• Question 1

  2 out of 2 points

  

  The contribution margin income statement is different from the traditional income statement because

  Selected Answer:	b. It separates out fixed costs from variable costs.
  Answers:	a. It clearly indicates the cost of goods sold.
  	b. It separates out fixed costs from variable costs.
  	c. It separates out product costs from period costs.
  	d. It can be used for external financial reporting.

• Question 2

  0 out of 2 points

  

  Outside the relevant range of activity

  Selected Answer:	B. Cost estimates (based on costs observed within the relevant range) will be accurate.
  Answers:	A. Unit variable costs might not be constant.
  	B. Cost estimates (based on costs observed within the relevant range) will be accurate.
  	C. Unit fixed costs will be constant.
  	D. Costs will be linear.

• Question 3

  0 out of 2 points

  

  Which of the following is the equation for the break-even point in SALES DOLLARS?

  Selected Answer:	A. (Total fixed costs + target profit) (unit contribution margin)
  Answers:	A. (Total fixed costs + target profit) (unit contribution margin)
  	B. Total fixed costs (contribution margin ratio)
  	C. (Total fixed costs + target profit) (unit price unit fixed cost)
  	D. Total fixed costs (unit price unit variable cost)

• Question 4

  2 out of 2 points

  

  ABC Corp does not have enough production employees to meet their demand. Until they can hire more workers, managers should push sales of

  Selected Answer:	c. The product with the highest unit contribution margin per direct labor hour.
  Answers:	a. The product with the highest unit contribution margin.
  	b. The product with the lowest unit fixed costs.
  	c. The product with the highest unit contribution margin per direct labor hour.
  	d. The product with the lowest unit variable costs.

• Question 5

  0 out of 2 points

  

  Which of the following statements about variable costing is true?

  Selected Answer:	b. In variable costing, the only costs that are treated as period costs (that is, are expensed as incurred) are the selling and administrative costs.
  Answers:	a. Using variable costing for manager performance evaluation will eliminate the incentive to overproduce.
  	b. In variable costing, the only costs that are treated as period costs (that is, are expensed as incurred) are the selling and administrative costs.
  	c. Variable costing is used to create the income statement released to external investors.
  	d. In variable costing, fixed manufacturing overhead costs are recorded as inventory (that is, are included in product costs) until the product is sold.

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