Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

60. On a break-even chart, the break-even point is located at the point where the total A) revenue line crossed the total xed cost line

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
60. On a break-even chart, the break-even point is located at the point where the total A) revenue line crossed the total xed cost line B) revenue line crosses the total contribution margin line C) xed cost line intersects the total variable cost line. D) revenue line crosses the total cost line. 61. In a CVP graph, the slope of the total revenue line indicates the A) rate at which prot changes as volume changes B) rate at which the contribution margin changes as volume changes C ration of increase of total fixed costs. ) D) total costs per unit. 62. If a company's fixed costs were to increase, the effect on a profit-volume graph would be that the A) contribution margin line would shift upward parallel to the present line. B) contribution margin line would shift downward parallel to the present line C) slope of the contribution margin line would be more pronounced (steeper). D) slope of the contribution margin line would be less pronounced (flatter) 63. If a company's variable costs per unit were to increase but its unit selling price stays constant, the effect on a prot-volume graph would be that the A) contribution margin line would shift upward parallel to the present line. B) contribution margin line would shift downward parallel to the present line. C) slope of the contribution margin line would be pronounce (steeper). D) slope of the contribution margin line would be less pronounced (flatter). 64. If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in A) higher income and assets B) higher income but lower assets C) lower income but higher assets D) lower income and assets. 65. Under absorption costing, if sales remain constant from period 1 to period 2, the company will report a larger income in period 2 when A) period 2 production exceeds period 1 production B) period 1 production exceeds period 2 production. C) variable production costs are larger in period 2 than period 1. D) fixed production costs are larger in period 2 than period 1. 66. What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing? A) Absorption costing considers all costs in the determination of net earnings, whereas variable costing considers xed costs to be period costs. B) Absorption costing allocates fixed overhead costs between cost of goods sold and inventories, variable costing considers all fixed costs to be period costs. C) Absorption costing "inventories\" all direct costs, but variable costing considers direct costs to be period costs. D) Absorption costing \"inventories\" all fixed costs for the period in ending finished goods inventory, but variable costing expenses all xed costs. 67. A basic tenet of variable costing is that period costs should be currently expensed. What is the rationale behind this procedure? A) Period costs are uncontrollable and should not be charged to a specific product. B) Period costs are generally immaterial in amount and the cost assigning the amount to specific products would outweigh the benefits. C) allocation of period costs is arbitrary at best and could lead to erroneous decision by management. D) Because period costs will occur whether productions occurs, it is improper to allocate these costs to production and defer a current cost of doing business. Use the following to answer questions 68-71: Giron Corporation produces a single product. The following cost structure applied to its first year of operations: Variable costs: SG&A Php 2 per unit Production Php 4 per unit Fixed costs (total cost incurred for the year): SG&A Php 14,000 Production Php 20,000 68. Assume for this question only that during the current year Giron Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Giron Corporation's income be if it uses absorption rather than variable costing? A) The absorption costing income would be Php6,000 larger. B) The absorption costing income would be Php6,000 smaller. C) The absorption costing income would be Php4,800 larger. D) the absorption costing income would be Pgp4,000 smaller. 69. Assume for this question only that Giron Corporation manufactured and sold 5,000 units in the current year. At this level of activity it had an income of Php30,000 using variable costing. What was the sales price per unit? A) Php 16.00 B) Php 18.80 C) Php12.80 D) Php14.80 70. Assume for this question only that Giron Corporation produced 5,000 units and sold 4,500 units in the current year. If Giron uses absorption costing, it would deduct period costs of A) Php24,000 B) Php34,000 C) Php27,000 D) Php23,000.71. Assume for this question only that Giron Corporation manufactured 5,000 units and sold 4,000 in the current year. If Giron employs a costing system based on variable costs, the company would end the current year with a finished goods inventory of A) Php4,000 B) Php8,000 C) Php6,000 D) Php5,000 72.A change in the discount rate used to evaluate a specific project will affect the project's A) life B) payback period C) net present value D) total cash flows. 73. If a project's profitability index is less than 1, the project's A) discount rate is above its cost of capital B) internal rate of return is less than zero C) payback period is infinite D) net present value is negative. 74. If the discount rate that is used to evaluate a project is equal to the project's internal rate of return, the project's is zero A) profitability index B) internal rate of return C) present value of the investment D) net present value.Use the following to answer questions 75-71: Evita Company, a reseller of women's fashions, has budgeted its activity for March. The budget information is presented below: Sales are Php550,000. All sales are cash. Merchandise inventory on February 28 is Php300,000 II. Budgeted depreciation for March is Php35,000. V. Cash in bank on March 1 is hpP25,000. V. Selling and administrative expenses are budgeted at Php60,000 for March and are paid in cash. VI. The planned merchandise inventory on March 31 is Php270,000. VII The invoice cost for merchandise purchases represents 75% of sales price. All purchases are paid for in cash. 75. The budgeted cash receipts for March are: A) Php412,500 B) Php137,500 C) Php585,000 D) Php550,000. 76. The budgeted cash disbursements for March are: A) Php382,500 B) Php442,500 C) Php472,500 D) Php477,500 77. The budgeted net income for December is: A) Php 107,500 B) Php 137,500 C) Php42,500 D) Php77,500 78. Which of the following is not a characteristic of relevant costing information? It is A) associated with the decision under B) significant to the decision maker C) readily quantifiable D) related to a future endeavor. 79. Relevant costs are A) all fixed and variable costs B) all costs that would be incurred within the relevant range of production. C) past costs that are expected to be different in the future D) anticipated future costs that will differ among various alternatives.80. If a cost is irrelevant to a decision, the cost could not be A) a sunk cost B) a future cost C) a variable cost D) an incremental cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Core Concepts Financial Analysis

Authors: Gary Giroux

1st Edition

047146712X, 9780471467120

More Books

Students also viewed these Accounting questions

Question

Who monitors the top management of public U.S. corporations?

Answered: 1 week ago

Question

The number of people commenting on the statement

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago