Flag question: Question 1

Question 12 pts

If there is a decrease in ending inventory from one month to the next then:

Group of answer choices

Production > Sales

Absorption Costing Profit > Variable Costing Profit

Absorption Costing Profit < Variable Costing Profit

Production = Sales

Flag question: Question 2

Question 22 pts

Weighted Average Unit Contribution Margin can be calculated by adding together the:

Group of answer choices

Unit Contribution Margin * Sales mix in Units for each product

Unit Contribution Margin * Sales Mix in Dollars for each product

Contribution Margin Ratio * Sales Mix in Dollars for each product

Contribution Margin Ratio * Sales mix in Units for each product

Flag question: Question 3

Question 32 pts

The three components of product costs are:

Group of answer choices

direct material, supervisor salaries, selling expenses.

direct labor, manufacturing overhead, indirect material.

direct material, direct labor, manufacturing overhead.

manufacturing overhead, indirect material, indirect labor.

Flag question: Question 4

Question 42 pts

The contribution margin format income statement is organized by:

Group of answer choices

cost behavior classifications.

sales territories.

functional classifications.

responsibility centers.

Flag question: Question 5

Question 52 pts

In the short run, capacity costs are:

Group of answer choices

Fixed

Controllable

Relevant

Variable

Flag question: Question 6

Question 62 pts

As operating leverage increases, the margin of safety will:

Group of answer choices

decrease

increase

stay the same

double

Flag question: Question 7

Question 72 pts

In what ways can we refine cost allocations to make them more useful for decision making?

Group of answer choices

More cost pools

Fewer hierarchy levels of cost drivers

direct labor cost as the denominator

budgeted levels of cost drivers rather than full capacity

Flag question: Question 8

Question 82 pts

If the selling price per unit were to drop by $2, from $100 to $98, the sales volume were to increase by 500 units to 4,500 units per month, and advertising expense were to increase by $1,000, then:

Group of answer choices

the break-even point would increase.

the break-even point would decrease.

the contribution margin ratio would increase.

operating income would decrease.

Flag question: Question 9

Question 92 pts

A firm has revenues of $100,000, a contribution margin ratio of 40%, and fixed expenses that total $25,000. If revenues increase by $20,000, then:

Group of answer choices

operating income will increase by $8000.

operating income will be 0.

fixed expenses will increase $8000.

the contribution margin ratio will increase by 40%

Flag question: Question 10

Question 102 pts

ABC, Inc. produces a product that has a variable cost of $10.00 per unit. The company's fixed costs are $95,000. The product is sold for $15.00 per unit and the company desires to earn a target profit of $150,000. What is the dollar amount of sales that will be necessary to earn the desired profit?

Group of answer choices

$49,000

$735,000

$100,000

$285,000

Flag question: Question 11

Question 112 pts

When demand exceeds capacity:

Group of answer choices

opportunity cost of capacity is the contribution from the demand not filled

opportunity cost is zero

opportunity cost = demand

opportunity cost is negative (benefit)

Flag question: Question 12

Question 122 pts

Model, Inc. produces a product with a $60 per unit variable cost and an $160 per unit sales price. Fixed manufacturing overhead costs are $250,000. The firm has a one-time opportunity to sell an additional 1,000 units at $90 each that would not affect its current sales. Assuming that the company has sufficient capacity to produce the additional units, how would acceptance of the special order affect net income?

Group of answer choices

Increase net income by $30,000

Increase net income by $100,000

Not change net income

Decrease net income by $30,000

Flag question: Question 13

Question 132 pts

Consider the following information: in 20xx, raw materials used totaled $64,750; direct labor amounted to $198,400; manufacturing overhead was computed to be $394,800; Work-in-Process Inventory on January 1, 20xx was $189,100; and Work-in-Process Inventory on December 31, 20xx was $197,600. What was cost of goods manufactured in 20xx?

Group of answer choices

$649,450

$847,050

$666,450

$855,550

Flag question: Question 14

Question 142 pts

The contribution margin ratio always decreases when the:

Group of answer choices

breakeven point decreases

fixed expenses increase

selling price increases and the variable costs remain constant

variable cost increase and the selling price remains constant

Flag question: Question 15

Question 152 pts

If Sales volume decreases by 10% and OL2 (Contribtuion Margin/(Contribution Margin - Fixed Cost) = 2.5 then Operating income would decrease by :

Group of answer choices

25%

10%

Not possible to determine from information given

Not change

Flag question: Question 16

Question 162 pts

Where in the financial statements will the difference between costs of goods manufactured and cost of goods sold be classified?

Group of answer choices

Work in Process (WIP)

Finished Goods

Cost of Goods Sold

Raw Material

Flag question: Question 17

Question 172 pts

An activity-based costing system involves identifying the activity that causes the incurrence of a cost; this activity is known as a:

Group of answer choices

cost driver

cost applier

direct cost

cost object

Flag question: Question 18

Question 182 pts

The decision to continue or discontinue a segment of the business should focus on:

Group of answer choices

sales minus total variable expenses and total fixed expenses.

sales minus total variable expenses and avoidable fixed expenses of the segment

sales minus total variable expenses and allocated fixed expenses of the business.

none of the above.

Flag question: Question 19

Question 192 pts

XYZ Company produces three products: A, B, and C. Product A has a contribution margin of $20 and requires 1 hour of machine time. Product B has a contribution margin of $30 and requires 2 hours of machine time. Product C has a contribution margin of $36 and requires 1.5 hours of machine time. If machine hours are considered scarce, in what product mix order should XYZ Company schedule the production of Products A, B, and C for the available machine hours?

Group of answer choices

First A, then B, then C.

First C, then A, then B.

First C, then B, then A.

First B, then C, then A.

Flag question: Question 20

Question 206 pts

Casey Corporation provides you with the following data:

	Ryan Construction	Wilson Builders	Cost per activity unit
Sales	$500,000	$500,000
Contribution Margin Ratio	30%	25%
Volume-related costs			$0.21 per sales $
Number of orders	50	20	$450 per order
Number of deliveries	150	40	$100 per delivery

Casey further informs you that their ABC system has identified three primary cost pools (1) the volume of sales; (2) the number of orders, and (3) the number of deliveries --- as the cost drivers when allocating indirect costs to determine customer profitability. Required: Calculate the profit earned from Ryan Construction and from Wilson Builders . Which one is more profitable?

Flag question: Question 21

Question 214 pts

Greenland Sports, Inc. has been asked to submit a bid to the National Hockey League on supplying 1,000 pairs of professional quality skates. The cost per pair of skates has been determined as follows:

Direct Materials	$80
Direct Labor	60
Variable overhead	30
Fixed overhead (allocated)	20

Other non-manufacturing costs associated with each pair of skates are:

Variable selling cost (commission)	$25
Fixed selling and administrative cost	10

Assume the commission on the sale of skates to the National Hockey League would be reduced to $15 per pair and that available production capacity exists to produce the 1,000 pairs of skates. The lowest price the firm can bid is some price greater than:

Group of answer choices

$185

$190

$215

$225

Flag question: Question 22

Question 225 pts

Fountain Company uses activity-based costing (ABC) for allocating manufacturing overhead costs to jobs and it has established the following cost drivers and rates:

Activity	Cost Driver	Rate
Material Handling	Number of parts used	$5.00 per part
Machine Setups	Number of production runs	$2,000 per run
Assembly and inspection	Number of direct labor hours	$25 per DLH
Quality Control	Number o units inspected	$4.00 per unit

During April, Job #7598 produced 2,500 units and required the following activity: 1,200 parts, 2 production runs, and 225 direct labor hours. Calculate the amount of manufacturing overhead applied to Job #7598.