accounting1
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
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| show | They will increase as production decreases
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| show | - They are constant on a per unit basis but vary in total as production changes.
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| Which of the following is a characteristic of a variable cost? | show 🗑
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| show | breakeven point
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| show | - They will decrease as production decreases
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| Which of the following is not a fixed cost? | show 🗑
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| show | They will remain the same as production levels change
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| On a CVP graph, what does the horizontal line intersecting the dollar axis at the level of total cost represent? | show 🗑
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| show | - When variable costs are less than sales revenue, there is a positive contribution margin
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| show | total variable cost
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| show | total sales revenue
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| Which of the following is an underlying assumption of the cost-volume-profit graph? | show 🗑
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| show | they will remain the same as production levels change
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| contribution margin | show 🗑
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| True/False: Sensitivity analysis is a “what if” technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes. | show 🗑
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| True/False: The breakeven point represents the minimum number of units a company must sell before it earns a profit. | show 🗑
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| True/False: When a company produces more units than it sells, absorption costing income will exceed variable costing income. | show 🗑
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| show | true
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| True/False: CVP analysis assumes that the only factor that affects costs is change in volume. | show 🗑
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| True/False: If all other fathers are constant, an increase in fixed cost will increase the breakeven point. | show 🗑
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| show | true
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| True/False: Both the income statement approach and the contribution margin approach may be used for CVP analysis. | show 🗑
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| show | true
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| True/False: Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars. | show 🗑
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| show | true
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| show | false
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| show | true
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| True/False: The total manufacturing cost per unit increases as total production volume increases. | show 🗑
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| True/False: Total variable costs change in response to changes in the volume of production. | show 🗑
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| show | true
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| True/False: Absorption costing net income can be manipulated by management of inventory levels. | show 🗑
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| show | true
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| show | true
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| True/False: To calculate the weighted-average contribution margin, multiply the sum of the individual product contribution margins by the total number of all units sold. | show 🗑
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| True/False: When additional units are sold, the change in operating income is equal to the change in contribution margin. | show 🗑
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| show | false
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| True/False: If fixed expenses increase, both the breakeven point and the margin of safety increase. | show 🗑
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| show | true
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| show | false
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| True/False: If unit sales prices, unit variable costs, and total fixed costs remain the same, but the sales mix changes toward the product with the highest contribution margin ratio, the breakeven point will increase. | show 🗑
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| show | a 15% increase in total production costs
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| If the sales price per unit decreases and the variable costs remain the same, what will be the effect on the contribution margin ratio? | show 🗑
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| show | no effect, decrease, increase
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| Which of the following properly describes the difference between absorption costing and variable costing? | show 🗑
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| Which of the following statements is correct if total fixed costs decrease while the sales price per unit and variable costs per unit remain constant? | show 🗑
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| show | sales price per unit increased
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| Which of the following statements is correct if the variable cost per unit increases while the sale price per unit and total fixed costs remain constant? | show 🗑
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| If production exceeds units sold, which of the following statements is correct? | show 🗑
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| show | FAlse
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| show | - The breakeven point could increase, decrease, or remain the same
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| show | A higher operating income under variable costing
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| show | increase in the sales price per unit
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| show | An increase in the unit cost of direct materials
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| show | False
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| show | increase in the sales price per unit
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| The manager of which of the following responsibility centers is responsible primarily for controlling expenses? | show 🗑
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| What do we call the practice of directing executive attention to important deviations from budgeted amounts? | show 🗑
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| show | budgeted statement of cash flow
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| show | investment center manager
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| Which of the following is a responsibility center whose success is measured not only by its income, but also by relating income to its invested capital? | show 🗑
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| show | 60,000
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| show | sales budget
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| Which of the following statements regarding the budgeting process is correct? | show 🗑
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| XYZ Company budgeted $4 million for customer service costs, but actually spent only $3 million. Which of the following statements indicates the best course of action for management to take? | show 🗑
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| show | depreciation expense
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| The starting point in the budgeting process is the: | show 🗑
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| show | equity center
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| True/False: The production budget must be prepared before any other component of the operating budget. | show 🗑
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| show | false
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| show | true
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| show | true
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| True/False: Budgets provide benchmarks that help managers evaluate performance. | show 🗑
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| True/False: The budgeted cash collections for the current month typically take into consideration collections pertaining to credit sales of prior months. | show 🗑
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| True/False: The master budget is the set of budgeted financial statements and supporting schedules for the entire organization. | show 🗑
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| True/False: The master budget includes the operating budget, the capital expenditures budget, and the financial budget. | show 🗑
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| True/False: The cash budget impacts both the budgeted balance sheet and budgeted statement of cash flows. | show 🗑
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| show | true
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| True/False: Budgeted finished goods inventory will increase when budgeted sales are greater than budgeted production. | show 🗑
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| show | true
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| show | true
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| True/False: Budgeting is a technique which is used to plan for future cash inflows and outflows. | show 🗑
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| True/False: Budgeted cash operating expenses include depreciation expense. | show 🗑
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| True/False: An investment center is a responsibility center in which a manager is accountable for maximizing only operating income. | show 🗑
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| True/False: The starting point of a budget process is to predict operating income for the upcoming period. | show 🗑
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| True/False: Budgeted operating expenses for the current year include the expiration of insurance that was paid in a previous period. | show 🗑
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| Cost of goods sold = | show 🗑
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| Factory overhead = | show 🗑
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| Total manufacturing costs = | show 🗑
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| True/False: Management accounting's financial reports are restricted by GAAP. | show 🗑
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| Manufacturing overhead would be classfied as | show 🗑
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| show | operating expenses
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| True/False: Managerial and financial accounting both use the accrual method | show 🗑
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| show | False
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| show | True
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| show | True
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| show | false
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| show | False
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| True/False: Total manufacturing costs to account for during the year minus the beginning work in process equals cost of goods manufactured | show 🗑
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| show | False
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| show | false
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| show | factory janitorial costs
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| Inventory accounts for a manufacturer include what? | show 🗑
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| show | true
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| What best defines direct materials? | show 🗑
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| A merchandiser's purchases are equivalent to what for a manufacturer? | show 🗑
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| show | are period costs and are expensed as incurred
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Created by:
sbruckner