ACC 201, Cost and Management Acco... 1. ABC FIRM manufactures and sells a single product. This product has the following operational data: Unit sales price.... $30 Variable manufacturing cost per unit... $17 Fixed manufacturing costs $72,000 Fixed selling costs $27,000 What amount of total revenue would be needed to meet an after-tax profit target of $80,000? (1 Point) $179,000 $416,279 $199,000 2. The contribution margin ratio is equal to (1 Point) 1 - (Gross Margin/Sales). 1 - (Contribution Margin/Sales). Total manufacturing expenses/Sales. (Sales - Variable expenses)/Sales. 1:07 0.00 4G11 50 f ACC 201, Cost and Management Acco... 3. The salary paid to the president of King Company would be classified on the income statement as a(n): (1 Point) manufacturing overhead cost. administrative expense. direct labor cost. selling expense. 7. The following information pertains to Nova Co.'s cost-volume-profit relationships: Breakeven point in units sold 1,000 Variable expenses per unit $500 Total fixed expenses $150,000 How much will be contributed to net operating income by the 1,001 st unit sold? (1 Point) $500 $150 $0 $650 8. Which of the following is NOT included under the head of FOH cost? (1 Point) Indirect Material Indirect Expense Direct labor Indirect Labor 0.41 $4611 KB/S ACC 201, Cost and Management Acco... 9. When the cost object is a unit produced, lubricating oil for production machines would be a(n) (1 Point) Indirect cost Direct cost Sunk cost Opportunity cost 4. Black Company's sales are $600,000, its fixed expenses are $150,000, and its variable expenses are 60% of sales. Based on this information, the margin of safety is: (1 Point) $240,000 $190,000 $90,000 $225,000 1:07 0:09 44.1 50 ACC 201, Cost and Management Acco... 5. Carver Company produces a product which sells for $40. Variable manufacturing costs are $18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 15% of the selling price is paid on each unit sold. The contribution margin per unit is: (1 Point) $16 $22 $7 $17 6. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses? (1 Point) Rs. 4,150 Rs. 1,250 Rs. 6,250 Rs. 3,750 13. The following costs were incurred in January Direct materials ..... $39,000 Direct labor .......... $26,000 Manufacturing overhead .... $21,000 Selling expenses .......... $14,000 Administrative expenses .... $27,000 Prime costs during the month totaled: (1 Point) $65,000 $127,000 $47,000 $86,000 10. ABC is a manufacturer of fans. During the year a new line called "Rapid Air was made available to customers. The break-even point for sales of "Rapid Air" is $200,000 with a contribution margin of 40%. Assuming that the profit for the "Rapid Air" line during the year amounted to $100,000, total sales during the year would have amounted to: (1 Point) $475,000 $450,000 $300,000 $420,000 1:08 0.00 49.1 50 { & ACC 201, Cost and Management Acco... 11. Which of the following terms is used to denote the response of a cost to the change in business activity? (1 Point) Cost response Cost trend Cost behavior Cost accumulation 12. Conversion cost = ? (1 Point) Direct materials cost + Manufacturing overhead cost Direct materials cost + Marketing cost Direct materials cost + Admin. cost Direct labor cost + Manufacturing overhead cost 14. Barnes Corporation expected to sell 150,000 games during the month of November. The following budgeted data are based on that level of sales: Revenue (150,000 games) $2,400,000 Variable expenses 1,425,000 Fixed manufacturing overhead expenses 250,000 Fixed selling & administrative expenses 500,000 Net operating income 225,000 Barnes' actual sales during November were 180,000 games. What should the actual net operating income during November have been? (1 Point) $270,000 $450,000 $510,000 $420,000 15. A cost that changes in total dollar amount 1:08 0.42 4.1 60 ACC 201, Cost and Management Acco... 15. A cost that changes in total dollar amount with the change in the level of activity is known as: (1 Point) conversion cost variable cost fixed cost mixed cost 16. Degree of operating leverage for ABC Corporation is 8. if there is a change of 1% in sales dollars at ABC corporation then it will generate an 8% change in: (1 Point) contribution margin. net operating income variable expenses. fixed expenses. 