1.Burger Bob's Boathouse sells only one product. 7,000 units were sold In year resulting in $70,000 of sales revenue. Variable costs were $28,000 for the year, and fixed costs were $12,000. Break-even point in volume is:

Select one:

a. 3,000 units

b. 2,000 units

c. 7,000 units

d. 2,797 units

2.How many units would have to be sold to yield a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20?

Select one:

a. 4,400 units

b. 4,800 units

c. 4,000 units

d. 1,600 units

3.Delta Merchandising, Inc., has provided the following information for the year just ended:

Net sales

$128,500

Beginning inventory

$24,000

Purchases

$80,000

Gross margin

$38,550

What was the ending inventory for the company at year-end?

Select one:

a. $65,450.

b. $9,950.

c. $24,500.

d. $14,050.

4.Gabel Inc. is a merchandising company. Last month, the company's merchandise purchases totalled $63,000. The company's beginning merchandise inventory was $13,000, and its ending merchandise inventory was $15,000. What was the company's cost of goods sold for the month?

Select one:

a. $91,000.

b. $65,000.

c.$61,000.

d. $63,000.

5.Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs were 50% of total unit costs. If 10,500 units are manufactured next month and cost behaviour patterns remain unchanged, how will costs be affected?

Select one:

a. Total variable costs will remain unchanged.

b. Fixed costs will increase in total.

c. Total cost per unit will decrease.

d.Variable cost per unit will increase.

6.Within the relevant range, what is the difference between variable costs and fixed costs?

Select one:

a. Total variable costs and total fixed costs fluctuate.

b. Variable costs per unit are constant and fixed costs per unit fluctuate.

c. Total variable costs and total fixed costs are constant.

d. Variable costs per unit fluctuate and fixed costs per unit remain constant.

7.What will result from an increase in the activity level within the relevant range?

Select one:

a. A decrease in fixed cost per unit.

b. An unchanged fixed cost per unit.

c. A proportionate increase in total fixed costs.

d. An increase in fixed cost per unit.

8.The linear equation Y = a + bX is often used to express cost formulas. Which of the following representations in this equation is correct?

Select one:

a. The Y term represents total fixed costs.

b. The b term represents variable cost per unit of activity.

c. The X term represents total costs.

d. The a term represents variable cost in total.

9.The following data pertain to activity and costs for two months:

June July

Activity level in units 10,000 20,000

Variable costs $20,000 ?

Fixed costs 15,000 ?

Mixed costs 10,000 ?

Total costs $45,000 $70,000

Assuming that these activity levels are within the relevant range, what were the mixed costs for July?

Select one:

a. $35,000.

b. $40,000.

c. $10,000.

d. $15,000.

10.A company has sales of $87,500 at the break-even point and fixed costs are $35,000. Assuming cost behaviour does not change if sales increase by $20,000 how much will operating income will increase by?

Select one:

a. $12,000.00.

b. $20,000.00.

c. $4,000.00.

d. $8,000.00.

11.When interpreting a CVP graph which of the following is NOT correct?

Select one:

a. The total revenue line starts at the origin.

b. The anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total expense line.

c. When sales are below the breakeven intersection the company incurs a loss.

d. The breakeven point is where the total revenue line meets the fixed cost line.

12.The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?

Select one:

a. 240%.

b. 80%.

c. 300%.

d. 125%.

13.The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B. At the beginning of the year, the company made the following estimates:

Department A Department B

Direct labour cost$30,000 $40,000

Manufacturing overhead$60,000 $50,000

Direct labour hours6,000 8,000

Machine hours 2,000 10,000

What predetermined overhead rates would be used in Departments A and B, respectively?

Select one:

a. 50% and $8.00.

b. 110% and $15.00.

c. 50% and $5.00.

d. 200% and $5.00.

14.Simplex Company has the following estimated costs for next year:

Direct materials $15,000

Direct labour 55,000

Sales commissions 75,000

Salary of production supervisor 35,000

Indirect materials 5,000

Advertising expenses 11,000

Rent on factory equipment16,000

Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, what will be the overhead rate per hour?

Select one:

a. $7.63.

b. $8.56.

c. $3.50.

d. $6.94.

15.Which of the following statements refers to management accounting information?

Select one:

a. There are no regulations governing the reports

b. It primarily measures and records business transactions

c. The reports are generally delayed and historical

d. The reports are audited so they can be used in confidence by potential investors

16.Which one of the following is a variable cost for an insurance company?

Select one:

a. sales commissions

b. rent

c. property taxes

d. amortization of office equipment

17.Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

Select one:

a. Batch-level activities.

b. Organization-sustaining activities.

c. Product-level activities.

d. Unit-level activities.

18.Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

Select one:

a. Unit-level activity.

b. Customer-level activity.

c. Batch-level activity.

d. Organization-sustaining activity.

19.Which of the following is NOT a limitation of activity-based costing?

Select one:

a. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.

b. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.

c. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.

d. More accurate product costs may result in increasing the selling prices of some products.

20.Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:

Activity Cost Pool Est. Cost Product A Product B Total

Activity 1 $22,000 400 100 500

Activity 2 16,240 380 200 580

Activity 3 14,600 500 250 750

The activity rate under the activity-based costing system for Activity 3 is closest to which of the following?

Select one:

a. $19.47.

b. $28.87.

c. $70.45.

d. $58.40.