Question 1

Income taxes

Accepted Answer

A) will increase the break-even point. 
B) will decrease the break-even point. 
C) have no impact on the break-even point. 
D) may increase or decrease the break-even point depending upon the income tax rate. 
A) will increase the break-even point. 
B) will decrease the break-even point. 
C) have no impact on the break-even point. 
D) may increase or decrease the break-even point depending upon the income tax rate.

Question 2

Another term for cost incurred to sell and deliver products is:

Accepted Answer

A) Differential costs. 
B) Administrative costs. 
C) General costs. 
D) Distribution costs. 
A) Differential costs. 
B) Administrative costs. 
C) General costs. 
D) Distribution costs.

Question 3

Johns Company operates in three different industries each of which is appropriately regarded as a reportable segment.Segment No.1 contributed 60 percent of Johns Company's total sales.Sales for Segment No.1 were $500,000 and total variable costs were $400,000.Total common costs for all segments were $320,000.Johns allocates common costs based on the ratio of each segment's sales to the total sales.What should be the contribution margin presented for Segment No.1?

Accepted Answer

A) $(100,000) 
B) $ 8,000 
C) $ 20,000 
D) $ 100,000 
A) $(100,000) 
B) $ 8,000 
C) $ 20,000 
D) $ 100,000

Question 4

Consider the Marshall Company's segment analysis:   Common costs are allocated based on sales dollars.If Marshall eliminates Segment B,what is the impact on the operating loss of the company?

Accepted Answer

A) The loss decreases by $40,000. 
B) The loss increases by $20,000. 
C) The loss decreases by $60,000. 
D) The loss increases by $40,000. 
A) The loss decreases by $40,000. 
B) The loss increases by $20,000. 
C) The loss decreases by $60,000. 
D) The loss increases by $40,000.

Question 5

Consider the following information about the Gumm Company:   Budgeted fixed costs are $550,000.The break-even number of cases for the mint gum is:

Accepted Answer

A) 250,000 
B) 100,000 
C) 132,000 
D) 150,000 
A) 250,000 
B) 100,000 
C) 132,000 
D) 150,000

Question 6

Which of the following is true about absorption costing?

Accepted Answer

A) No fixed factory overhead is charged to production. 
B) It is also known as direct costing. 
C) The term used to designate the difference between sales and cost of goods sold is the "manufacturing margin." 
D) Overapplied factory overhead is reflected in the income statement as a reduction cost of goods sold. 
A) No fixed factory overhead is charged to production. 
B) It is also known as direct costing. 
C) The term used to designate the difference between sales and cost of goods sold is the "manufacturing margin." 
D) Overapplied factory overhead is reflected in the income statement as a reduction cost of goods sold.

Question 7

A traditional break-even chart is illustrated below:   Identify each letter on the above chart,using the proper terminology.

Accepted Answer

The answer of A traditional break-even chart is illustrated below:...

Question 8

The Blue Saints Band is holding a concert in Toronto.Fixed costs relating to staging a concert are $350,000.Variable costs per patron are $5.00.The selling price for a tickets $25.00.The Blue Saints Band has sold 23,000 tickets so far. How many tickets does the Blue Saints Band need to sell to achieve net income of $75,000.

Accepted Answer

A) 21,250 
B) 14,000 
C) 17,500 
D) 17,000 
A) 21,250 
B) 14,000 
C) 17,500 
D) 17,000

Question 9

Calico Corporation makes the following products:   Budgeted fixed costs are $1,560,000.The break-even point in total yards is:

Accepted Answer

A) 2,000,000 
B) 2,500,000 
C) 1,950,000 
D) 2,080,000 
A) 2,000,000 
B) 2,500,000 
C) 1,950,000 
D) 2,080,000

Question 10

Chase Company's new product is expected to have a sales price of $16 and variable unit price of $8.Fixed costs are expected to be $560,000.What is the break-even point in units?

Accepted Answer

A) 56,000 
B) 70,000 
C) 37,333 
D) 80,000 
A) 56,000 
B) 70,000 
C) 37,333 
D) 80,000

Question 11

Westwood Gear,Inc. ,recently received a special order to manufacture 10,000 units for a Canadian company.This order specified that the selling price per unit should not exceed $50.Since the order was received without the effort of the sales department,no commission would be paid.However,an export handling charge of $5 per unit would be incurred.Management anticipates that acceptance of the order will have no effect on other sales.
The company is now operating at 80 percent of capacity,or 80,000 units,and expects to continue at this level for the coming year without the Canadian order.Unit costs based on estimated actual capacity for the coming year include:   Prepare an analysis showing the effect on profits if the special order is accepted by the company.Based on your analysis,should the order be filled,and why?

