[1.]

Goodfit Shoe Company is a single product firm. Goodfit is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the contribution margin ratio and break-even point for next year?

Select one:

a. Contribution margin ratio: Decrease ; Break-even point: Decrease

b. Contribution margin ratio: Increase ; Break-even point: No effect

c. Contribution margin ratio: Decrease ; Break-even point: No effect

d. Contribution margin ratio: Increase ; Break-even point: Decrease

[2.]

The budgeted cost for direct materials is determined by multiplying the standard price per unit of material by the standard quantity budgeted for the production level planned.

Select one:

True

False

[3.]

When preparing a production budget, the required production equals:

Select one:

a. budgeted sales - beginning inventory + desired ending inventory.

b. budgeted sales - beginning inventory - desired ending inventory.

c. budgeted sales + beginning inventory - desired ending inventory.

d. budgeted sales + beginning inventory + desired ending inventory.

[4.]

Which of the following is correct? The break-even point occurs on the CVP graph where:

Select one:

a. total profit equals total expenses.

b. total variable expenses equal total contribution margin.

c. total contribution margin equals total fixed expenses.

d. total profit equals total fixed expenses.

[5.]

In an income statement prepared using the variable costing method, fixed selling and administrative expenses would:

Select one:

a. be used in the computation of the contribution margin.

b. be treated the same as variable manufacturing expenses.

c. be used in the computation of net operating income but not in the computation of the contribution margin.

d. not be used.

[6.]

Candy Cane Company is a single product firm with the following cost structure for next year:

Selling price per unit ................................. $1.20

Variable expenses per unit ........................ $0.72

Total fixed expenses for the year .............. $64,800

What is the company's break-even point next year in sales dollars?

Select one:

a. $108,000

b. $162,000

c. $90,000

d. $135,000

[7.]

Wide-spread adherence to ethical standards in an advanced market economy tends to result in all the following except:

Select one:

a. greater variety of goods and services available for sale.

b. higher quality goods and services.

c. safer products.

d. higher prices.

[8.]

Under variable costing, fixed manufacturing overhead is:

Select one:

a. ignored.

b. carried in an asset account

c. immediately expensed as a period cost.

d. carried in a liability account

[9.]

The Standards of Ethical Conduct for Management Accountants promulgated by the Institute of Management Accountants specifically state that management accountants' sole ethical responsibility is to not break any laws.

Select one:

True

False

[10.]