Question 1

PV ratio may be improved by

Accepted Answer

A) Increasing the sales price 
B) Lowering variable cost 
C) Lowering fixed cost 
D) None of the above

Question 2

Assume that a company produces two products in a manufacturing plant. One is a low volume specialty product that is produced on a demand pull basis, while the other is a high volume product that is produced on a push basis for inventory. A production volume based cost allocation system would tend to

Accepted Answer

A) Accurately reflect the product cost of the two products. 
B) Overstate the product cost of the low volume product. 
C) Understate the product cost of the low volume product. 
D) Overstate the product cost of both products.

Question 3

Plant depreciation is an example of which activity-level group?

Accepted Answer

A) Unit-level activity 
B) Facility-level activity 
C) Batch-level activity 
D) Product-level activity

Question 4

Marginal costing is a …………….

Accepted Answer

A) Method of costing 
B) Technique of costing 
C) Process of costing 
D) None of the above

Question 5

Activity based cost systems would probably provide the greatest benefits for organizations that use

Accepted Answer

A) Job order costing. 
B) Process costing. 
C) Historical costing 
D) Standard costing.

Exam 1: Marginal Costing, Contribution, and Activity-Based Costing Techniques

PV ratio may be improved by

Plant depreciation is an example of which activity-level group?

Marginal costing is a …………….

Activity based cost systems would probably provide the greatest benefits for organizations that use