Question 1

In a contribution format income statement, sales minus cost of goods sold equals the gross margin.

Accepted Answer

A) True 
 B)False

Question 2

To the nearest whole dollar, what should be the total lease cost at a sales volume of 16,900 units in a month? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $407,290 
B) $482,000 
C) $570,414 
D) $444,645 
A) $407,290 
B) $482,000 
C) $570,414 
D) $444,645

Question 3

Which of the following would be considered a product cost for external financial reporting purposes?

Accepted Answer

A) Cost of a warehouse used to store finished goods. 
B) Cost of guided public tours through the company's facilities. 
C) Cost of travel necessary to sell the manufactured product. 
D) Cost of sand spread on the factory floor to absorb oil from manufacturing machines. 
A) Cost of a warehouse used to store finished goods. 
B) Cost of guided public tours through the company's facilities. 
C) Cost of travel necessary to sell the manufactured product. 
D) Cost of sand spread on the factory floor to absorb oil from manufacturing machines.

Question 4

Gabruk Inc. is a merchandising company. Last month the company's merchandise purchases totaled $88,000. The company's beginning merchandise inventory was $15,000 and its ending merchandise inventory was $13,000. What was the company's cost of goods sold for the month?

Accepted Answer

A) $88,000 
B) $90,000 
C) $86,000 
D) $116,000 
A) $88,000 
B) $90,000 
C) $86,000 
D) $116,000

Question 5

The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best be described as a:

Accepted Answer

A) variable cost. 
B) fixed cost. 
C) product cost. 
D) prime cost. 
A) variable cost. 
B) fixed cost. 
C) product cost. 
D) prime cost.

Question 6

A soft drink bottler incurred the following plant utility costs: 1,800 units bottled with utility costs of $5,750, and 1,500 units bottled with utility costs of $5,200. What is the variable cost per unit bottled (Use the High-low method. Round to the nearest cent.)

Accepted Answer

A) $3.47 
B) $3.19 
C) $1.83 
D) None of these is true. 
A) $3.47 
B) $3.19 
C) $1.83 
D) None of these is true.

Question 7

In describing the cost formula equation Y = a + bX, which of the following statements is correct?

Accepted Answer

A) "X" is the dependent variable. 
B) "a" is the fixed component. 
C) In the high-low method, "b" equals change in activity divided by change in costs. 
D) As "X" increases "Y" decreases. 
A) "X" is the dependent variable. 
B) "a" is the fixed component. 
C) In the high-low method, "b" equals change in activity divided by change in costs. 
D) As "X" increases "Y" decreases.

Question 8

Conversion costs do NOT include:

Accepted Answer

A) depreciation. 
B) direct materials. 
C) indirect labor. 
D) indirect materials. 
A) depreciation. 
B) direct materials. 
C) indirect labor. 
D) indirect materials.

Question 9

Within the relevant range, variable cost per unit will:

Accepted Answer

A) increase as the level of activity increases. 
B) remain constant. 
C) decrease as the level of activity increases. 
D) none of these. 
A) increase as the level of activity increases. 
B) remain constant. 
C) decrease as the level of activity increases. 
D) none of these.

Question 10

The following data pertains to activity and maintenance costs for two recent years: $\begin{array}{lrr} 
& \text { Year 2 } & \text { Year 1 } \
\text { Activity level in units} & 12,000 & 8,000 \
\text { Maintenance cost } & \$ 15,000 & \$ 12,000
\end{array}$ Using the high-low method, the cost formula for maintenance would be:

Accepted Answer

A) $1.50 per unit 
B) $1.25 per unit 
C) $3,000 plus $1.50 per unit 
D) $6,000 plus $0.75 per unit 
A) $1.50 per unit 
B) $1.25 per unit 
C) $3,000 plus $1.50 per unit 
D) $6,000 plus $0.75 per unit

Question 11

The gross margin for April is:

Accepted Answer

A) $287,500 
B) $215,000 
C) $537,600 
D) $160,100 
A) $287,500 
B) $215,000 
C) $537,600 
D) $160,100

Question 12

What is the best estimate of the company's contribution margin for this year?

Accepted Answer

A) $252,000 
B) $300,000 
C) $158,000 
D) $120,000 
A) $252,000 
B) $300,000 
C) $158,000 
D) $120,000

Question 13

In making the decision to invest in the model 240 machine, the opportunity cost was:

Accepted Answer

A) $430,000 
B) $441,000 
C) $387,000 
D) $429,000 
A) $430,000 
B) $441,000 
C) $387,000 
D) $429,000

Question 14

Haras Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $141.30 per unit.   The best estimate of the total variable cost per unit is:

Accepted Answer

A) $123.40 
B) $79.60 
C) $57.90 
D) $130.70 
A) $123.40 
B) $79.60 
C) $57.90 
D) $130.70

Question 15

Using the high-low method, the estimate of the variable component of inspection cost per unit produced is closest to:

Accepted Answer

A) $3.15 
B) $0.32 
C) $3.40 
D) $13.91 
A) $3.15 
B) $0.32 
C) $3.40 
D) $13.91

Question 16

The best estimate of the total cost to manufacture 1,200 units is closest to:

