1. The standard price per unit of materials is used in the calculation of which of the following variances?
Materials price variance Materials quantity variance
a NO NO
b NO YES
c YES NO
d YES YES
2 If raw materials are carried in the raw materials inventory at standard cost, then it is reasonable to assume that
a The price variance is recognized when materials are purchased.
b The price variance is recognized when materials are placed into production
c All variances are prorated between work in process, finished goods, and cost of goods sold
d The raw materials account is overstated
3 Mossfeet shoe company is a single product firm. Mossfeet is predicting that a price increase next year will not cause unit sales to decrease. what effect would this price increase have on the following items for next year?
Contribution Margin Ratio Break-even Point
a Increase Decrease
b Decrease Decrease
c Increase No effect
d Decrease No effect
4. The Contribution Margin ratio is equal to:
a Total manufacturing expenses/sales
b (sales-variable expenses)/sales
c 1-(gross margin/sales)
d 1-(Contribution Margin/sales)
5 The Contribution Margin ratio always increases when the
a Break-even point increases
b Break-even point decreases
c Variable expenses as a percentage of net sales decrease
d Variable expenses as a percentage of net sales increase