..1 T-Mobile 5:28 PM 57% X MANAGERIAL ACCOUNT... A that will differ 1. Relevant information refers to among the alternative courses of action. A) future costs only B) future revenues only Cpast costs and revenues D) future costs and revenues on 2. Fixed selling expenses affect the calculation of the contribution income statement. Fixed selling expenses do NOT affect the calculation of on the absorption income statement. A) contribution margin; gross margin B) operating income; gross margin C) gross margin; contribution margin D) operating income; contribution margin 3. Variable selling expenses affect the calculation of on the contribution income statement. Variable selling expenses do NOT affect the calculation of on the absorption income statement. A) gross margin; contribution margin B) operating income; contribution margin C) gross margin; operating income D) contribution margin; gross margin 4. A company is trying to decide which product to manufacture. The following information is available: Costs Product A Product B Direct Materials 1 $4.50 per unit $5.00 per unit Direct Materials 2 $1.75 per unit $2.50 per unit Direct Materials 3 $3.75 per unit $2.75 per unit Direct Labor $1.10 per unit $1.10 per unit Which product cost is irrelevant to the decision? A) Direct Materials 1 B) Direct Materials 2 5. Green Company has no beginning and ending inventories, and reports the following information for its only product: Direct materials used $475,000 Direct labor $100,000 Fixed indirect manufacturing $125,000 Variable indirect manufacturing $50,000 Variable selling and administrative $60,000 Fixed selling and administrative $25,000 Units produced and sold 150,000 Blue Company uses the absorption approach to prepare the income statement. What is the product cost per unit? A) $5.00 B) $5.25 C) $5.40 D) $5.57 6. Great Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used $450,000 Direct labor $150,000 Fixed indirect manufacturing $125,000 Fixed selling and administrative $150,000 Variable indirect manufacturing $75,000 Variable selling and administrative $110,000 Selling price(per unit) $80 Units produced and sold 20,100 Stone Company uses the absorption approach to prepare the income statement. What is the manufacturing cost of goods sold? A) $600,000 B) $800,000 C) $875,000 D) $1,010,000 C) $875,000 D) $1,010,000 7. Smart Company is trying to decide which product to manufacture. Expected direct materials costs are $6.00 per unit for each product. The expected direct labor costs are $3.00 per unit for one product and $5.00 per unit for another product. In choosing between the two products, the direct materials costs ar and the direct labor costs are A) irrelevant; irrelevant B) irrelevant; relevant C) relevant; irrelevant D) relevant, relevant 8. In decision making situations, aspects may dominate quantitative aspects in many decisions. A) qualitative B) relevant C) precision D) accuracy 9. For internal decision-making purposes, many companies use the income statement using the approach. For externa reporting, most companies use the income statement using the _approach. A) absorption; absorption B) contribution; absorption C) qualitative D) full costing; variable costing income statement. What is the contribution margin income? A) $350,000 B) $425,000 C) $575,000 D) $650,000 12. NEIU Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used $350,000 Direct labor $175,000 Fixed indirect manufacturing $150,000 Fixed selling and administrative $125,000 Variable indirect manufacturing $100.000 Variable selling and administrative $75,000 Selling price(per unit) $100 Units produced and sold 20,000 NEIU Company uses the full absorption approach to prepare the income statement. What is the gross profit? A) $750,000 B) $1,000,000 C) $1,150,000 D) $1,225,000 between two 13. Differential cost is the difference in alternatives. A) average cost B) marginal cost C) median cost D) total cost 14. Incremental costs are the generated by a proposed alternative. A) additional revenues B) additional revenues or reduced costs C) reduced costs D) additional costs or reduced revenues