question 18

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Accepted Answer

A) Direct labor 
B) Salary of a factory supervisor 
C) Units of production depreciation on factory equipment 
D) Direct materials 
A) Direct labor 
B) Salary of a factory supervisor 
C) Units of production depreciation on factory equipment 
D) Direct materials

Question 20

Which of the following activity bases would be the most appropriate for food costs of
A hospital?

Accepted Answer

A) Number of cooks scheduled to work 
B) Number of x-rays taken 
C) Number of patients who stay in the hospital 
D) Number of scheduled surgeries 
A) Number of cooks scheduled to work 
B) Number of x-rays taken 
C) Number of patients who stay in the hospital 
D) Number of scheduled surgeries

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

The dollars available from each unit of sales to cover fixed cost and profit is the contribution margin per unit.

DeGiaimo Co.has an operating leverage of 5.If next year's sales are expected to increase by 10%,then the company's operating income will increase by 50%.

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95.

The fixed cost per unit varies with changes in the level of activity.

The variable cost per unit remains constant with changes in the level of activity.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Variable costs as a percentage of sales for Leamon Inc.are 75%,current sales are $600,000,and fixed costs are $110,000.How much will operating income change if sales increase By $50,000?

If the contribution margin ratio for Harrison Company is 38%,sales were $425,000 and fixed costs were $100,000,what was the income from operations?

If fixed costs are $850,000 and the unit contribution margin is $50,profit is zero when 15,000 units are sold.

If direct materials cost per unit increases,the break-even point will increase.

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Costs that vary in total in direct proportion to changes in an activity level are called

Assuming that last year's fixed costs totaled $910,000,what was Kennedy Co.'s break-even point in units?

If fixed costs are $250,000,the unit selling price is $105,and the unit variable costs are $65,what is the break-even sales (in units)?

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Which of the following activity bases would be the most appropriate for food costs of A hospital?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 11: Cost Behavior and Cost-Volume-Profit Analysis

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

The dollars available from each unit of sales to cover fixed cost and profit is the contribution margin per unit.

DeGiaimo Co.has an operating leverage of 5.If next year's sales are expected to increase by 10%,then the company's operating income will increase by 50%.

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95.

The fixed cost per unit varies with changes in the level of activity.

The variable cost per unit remains constant with changes in the level of activity.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Variable costs as a percentage of sales for Leamon Inc.are 75%,current sales are $600,000,and fixed costs are $110,000.How much will operating income change if sales increase By $50,000?

If the contribution margin ratio for Harrison Company is 38%,sales were $425,000 and fixed costs were $100,000,what was the income from operations?

If fixed costs are $850,000 and the unit contribution margin is $50,profit is zero when 15,000 units are sold.

If direct materials cost per unit increases,the break-even point will increase.

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Costs that vary in total in direct proportion to changes in an activity level are called

Assuming that last year's fixed costs totaled $910,000,what was Kennedy Co.'s break-even point in units?

If fixed costs are $250,000,the unit selling price is $105,and the unit variable costs are $65,what is the break-even sales (in units)?

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Which of the following activity bases would be the most appropriate for food costs of A hospital?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters