Multi objective question

(1) Item A sell for $5.fixed cost per unit $1.and variable cost per unit $3.the contribution margin ratiofor item a is 20%.

False

True

(2) Wood company has fixed cost of $46000 a month and average contribution margin ratio of 30%. If monthly sale volume is$150000 the company will operate at a profit.

False

True

(3)Contribution margin is that portion of sales revenue that is not consumed by variable costs and, is available to cover fixed costs and contribute to operating income.

True

False

(4) A favorable price variance might be related to an unfavorable quantity variance.

True

False

(5) Sales representative's salaries (annual wages and commissions) is a semi variable cost.

True

False

(6) Using highly skilled workers to perform unskilled tasks results in unfavorable rate variance.

True

False

(7) The level of sales at which a company neither earns an operating profit nor incurs a loss is called the margin of safety.

True

False

(8) If management establishes ideal expectations when preparing budgets from which standard costs are determined, there would be no favorable or unfavorable variances.

True

False

(9) Manufacturing overhead cost includes both fixed and variable costs.

True

False

(10) Fixed manufacturing overhead are treated as period costs under the absorption cost system.

True

False

(11) A particular cost is a semi-variable, within a relevant range of 100 to 200 units of production. This cost is $1,000 in total when 100 units are manufactured ($10 per unit). If production is doubled to 200 units, which of the following is the most likely amount incurred for this particular cost?

• A.$ 990
• B.$1,000
• C.$1,100
• D.$2,000

(12) If production doubles, what will happen to variable costs?

• A.Total variable costs and the variable cost per unit will both double.
• B.Total variable costs will stay the same, and variable cost per unit will double.
• C.Total variable costs will double, and variable cost per unit will stay the same.
• D.Total variable costs will stay the same, and variable cost per unit will decrease

(13) The selling price of Product A is $15. The variable costs to manufacture and sell the product are $6. What is the contribution margin ratio?

• A.35%
• B.60%
• C.80%
• D.Some other percentage

(14) The selling price of Product A is $15. The variable costs to manufacture and sell the product are $6. What is the contribution margin ratio?

• A.35%
• B.60%
• C.80%
• D.Some other percentage

(14) Target operating income is $450,000 and fixed costs are $60,000. The sales price per unit is $15, with a contribution margin of 40%. How many sales units are required to achieve the target operating income?

• A.85,000 units
• B.100,000 units
• C.30,000 units
• D.None of the above.

(16) Compliance with the generally accepted accounting principles is mandatory under..................?

(17) the amount by which actual sales exceeds the break even sales is known as...........?

(18) The contribution margin ratio is 40%. Operating income is $320,000. The margin of safety is......................?

(19) The difference between the standard and actual number of labor hours to complete the task is know as............?

variance.

(20) The portion of the total overhead variance caused by incurring more overhead costs than are allowed for the actual level of activity achieved is called.............?