1. Which of the following is a variable cost? A. Direct materials cost B. Straightminus line depreciationexpense...
Question:
1. Which of the following is a variable cost?
A. Direct materials cost B. Straightminus line depreciationexpense C. Property taxes D. Salary of plant manager
2. Variable cost per unit, within the relevant range,will:
A. decrease as production increases. B. increase as productiondecreases. C. remain the same as production levels change. D.decrease as production decreases.
3. Which of the following statements is true of the behavior oftotal fixed costs, within the relevant range?
A.They will decrease as production decreases. B.They willincrease as production decreases. C. They will decrease asproduction increases. D. They will remain the same as productionlevels change.
4. Assume that John's cellphone service provider charges $7.00per month and $ 0.10per minute per call. If? John's currentbill is $ 80.00, how many calling minutes did John use?
A. 660 minutes B. 800 minutes C.730 minutes D.880 minutes
5. The relevant range of Orleans Company is between 100,000units and? 180,000 units per month. If the company produces beyond 180,000 units per month:
A.the fixed costs may change, but the variable cost per unitwill remain the same.
B.both the fixed costs and the variable cost per unit maychange.
C.the fixed costs and the variable cost per unit will notchange.
D. the fixed costs will remain the? same, but the variable costper unit may change.
6. Which of the following is the right formula for calculatingtotal mixed cost?
A. Total mixed cost = (Variable cost per unit x Number of units) + Total fixed cost
B. Total mixed cost = (Variable cost per unit / Number of units) + Total fixed cost
C. Total mixed cost = (Variable cost per unit x Number of units) minus Total fixed cost
D. Total mixed cost = (Variable cost per unit / Number of units) minus Total fixed cost
7. The dollar amount that provides for covering fixed costs and then provides for operating income is called:
A. contribution margin.
B. variable cost.
C. total cost.
D. margin of safety.
8. Contribution margin ratio is the ratio of contributionmargin? to:
A. cost of goods sold.
B. total variable costs.
C. net sales revenue.
D. total fixed costs.
9. Which of the following is a period cost?
A. Administrative cost
B. Direct materials cost
C. Manufacturing overhead
D. Direct labor cost
10. A(n) ________ groups cost by behavior; that is, costs are classified as either variable costs or fixed costs.
A. traditional income statement
B. absorption costing income statement
C. balance sheet
D. contribution margin income statement
11. Contribution margin ratio is equal to:
A. fixed costs divided by contribution margin per unit.
B. net sales revenue minus variable costs.
C. contribution margin divided by net sales revenue.
D. net sales revenue per unit minus variable costs per unit.
12. Young Company has provided the following information:
Price per unit $42
Variable cost per unit $12
Fixed costs per month $20000
Calculate the contribution margin per unit.
A. $ 54
B. $ 18
C. $ 30
D. $ 42
13. Pluto Company sold 2000units in October at a price of $ 35per unit. The variable cost is $ 25 per unit. Calculate the totalcontribution margin.
A. $ 120000
B. $ 20000
C. $ 50000
D. $ 70000
14. Which of the following formulae is the right formula forcalculating contribution margin ratio?
A. Contribution margin ratio = Contribution margin x Net salesrevenue
B. Contribution margin ratio = Contribution margin + Net salesrevenue
C. Contribution margin ratio = Contribution margin minus Netsales revenue
D. Contribution margin ratio = Contribution margin / Net salesrevenue
15. One of the assumptions of cost volume profit (CVP) analysisis that there are no changes in? the:
A. inventory levels.
B. accounts payable.
C. accounts receivables.
D. cash balance.
16. Margaret sells hand knit scarves at a flea market. Eachscarf sells for $ 30. Margaret pays $ 40 to rent a vending spacefor one day. The variable costs are $ 20 per scarf. How manyscarves should she sell each day in order to break even?
A. 30 scarves
B. 2 scarves
C. 4 scarves
D. 3 scarves
17. ________ is a "what if" technique that estimates profit orloss results if selling price, costs, volume, or underlyingassumptions change.
A. Sensitivity analysis
B. Operating leverage
C. High - low method of analysis
D. Contribution margin
18. When the total fixed costs increases, the contributionmargin per unit:
A. increases.
B. remains the same.
C. decreases.
D. increases proportionately.
19. When the total fixed costs increases, the breakeven point:
A. remains the same.
B. decreases.
C. increases.
D. decreases proportionately.
Financial and Managerial Accounting
ISBN: 978-1285866307
13th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac