Contribution margin is calculated as

a.

sales minus cost of goods sold

b.

sales minus total variable and fixed costs

c.

sales minus total variable manufacturing costs

d.

sales minus total variable manufacturing costs and total fixed manufacturing costs

e.

Some other formula not listed here

2

If a manufacturer overestimated the manufacturing overhead budget and underestimates the activity base for the year, what is the result?

a.

Over-applied factory overhead.

b.

Under-applied factory overhead.

c.

Overstated finished goods inventory.

d.

Understated work in process inventory.

e.

Cannot be determined by the information given.

3

A cash budget:

a.

Is appropriate for a business in any industry

b.

Shows expected cash receipts and planned payments.

c.

Shows expected sales and planned expenses.

d.

Is appropriate for a business in any industry & Shows expected cash receipts and planned payments

4

If the contribution margin ratio increases, the break-even point in sales dollars will

a.

Increase

b.

remains the same

c.

Double

d.

Some other effect not listed here

e.

Is appropriate for a business in any industry and Shows expected sales and planned expenses