A characteristic of managerial accounting would include: (Points : 3) being based on historical financial information. following GAAP. foregoing accuracy for timeliness. being designed to report information to external users. 2. (TCO 3) Just-in-time (JIT) methods of production are designed to: (Points : 3) increase sales. reduce operating expenses. reduce inventories. increase product quality. 3. (TCO 3) The Coyote Cafe had sales revenues and food costs in 2007 of $800,000 and $600,000, respectively. In 2008, Coyote will be introducing a new menu item that will generate $100,000 in sales revenues and $45,000 in food costs. Assuming no changes are expected for the other food items, the differential revenue for 2008 is: (Points : 3) $55,000. $900,000. $100,000. $645,000. 4. (TCO 1) The terms direct cost and indirect cost are commonly used in accounting. A particular cost might be considered a direct cost of a manufacturing department, but an indirect cost of the product produced in the manufacturing department. Classifying a cost as either direct or indirect depends upon: (Points : 3) whether an expenditure is unavoidable because it cannot be changed, regardless of any action taken. whether the cost is expensed in the period in which it is incurred. the behavior of the cost in response to volume changes. the cost object to which the cost is being related. 5. (TCO 1) Which of the following is NOT a product cost under full absorption costing? (Points : 3) Salaries of CEOs Raw materials used in production Supplies used in the factory Direct labor 6. (TCO 1) Calculate the conversion costs from the following information: Fixed manufacturing overhead $2,000 Variable manufacturing overhead 1,500 Direct materials 4,000 Direct labor 3,000 (Points : 3) $4,000 $7,000 $9,000 $6,500 7. (TCO 1) The excess of sales over the cost of merchandise sold is termed: (Points : 3) the net income. the contribution margin. the operating profit. the gross margin. 8. (TCO 6) Western Sales has the following information concerning its one and only product: Selling price per unit: $40 Variable cost per unit: $15 Total fixed costs: $250,000 How many units must Western Sales sell in order to make a profit of $100,000? (Points : 3) 10,000 units 10,400 units 14,000 units 20,000 units 9. (TCO 6) When the sales volume equals total costs and there is zero profit or loss, this is termed: (Points : 3) the contribution margin. the break-even point. the margin of safety. the profit-volume model. 10. (TCO 6) The following information pertains to Klyne Company: Sales: $500,000 Variable costs: $100,000 Fixed costs: $30,000 What is Klyne's total contribution margin? (Points : 3) $400,000 $370,000 $130,000 $500,000