1.) Sales: 20,000 units

Variable costs per unit: $12

Fixed Costs: $10,500

Selling price: $15

Using the information above, the contribution margin ratio is

Select one:

A.20%

B.15%

C.25%

D.10%

2.) Which of the following is the best example of a mixed cost?

Select one:

A.Salary of a controller

B.Utilities

C.Hourly wage of an administrative assistant

D.Compensation of sales person consisting of a base salary and sales commission.

3.) Consider the following manufacturing costs: Direct labor $4,000; Direct materials $5,000; and Factory overhead $8,000. What is the conversion cost amount?

Select one:

A.$12,000

B.$8,000

C.$9,000

D.$5,000

4.) Contribution margin is:

Select one:

A.Excess of variable costs over sales

B.Excess of direct labor over materials costs

C.Excess of Fixed costs over variable costs

D.Excess of sales over variable cots

5.) The Break-even point is when a company's revenue is:

Select one:

A.Equal to expenses

B.More than expenses

C.Less than expenses

D.None of the above

6.) Consider the following manufacturing costs: Direct labor $4,000; Direct materials $5,000; and Factory overhead $8,000. What is the prime cost amount?

Select one:

A.$8,000

B.$4,000

C.$12,000

D.$9,000

7.) Costs where cost per unit remains the same regardless of changes in the activity base are:

Select one:

A.Fixed Costs

B.Variable costs

C.Mixed costs

D.None of the above

8.) Factory overhead variances only have fixed components.

Select one:

True

False

9.) A decrease in unit selling price decreases the break-even point.

Select one:

True

False

10.) An increase in fixed costs increases the break-even point.

Select one:

True

False

11.) If estimated factory overhead cost is $35,000 and activity base is estimated at 5,000 direct labor hours. What is the predetermined overhead rate?

Select one:

A.$5

B.$4

C.$6

D.$7

12.) The following costs are available for Jetco Manufacturing Co.

Units ProducedTotal

Cost

Jan1,000$45,550

Feb1,500$52,000

Mar1,800$57,500

Using the High-Low method, what is the estimated variable cost for producing 1,000 units? Rounding is fine.

Select one:

A.$14,938

B.$15,935

C.$12,568

D.$15,250

13.) Which of the following is considered a factory overhead cost?

Select one:

A.Direct materials

B.Direct labor

C.Factory power

D.All of the above

14.) A production cost where the cost per unit variesinverselyto the change in the activity base is a:

Select one:

A.Variable cost

B.Fixed cost

C.Mixed cost

D.Conversion cost

15.) Which of the following represents prime costs?

Select one:

A.Direct materials and direct labor

B.Direct materials and indirect labor

C.Direct materials and factory overhead

D.Indirect labor and selling expenses

16.) Direct materials, direct labor, and factory overhead represent which of the following cost?

Select one:

A.Manufacturing costs

B.Period costs

C.All of the above

D.None of the above

17.) The cost of direct materials, direct labor, and factory overhead that have entered the manufacturing process but not yet completed is:

Select one:

A.Materials inventory

B.Finished goods inventory

C.Work in process inventory

D.None of the above

18.) Manufacturing costs consist of Direct materials, direct labor, and selling expenses.

Select one:

True

False

19.) Direct labor and direct materials represent conversion costs.

Select one:

True

False

20.) The formula to calculate the break-even point in units is:

Fixed Cost divided by unit contribution margin ratio.

Select one:

True

False

21.) The formula to calculate the break-even point in dollars is:

Fixed Cost divided by unit contribution margin.

Select one:

True

False

22.) Sales: 20,000 units

Variable costs per unit: $12

Fixed Costs: $10,500

Selling price: $15

Using the information above, the break-even point is

Select one:

A.3,500 units

B.3,000 units

C.4,000

D.3,050 units

23.) Sales: 20,000 units

Variable costs per unit: $12

Fixed Costs: $10,500

Selling price: $15

Using the information above, to reach an income from operations (target profit) of $15,000 the number of units required to sell is:

Select one:

A.8,500 units

B.9,000 units

C.10,500

D.9,500 units

24.) Which of the following is NOT a characteristic of managerial accounting?