Accepted Answer

@#IMG-DLM& The order would be likely turned down i

Question 12

The relative percentage of unit sales among the various products made by a firm is the:

Accepted Answer

A) sales volume. 
B) sales margin. 
C) sales mix. 
D) sales ratio. 
A) sales volume. 
B) sales margin. 
C) sales mix. 
D) sales ratio.

Question 13

Jasper Company makes two versions of one product,Standard and Deluxe.In November,sales of standard and Deluxe amount to $680,000 and $520,000,respectively.The contribution margin ratio for Standard is 30% and Standard had direct fixed production and administrative costs of $125,000.The contribution margin ratio for Deluxe was 40% and direct fixed costs were $160,000.Common costs that couldn't be allocated in a meaningful way were $100,000.
Prepare a segmented income statement for the month of November.

Accepted Answer

Jasper Company
Segme

Question 14

Chapman Corporation manufactures lamps.Management is currently studying whether the company should continue to make the cord assembly or purchase them from Graham Company for $5.25.Chapman needs 20,000 cord assemblies a year.If the part is purchased,the company can not use the released facilities for another manufacturing activity. Chapman's unit cost to manufacture the cord assembly is:   The decision Chapman should make and the related differential income is:
Decision Differential Income

Accepted Answer

A) Buy from Graham $10,000 
B) Make the assembly $10,000 
C) Make the assembly $25,000 
D) Buy from Graham $25,000 
A) Buy from Graham $10,000 
B) Make the assembly $10,000 
C) Make the assembly $25,000 
D) Buy from Graham $25,000

Question 15

Bradley Inc.has the capacity to make 100,000 windows.Bradley is currently operating at 80% capacity.The windows usually sell for $20.00 each.Costs for each window follow:   The Army has offered to buy 10,000 windows for $12.00 each for barracks.Bradley should:

Accepted Answer

A) Reject the offer because it currently does not have enough capacity to accept the order. 
B) Reject the order because the company will lose $20,000 on the order. 
C) Accept the offer because the company will realize $20,000 in additional contribution margin. 
D) Accept the offer because the company will realize $40,000 in additional contribution margin. 
A) Reject the offer because it currently does not have enough capacity to accept the order. 
B) Reject the order because the company will lose $20,000 on the order. 
C) Accept the offer because the company will realize $20,000 in additional contribution margin. 
D) Accept the offer because the company will realize $40,000 in additional contribution margin.

Question 16

A Company is planning to sell Product Z for $10 a unit.Variable costs are $6 a unit and fixed costs are $110,000.If the company is currently selling 30,000 units,what is the margin of safety in units?

Accepted Answer

A) 2,500 
B) 5,000 
C) 27,500 
D) 25,000 
A) 2,500 
B) 5,000 
C) 27,500 
D) 25,000

Question 17

A technique that uses the degrees of cost variability to measure the effect of changes in volume on resulting profits is:

Accepted Answer

A) Standard costing. 
B) Variance analysis. 
C) Cost-volume-profit analysis. 
D) Segment profitability analysis. 
A) Standard costing. 
B) Variance analysis. 
C) Cost-volume-profit analysis. 
D) Segment profitability analysis.

Question 18

If the fixed costs related to a product increase while variable costs and sales price remain constant,what will happen to (1)contribution margin and (2)break-even point?

Accepted Answer

A) Unchanged Unchanged 
B) Unchanged Increase 
C) Increase Decrease 
D) Decrease Increase 
A) Unchanged Unchanged 
B) Unchanged Increase 
C) Increase Decrease 
D) Decrease Increase

Question 19

Tress Enterprises manufactures shampoo and conditioner.Last year,Tress sold 120,000 bottles of product.Unit sales of conditioner amounted to 60% of the number of units of shampoo.This trend is expected to continue.The selling price for both products is $12.00,however,the variable cost of a unit of shampoo is $6.00,while the variable cost of a unit of conditioner is $8.00.Fixed costs are expected to be $420,000.
​
(a)Compute the quantity of each product sold.
(b)Compute the weighted-average contribution margin per unit.
(c)Compute the overall break-even point in units.
(d)Compute the unit sales of shampoo and conditioner at the break-even point.
(e)Compute the dollar sales of shampoo and conditioner at the break-even point.

