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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| Which of the following statements is correct with respect to fixed costs per unit? | show 🗑
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| Which of the following describes variable costs? | show 🗑
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| show | - Variable costs vary in total with production and sales
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| show | breakeven point
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| Which of the following statements is incorrect with respect to total variable costs, within the relevant range? | show 🗑
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| show | fixed costs
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| Which of the following statements is correct with respect to variable cost per unit, within the relevant range? | show 🗑
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| show | Total fixed costs
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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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| show | volume is the only cost-driver
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| Which of the following is correct with respect to total fixed costs, within the relevant range? | show 🗑
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| show | sales revenue minus variable expenses
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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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| show | true
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| True/False: On a CVP graph, the vertical distance between the total expense line and the total sales revenue line equals the operating income or loss. | show 🗑
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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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| show | true
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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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| True/False: A method used to separate mixed costs into fixed and variable components is called the high-low method. | show 🗑
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| show | true
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| show | true
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| True/False: Fixed costs per unit decrease as production levels decrease. | 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 absorption costing approach considers fixed manufacturing costs to be product costs. | show 🗑
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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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| True/False: To find the number of units that must be sold to achieve a desired operating income, total fixed expenses plus the desired operating income are divided by the contribution margin ratio. | show 🗑
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| show | false
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| True/False: Fixed costs divided by the contribution margin per unit equals the breakeven point in unit sales. | show 🗑
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| True/False: The mixed cost per unit is constant throughout the relevant range of activity. | show 🗑
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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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| What impact would an increase in fixed costs have on the contribution margin, the margin of safety, and the breakeven point? | show 🗑
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| show | - Fixed manufacturing costs are treated as product costs under absorption costing and as period costs under variable costing.
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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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| Which of the following would explain why the margin of safety in dollars increased even though total sales dollars did not change? | show 🗑
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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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| True/False: The mixed cost per unit is constant throughout the relevant range of activity. | show 🗑
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| show | increase in the sales price per unit
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| show | cost center
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| show | management by exception
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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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| Hogan’s management has forcasted sales of 50,000 units and an increase in finished goods of 10,000 units for the upcoming year. How many units is Hogan planning to produce next year? | show 🗑
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| Which of the following budgets or financial statements is an operating budget? | show 🗑
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| Which of the following statements regarding the budgeting process is correct? | show 🗑
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| show | - Management will investigate this $1 million favorable variance to ensure that the cost savings do not reflect skimping on customer service.
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| show | depreciation expense
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| show | preparation of the sales budget
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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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| True/False: Budgeted cash collections and payments are independent of budgeted revenues and expenses. | show 🗑
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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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| show | true
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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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| show | true
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| show | true
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| show | false
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| show | true
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| show | true
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| show | true
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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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| show | false
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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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| show | indirect labor + indirect materials + utilities + supplies + janitorial costs + equipment depreciation
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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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| period costs = | show 🗑
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| True/False: Managerial and financial accounting both use the accrual method | show 🗑
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| True/False: Manufacturing overhead includes all manufacturing costs such as direct labor and direct materials | show 🗑
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| True/False: Manufacturing overhead includes indirect costs such as insurance and depreciation on the factory building | show 🗑
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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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| True/False: An increase in the work in process account during the year means that cost of goods manufactured was greater than the manufacturing costs incurred during the year | show 🗑
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| show | false
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| Period costs do not include what? | show 🗑
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| show | materials, work in process, and finished goods
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| show | true
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| show | used to determine total inventoriable product costs
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| A merchandiser's purchases are equivalent to what for a manufacturer? | show 🗑
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| corporate headquarter's property taxes | show 🗑
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Created by:
sbruckner