Select one:

A.Managerial accounting reports are ONLY prepared at fixed intervals (monthly, quarterly, yearly)

B.Managerial accounting reports can be prepared for the company as a whole or for a segment of the company

C.Managerial accounting reports are not used by external users such as creditors and shareholders

D.Managerial accounting information is designed to meet the specific needs of a company's management

25.) Assume the following information:

Direct Materials: 2,000 units purchased at $2.5/unit

Direct Labor: 350 hours at $15/hr

Factory Overhead: $4,200

What is the prime cost?

Select one:

A.$9,450

B.$9,200

C.$9,250

D.$10,250

26.) The following information is available for Medco Manufacturing:

Total Equivalent Units of Direct Materials: 50,000 gal

Total Equivalent Units of Conversion Costs: 48,000 gal

Direct Materials costs: $55,000

Direct Labor costs: $9,500

Factory overhead costs: $7,500

The Direct Materials cost per equivalent unit is:

Select one:

A.$1.10/gal

B.$2.10/gal

C.$1.5

D.$2.5/gal

27.) The following information is available for Medco Manufacturing:

Total Equivalent Unis of Direct Materials: 50,000 gal

Total Equivalent Unis of Conversion Costs: 48,000 gal

Direct Materials costs: $55,000

Direct Labor costs: $9,500

Factory overhead costs: $7,500

The conversion cost per equivalent unit is:

Select one:

A.$0.50/gal

B.$0.35/gal

C.$0.40/gal

D.$0.25/gal

28.) Assume the following during a production process:

Department A started and completed goods for $12,500

Department B had $15,000 in process but completed $10,500.

The entry to transfer the cost to finished goods for the period is:

Select one:

A.Credit Finished Goods for $23,000 and Debit Work in Process for $23,000

B.Debit Finished Goods for $27,500 and Credit Work in Process for $27,500

C.Debit Finished Goods for $23,000 and Credit Work In Process for $23,000

D.Debit Finished Goods for $23,000 and Credit Cost of Goods Sold for $23,000

29.) Assume the following during a production process:

Department A started and completed goods for $12,500

Department B had $15,000 in process but completed $10,500.

All finished goods are transferred out for the period

Which of the following is true?

Select one:

A.Work in process account ending balance is $27,500

B.Work in process account ending balance is $4,500

C.Work in process account ending balance is $10,500

D.Work in process account has a zero ending balance

30.) If total sales are $1,000,000 and Contribution Margin ratio is 30%, then Variable Costs are

Select one:

A.$300,000

B.$700,000

C.$400,000

D.$600,000

31.) If 500 units are sold for $12,500 and 765 units of materials are purchased for $15,300, , and Fixed Costs are $10,000, then the number of units that should be sold in order to break even is:

Select one:

A.2,000

B.2,500

C.3,000

D.None of the above

32.) Which of the following best describes the effect of changes in unit selling price on the break-even point?

Select one:

A.If unit selling price increases, the break-even point increases

B.If unit selling price decreases, the break-even point remains unchanged

C.Both A and B

D.None of the above

33.) Which of the following best describes the effect of changes in fixed cost on the break-even point?

Select one:

A.The break-eve point changes in the same direction as changes in the fixed costs

B.The break-eve point changes in the opposite direction as changes in the fixed costs

C.Both A and B

D.None of the above

34.) Factory overhead and direct labor represent which of the following:

Select one:

A.Conversion cost

B.Product Cost

C.Period Cost

D.None of the above

35.) Total Manufacturing Costs consist of:

Select one:

A.Factory Overhead, Selling Cost, and Direct Labor

B.Direct Labor, Direct Materials, and Administrative Cost

C.Direct Labor, Direct Materials, and Factory Overhead

D.Direct Labor, Direct Materials, and Work In Process

36.) At the end of the year, any balance left in the Factory Overhead account is:

Select one:

A.Carried over to the next year

B.Transferred to Cost of Goods Sold

C.Transferred to Finished Goods

D.None of the above

37.) Finished goods, work-in process, and raw materials are examples of inventory for a service business

Select one:

True

False

38.) Factory overhead costs are normally applied to jobs using aPredetermined Factory Overhead Rate

Select one:

True

False

39.) Product Costsconsist of direct labor, direct materials, and factory overhead costs whereasPeriod costsconsist of selling and administrative expenses

Select one:

True

False

40.) Factory overhead costs are indirect costs of the product such as depreciation and insurance but can also include materials and labor costs that do not enter directly into the finished product.

Select one:

True

False