QUESTION 41

Net Operating Income + Fixed Costs = Contribution Margin

True

False

1 points

QUESTION 42

If fixed costs increase in a business, if everything else remains the same, the breakeven point in dollars or sales increases.

True

False

1 points

QUESTION 43

If sales volume, but nothing else, changes, then the Contribution Margin Ratio remains unchanged.

True

False

1 points

QUESTION 44

At the breakeven point Sales - Variable Expenses = Fixed Expenses.

True

False

1 points

QUESTION 45

If an unprofitable segment is eliminated from a business, the common fixed costs will usually decrease.

True

False

1 points

QUESTION 46

Eliminating one segment or product may reduce sales of another segment or product within a company.

True

False

1 points

QUESTION 47

Eliminating one segment or product may reduce sales of another segment or product within a company.

True

False

1 points

QUESTION 48

Absorption Costing can be used for external reports but Variable Costing, which is preferred for internal decision making, cannot be used for external reports.

True

False

1 points

QUESTION 49

The cash budget contains the number of units produced for the period.

True

False

1 points

QUESTION 50

An opportunity cost of upgrading manufacturing equipment is that the money spent for upgrades could have been spent on advertising or employee training instead.

True

False

1 points

QUESTION 51

Standard product costs show the actual material, labor, and overhead costs for one unit of output rather than the budgeted or expected costs for one unit of output.

True

False

1 points

QUESTION 52

In a profitable business sales price increases 10% and variable costs/unit also increase 10%, the net effect on the Contribution Margin is no change.

True

False

1 points

QUESTION 53

For a given product, if the Contribution Margin lost is greater than the Fixed Costs saved or avoided, then the product should likely be dropped.

True

False

1 points

QUESTION 54

The numeric result of any relevant cost analysis should be reviewed in light of other factors not as easily quantified.

True

False

1 points

QUESTION 55

Even though the Purchasing Manager is not directly responsible for the Materials Quantity Variance or the Labor Efficiency Variance, the actions of the Purchasing Manager can affect these variances.

True

False

1 points

QUESTION 56

A by-product can become a joint product if customer demand for the byproduct increases.

True

False

1 points

QUESTION 57

Fixed costs that are unchanged, regardless of which course of action is chosen are irrelevant in an accounting sense.

True

False

1 points

QUESTION 58

The opportunity cost of taking this test is the myriad of other pleasant activities you might have engaged in.

True

False

1 points

QUESTION 59

Back to multiple choice: Which of the following represents ways in which managerial accounting examines costs?

	Product and period costs are distinguished.
	Fixed and variable costs are distinguished.
	Direct costs such as materials and labor are distinguished from indirect costs, which are overhead.
	Relevant and irrelevant costs are distinguished.
	all of the above.

2 points

QUESTION 60

Understanding costs is important

	to reduce costs and increase profit.
	for financial analysis and decision making.
	to pass this course.
	all of the above.
	none of the above.