Accepted Answer

(a)Total sales = shampoo sales + conditi

Question 20

What costs are treated as product costs under direct costing?

Accepted Answer

A) Only direct costs 
B) Only variable manufacturing costs 
C) All variable costs 
D) All variable and fixed manufacturing costs 
A) Only direct costs 
B) Only variable manufacturing costs 
C) All variable costs 
D) All variable and fixed manufacturing costs

Income taxes

Another term for cost incurred to sell and deliver products is:

Consider the Marshall Company's segment analysis: Common costs are allocated based on sales dollars.If Marshall eliminates Segment B,what is the impact on the operating loss of the company?

Consider the following information about the Gumm Company: Budgeted fixed costs are $550,000.The break-even number of cases for the mint gum is:

Which of the following is true about absorption costing?

A traditional break-even chart is illustrated below: Identify each letter on the above chart,using the proper terminology.

Calico Corporation makes the following products: Budgeted fixed costs are $1,560,000.The break-even point in total yards is:

Chase Company's new product is expected to have a sales price of $16 and variable unit price of $8.Fixed costs are expected to be $560,000.What is the break-even point in units?

The relative percentage of unit sales among the various products made by a firm is the:

Bradley Inc.has the capacity to make 100,000 windows.Bradley is currently operating at 80% capacity.The windows usually sell for $20.00 each.Costs for each window follow: The Army has offered to buy 10,000 windows for $12.00 each for barracks.Bradley should:

A Company is planning to sell Product Z for $10 a unit.Variable costs are $6 a unit and fixed costs are $110,000.If the company is currently selling 30,000 units,what is the margin of safety in units?

A technique that uses the degrees of cost variability to measure the effect of changes in volume on resulting profits is:

If the fixed costs related to a product increase while variable costs and sales price remain constant,what will happen to (1)contribution margin and (2)break-even point?

What costs are treated as product costs under direct costing?

Introduction to Cost Accounting

Accounting for Materials

Accounting for Labor

Accounting for Factory Overhead

Process Cost Accounting--General Procedures

Process Cost Accounting--Additional Procedures

Master Budget and Flexible Budgeting

Standard Cost Accounting--Materials, labor, and Factory Overhead

Cost Accounting for Service Businesses

Filters

Exam 10: Cost Analysis for Management Decision Making

Income taxes

Another term for cost incurred to sell and deliver products is:

Consider the Marshall Company's segment analysis: Common costs are allocated based on sales dollars.If Marshall eliminates Segment B,what is the impact on the operating loss of the company?

Consider the following information about the Gumm Company: Budgeted fixed costs are $550,000.The break-even number of cases for the mint gum is:

Which of the following is true about absorption costing?

A traditional break-even chart is illustrated below: Identify each letter on the above chart,using the proper terminology.

Calico Corporation makes the following products: Budgeted fixed costs are $1,560,000.The break-even point in total yards is:

Chase Company's new product is expected to have a sales price of $16 and variable unit price of $8.Fixed costs are expected to be $560,000.What is the break-even point in units?

The relative percentage of unit sales among the various products made by a firm is the:

Bradley Inc.has the capacity to make 100,000 windows.Bradley is currently operating at 80% capacity.The windows usually sell for $20.00 each.Costs for each window follow: The Army has offered to buy 10,000 windows for $12.00 each for barracks.Bradley should:

A Company is planning to sell Product Z for $10 a unit.Variable costs are $6 a unit and fixed costs are $110,000.If the company is currently selling 30,000 units,what is the margin of safety in units?

A technique that uses the degrees of cost variability to measure the effect of changes in volume on resulting profits is:

If the fixed costs related to a product increase while variable costs and sales price remain constant,what will happen to (1)contribution margin and (2)break-even point?

What costs are treated as product costs under direct costing?

Introduction to Cost Accounting

Accounting for Materials

Accounting for Labor

Accounting for Factory Overhead

Process Cost Accounting--General Procedures

Process Cost Accounting--Additional Procedures

Master Budget and Flexible Budgeting

Standard Cost Accounting--Materials, labor, and Factory Overhead

Cost Accounting for Service Businesses

Filters