1.Fixed manufacturing overhead is included in product costs under: A. Option A B. Option B C. Option C D. Option D

2. When will both the Absorption Costing Method and the Variable Costing Method yield the same net operating income? A. When inventory sold is higher than inventory produced. B. When inventory sold is lower than inventory produced. C. When inventory sold is equal to inventory produced.

D. There will never be a time when net income will be the same.

3. The difference between total sales in dollars and total variable expenses is called: A. net operating income. B. net profit. C. the gross margin. D. the contribution margin

4. Which of the following formulas is used to calculate the contribution margin ratio? A. (Sales - Fixed expenses) ? Sales B. (Sales - Cost of goods sold) ? Sales C. (Sales - Variable expenses) ? Sales D. (Sales - Total expenses) ? Sales

5. The break-even point in unit sales is found by dividing total fixed expenses by: A. the contribution margin ratio. B. the variable expenses per unit. C. the sales price per unit. D. the contribution margin per unit

Menlove Company had the following income statement for the most recent year: Sales (17,000units)..$357,000

Variable Expenses 255,000

Contribution Margin $102,000

Fixed Expenses68,000

Net Operating Income.$ 34,000 6. Given this data, the unit contribution margin was: A. $2 per unit B. $15 per unit C. $6 per unit D. $4 per unit

7. Given this data, the breakeven point in units is closest to: A. 20,000 units B. 11,334 units C. 15,000units D. 16,334 units

Dimitrov Corporation, a company that produces and sells a single product, has provided its contribution format income statement for July. Sales (7,000units).....$315,000

Variable Expenses 175,000

Contribution Margin $140,000

Fixed Expenses 103,500

Net Operating Income... $ 36,500 8. If the company sells 6,900 units, its net operating income should be closest to: A. $35,979 B. $34,500 C. $36,500 D. $32,000

9. Manufacturing overhead consists of: A. all manufacturing costs. B. indirect materials but not indirect labor. C. all manufacturing costs, except direct materials and direct labor. D. indirect labor but not indirect materials.

10. Conversion cost consists of which of the following? A. Manufacturing overhead cost. B. Direct materials and direct labor cost. C. Direct labor cost. D. Direct labor and manufacturing overhead cost.

11. Each of the following would be a period cost except: A. the salary of the company president's secretary. B. the cost of a general accounting office. C. depreciation of a machine used in manufacturing. D. sales commissions.

12. Which of the following costs is an example of a period rather than a product cost? A. Depreciation on production equipment. B. Wages of salespersons. C. Wages of production machine operators. D. Insurance on production equipment.

13. Variable cost: A. increases on a per unit basis as the number of units produced increases. B. remains constant on a per unit basis as the number of units produced increases. C. remains the same in total as production increases. D. decreases on a per unit basis as the number of units produced increases.

14. The primary reason that companies prepare budgets is to

A. reprimand their employees for not meeting deadline and spending too much money

B. to plan for the future and communicate managements plans throughout the organization

C. see what is popular in the industry

D. the calculate bonus payments

15. When applying for a loan, which financial statements would a financial institution request?

A. Balance Sheet, Trial Balance and Income Statement

B. Balance Sheet, Income Statement, Cash Flow Statement

C. Balance Sheet, Statement of Retained Earnings and Trial Balance

D. Balance Sheet, Cash Slow Statement and Expense Analysis

16. The Cash Flow Statement of a company

A. Explains how cash was generated and used during a period

B. Explains expenses and revenue for the period

C. Tells upper management if they are doing a good job

D. Proves the company has money to spend

17. Financing Activities are

A. activities that generate cash inflows and outflows related to revenue and expense transactions that affect net income

B. activities that generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the companys owners, such as selling or repurchasing shares of common stock and paying dividends.

C. not important to daily operations of a business

D. must be watched closely on a daily basis

18. Capital budgeting decisions

A. should only be made over lunch meetings in the later part of the year

B. is the process of deciding how much the company can spend on daily supplies

C. is the process of planning significant investments in projects that have long-term implications such as the purchase of new equipment or the introduction of a new product

D. is the process of planning the purchase of bulk quantities of merchandise to resell in your store front

19. In order to fully understand a budget variance,

A. it is necessary to pay all outstanding invoices

B. it is necessary to analyze both quantity and price variances together

C. it is necessary to collect all outstanding accounts receivable

D. it is necessary to use a calculator

20. Overhead that is calculated at the beginning of the year using budgeted numbers is called a/an

A. Actual Overhead Rate

B. Overhead Activity Rate

C. Predetermined Overhead Rate

D. We never calculate overhead at the beginning of the year