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1 A company makes two products: tables and chairs. While performing a multi-product Cost-Volume-Profit Analysis for this company, you noticed that break-even sales INCREASED due

1 A company makes two products: tables and chairs. While performing a multi-product Cost-Volume-Profit Analysis for this company, you noticed that break-even sales INCREASED due to

A a decrease in the total fixed cost.

B a decrease in the variable cost per unit for tables.

C a decrease in the selling price per unit for tables.

D an increase in the selling price per unit for chairs.

2 A company makes two products: tables and chairs. While performing a multi-product Cost-Volume-Profit Analysis for this company, you noticed that break-even sales DECREASED due to

A an increase in the total fixed cost.

B an increase in the variable cost per unit for tables.

C an increase in the variable cost per unit for chairs.

D an increase in the contribution margin ratio.

3 A company makes two products: tables and chairs. While performing a multi-product Cost-Volume-Profit Analysis for this company, you noticed that break-even units for chairs INCREASED due to

A a decrease in the total fixed cost.

B an increase in the variable cost per unit for tables.

C a decrease in the variable cost per unit for chairs.

D None of the above

4 Which of the following is TRUE about allocating overhead using a volume-based overhead rate?

A You need to know the budgeted overhead and budgeted cost driver to compute the predetermined overhead rate.

B You need to know the budgeted overhead and actual cost driver to compute the predetermined overhead rate.

C You need to know the actual overhead and budgeted cost driver to compute the predetermined overhead rate.

D You need to know the actual overhead and actual cost driver to compute the predetermined overhead rate.

5 As volume increases, what happens to your total variable cost?

A it increases within the relevant range

B it decreases within the relevant range

C it stays constant within the relevant range

D it stays constant between relevant ranges

6 When are fixed costs going to be constant?

A In total between relevant ranges

B In total within the relevant range

C Per unit between relevant ranges

D Per unit within the relevant range

7 Which of the following is FALSE about allocating overhead using activity-based costing overhead rates?

A You need to know the budgeted overhead amount for each activity pool to compute the predetermined overhead rate for that activity.

B You need to know the budgeted cost driver amount for each activity to compute the predetermined overhead rate for that activity.

C You need to know the actual overhead amount for each activity pool to allocate overhead to that activity.

D You need to know the actual cost driver amount for each activity to allocate overhead to that activity.

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