answer the following
1. Which of the following factors does not directly affect profit? a. Quantity sold b. Sales price 0. Price control d. Fixed and variable costs 6. None of these 2. The relevant range of volume is most applicable to a. Standard costs b. Variable costs o. Fixed costs d. Total costs 6. None of the above 3. Cost-volume-prot (CVP) analysis is a key factor in many decisions including choice of product lines, pricing of products, marketing strategy, and use of productive facilities. A calculation used in a CVP analysis is breakeven point. Once the breakeven point has been reached, operating income will increase by the a. Gross margin per unit for each additional unit sold b. Contribution margin per unit for each additional unit sold o. Fixed costs per unit for each additional unit sold d. Variable costs per unit for each additional unit sold 4. In working on a CVP analysis, the accountant is unsure of the exact results and/or assumptions under which to operate. What can the accountant do to help management in this CVP decision? a. Nothing. It is not the responsibility of the accountant to be concerned with the ambiguity of the results and/or assumptions b. Ascertain the probabilities of various outcomes and work with management on understanding those probabilities in reference to the CVP decision c. Calculate the probabilities of various outcomes and make the decision for management. d. Use a random number table to generate a decision model and make the decision for management 4. In working on a CVP analysis, the accountant is unsure of the exact results and/or assumptions under which to operate. What can the accountant do to help management in this CVP decision? 21. Nothing. It is not the responsibility of the accountant to be concerned with the ambiguity of the results and/or assumptions b. Ascertain the probabilities of various outcomes and work with management on understanding those probabilities in reference to the CVP decision 0. Calculate the probabilities of various outcomes and make the decision for management. d. Use a random number table to generate a decision model and make the decision for management 5. The margin of safety is a key concept of CVP analysis. The margin of safety is a. The contribution margin rate b. The difference between budgeted contribution margin and breakeven contribution margin 0. The difference between budgeted sales and breakeven sales d. The difference between the breakeven point in sales and cash ow breakeven 6. One of the major assumptions limiting the reliability of breakeven analysis is that a. Efciency and productivity will continually increase. b. Total variable costs will remain unchanged over the relevant range. c. Total fixed cost will remain unchanged over the relevant range. d. The cost of production factors varies with changes in technology. 7. When used in cost-volume-prot analysis, sensitivity analysis a. Determine the most profitable mix of products to be sold b. Allows the decision maker to introduce probabilities in the evaluation of decision alternative C. Is done through various possible scenarios and computes the impact or prot of various predictions of future events d. is limited because in cost-volume prot analysis, costs are not separated into fixed and variable '7. When used in cost-volume-prot analysis, sensitivity analysis a. Determine the most protable mix of products to be sold b. Allows the decision maker to introduce probabilities in the evaluation of decision alternative C. Is done through various possible scenarios and computes the impact or prot of various predictions of future events d. Is limited because in cost-volume prot analysis, costs are not separated into fixed and variable component . If xed costs decrease while variable costs per unit remain constant, the new contribution margin in relation to the old contribution margin will be a. Unchanged b. Higher c. Lower d. Indeterminate 6. None of these Under variable costing, xed manufacturing overhead is: a. Immediately charged against sales as a period cost b. Carried in a liability account c. Carried in an asset account d. Ignored 10. WE Company computes net income under both the absorption costing approach and the variable costing approach. For a given year, the absorption costing net income was greater than the variable costing net income. This fact suggests that: a. Variable manufacturing cots we were less than xed manufacturing costs. b. More units were produced during the year than were sold (3. More units were sold during the year than were produced d. Common costs were greater than variable costs for the year
