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Cost volume profit analysis is used to set all of the following except A. maximizing use of production facilities B. determining product mix C. selling

  1. Cost volume profit analysis is used to set all of the following except

    A.

    maximizing use of production facilities

    B.

    determining product mix

    C.

    selling price

    D.

    equivalent units of production

QUESTION 14

  1. The mathematical equation for target net income is

    A.

    Sales minus variable costs plus fixed costs

    B.

    Sales plus variable costs minus fixed costs

    C.

    Sales plus variable costs plus fixed costs

    D.

    Sales minus variable costs minus fixed costs

QUESTION 15

  1. ABC Company sells 100,000 ties for $12 per unit. Net income is $200,000. Fixed costs are $300,000. What should be reported as variable expenses in the CVP income statement?

    A.

    $500,000

    B.

    $600,000

    C.

    $700,000

    D.

    $800,000

QUESTION 16

  1. Sunk costs are:

    A.

    Not relevant costs

    B.

    Always equal to $1,000,000

    C.

    opportunity costs

    D.

    Relevant costs

QUESTION 17

  1. In making a decision to sell or process further

    A.

    you should always process further

    B.

    You should never process further

    C.

    You should process further as long as the incremental revenue from such processing exceeds the incremental processing costs

    D.

    You should always sell

QUESTION 18

  1. A segment of ABC Company has the following data:

    Fixed expenses $200,00

    Variable expenses $280,000

    Sales $400,000

    If this segment is eliminated, what would be the effect on the remaining company? Assuming that 50% of the fixed expenses would be eliminated, and the rest would be allocated to the remaining segments of the company.

    A.

    $10,000 increase

    B.

    $80,000 increase

    C.

    $10,000 decrease

    D.

    $120,000 increase

QUESTION 19

  1. A budget

    A.

    must be for a one year period of time

    B.

    can be prepared for any period of time

    C.

    must be prepared by the president of the company

    D.

    must be prepared monthly

QUESTION 20

  1. The master budget contains all of the following except

    A.

    a balanced score card

    B.

    direct labor budget

    C.

    cash budget

    D.

    sales budget

QUESTION 21

  1. The budget for a merchandiser differs from a budget for a manufacturer because

    A.

    the manufacturing budgets are not applicable to a merchandiser

    B.

    both A and B above

    C.

    a merchandise purchases budget replaces the production budget

    D.

    None of the above

QUESTION 22

  1. Direct materials inventories are kept in pounds in ABC Company and the total pounds of direct materials needed for production is 5,500. If the beginning inventory is 2,000 lbs and the desired ending inventory is 3,300 lbs, the total pounds to be purchased is

    A.

    7,800

    B.

    0

    C.

    6,800

    D.

    5,800

QUESTION 23

  1. The formula for computing the direct labor budget is to multiply the direct labor cost per hour by the

    A.

    all the above are correct

    B.

    physical units to be produced

    C.

    total required direct labor hours

    D.

    equivalent units of production

QUESTION 24

  1. The sales budget is

    A.

    an estimate of the quantity and cost of direct materials to be purchased

    B.

    a projection of financial position at the end of the budget period

    C.

    an estimate of expected sales revenue at the end of the budget period

    D.

    a projection of anticipated cash flows

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