1:08 0.004911 50 KB/S { k ACC 201, Cost and Management Acco... 17. Indirect labor is a part of: (1 Point) Conversion cost. Nonmanufacturing cost Period cost. Prime cost. 18. ABC corporation reported the following record for June: Break even Sales $247,500 Current Sales $595,000 Total fixed costs 99,000 Total variable costs 357,000 What was its margin of safety, in dollars? (1 Point) $357,500 $347,500 none of the above $230,000 19. Prime cost = ? (1 Point) Manufacturing overhead cost + Direct labor cost Direct materials cost + Manufacturing overhead cost Direct materials cost + Direct labor cost Direct materials cost + Direct labor cost + Manufacturing overhead cost 20. Break-even analysis is also called? (1 Point) Business Analysis Cost-Volume-Profit analysis Unit sales 21. Variable expenses for Alpha Company are 40% of sales. What are sales at the breakeven point, assuming that fixed expenses total $150 nnn ner vear: 1:08 0.0046, 49 KB/S ACC 201, Cost and Management Acco... 21. Variable expenses for Alpha Company are 40% of sales. What are sales at the breakeven point, assuming that fixed expenses total $150,000 per year: (1 Point) $250,000 $150,000 $375,000 $600,000 22. A firm had beginning finished goods inventory of Rs. 25,000, ending finished goods inventory of Rs. 10,000 and cost of goods sold of Rs. 100,000. What was the cost of goods manufactured? (1 Point) Rs. 85,000 Rs. 75,000 Rs. 80,000 Rs. 65,000 1:08 0.09 -4411 09 ACC 201, Cost and Management Acco... 23. The amount by which an item contributes towards covering fixed cost and providing for profit is known as: (1 Point) net margin contribution margin gross profit gross margin 24. Which of the following costs is treated as indirect labor? (1 Point) All of the given Idle time Overtime premium Fringe benefits 25. If actual units produced are lower than the budgeted level of production which of the following types of cost would you expect to be lower than the budget? (1 Point) None Total fixed costs Total variable costs Variable costs per unit 26. Sales in East Company declined from $100,000 per year to $80,000 per year, while net operating income declined by 300 percent. Given these data, the company must have had an operating leverage of: (1 Point) 12 30 15 2.7 1:09 0:58 -46,1 49 KB/S ACC 201, Cost and Management Acco... 27. According to cost formula Y = Rs15,000 + Rs6x, total cost at an activity level of 8,000 units would be: (1 Point) 65,000 15,000 63,000 50,000 28. The break-even point can be defined as? (1 Point) The level of activity where variable costs are covered by sales revenue The level of activity at which there is neither profit nor loss The level of activity where profits equal fixed costs The level of activity where cash flow is zero 1:09 2:33 411 09 { K ACC 201, Cost and Management Acco... 29. A company has fixed costs of Rs. 50,000 and variable costs per unit of output of Rs. 8. If its sole product sells for Rs. 18, what is the break-even quantity of output? (1 Point) Rs. 5,000 Rs. 7,500 Rs. 2,500 Rs. 1,500 30. Sapphire manufactures textiles. Sapphire manufacturing costs last year included the following salaries and wages: Loom operators $70,000 Factory Security guard... $45,000 Factory Supervisor $30,000 What is the amount of direct labor included in this list? (1 Point) $100,000 $30,000 $45,000 $70,000 31. A cost that is easily traceable to a cost object is known as: (1 Point) variable cost fixed cost direct cost indirect cost 32. The following costs were incurred in January: Direct materials $33,000 Direct labor $28,000 Manufacturing overhead $69,000 Selling expenses $16,000 Administrative expenses $21,000 Conversion costs during the month totaled: (1 Point) $61,000 $97,000 $102,000 $167,000 1:09 KB/S 49.1 49 { K ACC 201, Cost and Management Acco... 33. To find the break-even in dollars, you have to divide the fixed cost by? (1 Point) Contribution Margin per unit Variable cost Contribution Margin Contribution Margin ratio 17/19 34. XYZ Company manufactures wooden rocking chairs. XYZ identified the following three material costs in its production process for July: $100,000 for springs for the rocking mechanism; two springs at a cost of $10 each are used in each chair; $50,000 for glue used as needed from one gallon containers; and $100,000 for stain used to touch up spots on the chairs. The total cost that should have been assigned to indirect material for July was: (1 Point) $150,000 $250,000 $50,000 $100,000 1:09 1.00 4G11 49 KB/S ACC 201, Cost and Management Acco... $150,000 $250,000 $50,000 $100,000 35. Cost classification can be done in (1 Point) several ways. two ways. three ways. four ways. 10 10