Accepted Answer

A) $132,160 
B) $121,920 
C) $129,600 
D) $137,280 
A) $132,160 
B) $121,920 
C) $129,600 
D) $137,280

Question 17

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 33,200 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $424,960 
B) $448,000 
C) $436,480 
D) $472,289 
A) $424,960 
B) $448,000 
C) $436,480 
D) $472,289

Question 18

At a volume of 10,000 units, Company P incurs $30,000 in factory overhead costs, including $10,000 in fixed costs. Assuming that this activity is within the relevant range, if volume increases to 12,000 units, Company P would expect to incur total factory overhead costs of:

Accepted Answer

A) $36,000 
B) $34,000 
C) $30,000 
D) $32,000 
A) $36,000 
B) $34,000 
C) $30,000 
D) $32,000

Question 19

Average maintenance costs are $1.50 per machine-hour at an activity level of 8,000 machine-hours and $1.20 per machine-hour at an activity level of 13,000 machine-hours. Assuming that this activity is within the relevant range, total expected maintenance cost for a budgeted activity level of 10,000 machine-hours would be closest to:

Accepted Answer

A) $16,128 
B) $15,000 
C) $13,440 
D) $11,433 
A) $16,128 
B) $15,000 
C) $13,440 
D) $11,433

Question 20

In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:

Accepted Answer

A) $12,000 
B) $1,000 
C) $54,000 
D) $42,000 
A) $12,000 
B) $1,000 
C) $54,000 
D) $42,000

In a contribution format income statement, sales minus cost of goods sold equals the gross margin.

To the nearest whole dollar, what should be the total lease cost at a sales volume of 16,900 units in a month? (Assume that this sales volume is within the relevant range.)

Which of the following would be considered a product cost for external financial reporting purposes?

Gabruk Inc. is a merchandising company. Last month the company's merchandise purchases totaled $88,000. The company's beginning merchandise inventory was $15,000 and its ending merchandise inventory was $13,000. What was the company's cost of goods sold for the month?

The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best be described as a:

A soft drink bottler incurred the following plant utility costs: 1,800 units bottled with utility costs of $5,750, and 1,500 units bottled with utility costs of $5,200. What is the variable cost per unit bottled (Use the High-low method. Round to the nearest cent.)

In describing the cost formula equation Y = a + bX, which of the following statements is correct?

Conversion costs do NOT include:

Within the relevant range, variable cost per unit will:

The following data pertains to activity and maintenance costs for two recent years: Year 2 Year 1 Activity level in units 12,000 8,000 Maintenance cost \ 15,000 \ 12,000 Using the high-low method, the cost formula for maintenance would be:

The gross margin for April is:

What is the best estimate of the company's contribution margin for this year?

In making the decision to invest in the model 240 machine, the opportunity cost was:

Haras Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $141.30 per unit. The best estimate of the total variable cost per unit is:

Using the high-low method, the estimate of the variable component of inspection cost per unit produced is closest to:

The best estimate of the total cost to manufacture 1,200 units is closest to:

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 33,200 units? (Assume that this sales volume is within the relevant range.)

At a volume of 10,000 units, Company P incurs $30,000 in factory overhead costs, including $10,000 in fixed costs. Assuming that this activity is within the relevant range, if volume increases to 12,000 units, Company P would expect to incur total factory overhead costs of:

In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters

Exam 1: Managerial Accounting and Cost Concepts

In a contribution format income statement, sales minus cost of goods sold equals the gross margin.

To the nearest whole dollar, what should be the total lease cost at a sales volume of 16,900 units in a month? (Assume that this sales volume is within the relevant range.)

Which of the following would be considered a product cost for external financial reporting purposes?

Gabruk Inc. is a merchandising company. Last month the company's merchandise purchases totaled $88,000. The company's beginning merchandise inventory was $15,000 and its ending merchandise inventory was $13,000. What was the company's cost of goods sold for the month?

The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best be described as a:

A soft drink bottler incurred the following plant utility costs: 1,800 units bottled with utility costs of $5,750, and 1,500 units bottled with utility costs of $5,200. What is the variable cost per unit bottled (Use the High-low method. Round to the nearest cent.)

In describing the cost formula equation Y = a + bX, which of the following statements is correct?

Conversion costs do NOT include:

Within the relevant range, variable cost per unit will:

The following data pertains to activity and maintenance costs for two recent years: Year 2 Year 1 Activity level in units 12,000 8,000 Maintenance cost \ 15,000 \ 12,000 Using the high-low method, the cost formula for maintenance would be:

The gross margin for April is:

What is the best estimate of the company's contribution margin for this year?

In making the decision to invest in the model 240 machine, the opportunity cost was:

Haras Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $141.30 per unit. The best estimate of the total variable cost per unit is:

Using the high-low method, the estimate of the variable component of inspection cost per unit produced is closest to:

The best estimate of the total cost to manufacture 1,200 units is closest to:

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 33,200 units? (Assume that this sales volume is within the relevant range.)

At a volume of 10,000 units, Company P incurs $30,000 in factory overhead costs, including $10,000 in fixed costs. Assuming that this activity is within the relevant range, if volume increases to 12,000 units, Company P would expect to incur total factory overhead costs of:

In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters