Reflection Quiz 4

1. Which of the following functions is best described as choosing among available alternatives?

A. Decision making

B. Planning

C. Directing operational activities

D. Controlling

2. Which of the following managerial functions involves a detailed financial and operational description of anticipated operations?

A. Decision making

B. Planning

C. Directing operational activities

D. Controlling

3. Managerial accounting ___.

A. focuses only on historical data

B. is governed by GAAP

C. focuses primarily on the needs of personnel within the organization

D. provides information for parties external to the organization

4. Which of the following statements represents a similarity between financial and managerial accounting?

A. Both are useful in providing information for external users.

B. Both are governed by GAAP.

C. Both draw upon data from an organization's accounting system.

D. Both rely heavily on published financial statements

5. Product costs are ___.

A. expensed when incurred

B. inventoried

C. treated in the same manner as period costs

D. treated in the same manner as advertising costs

6. Which of the following is a product cost?

A. Glass in an automobile

B. Rent on factory

C. The salary of the vice president-finance

D. Both A and B

7. Which of the following is a period cost?

A. Direct material

B. Advertising expense

C. Depreciation on cars driven by a firm's president and treasurer

D. Both B and C

8. Depreciation of factory equipment would be classified as ___.

A. operating cost

B. "other" cost

C. manufacturing overhead

D. depreciation expense

9. Total costs are $120,000 when 10,000 units are produced; of this amount, variable costs are $48,000. What are the total costs when 12,000 units are produced?

A. $57,600

B. $72,000

C. $120,000

D. $129,600

10. Which of the following costs changes in direct proportion to a change in the activity level?

A. Variable cost

B. Fixed cost

C. Semi-variable cost

D. Step-variable cost

11. The break-even point is that level of activity where ___.

A. total revenue equals total cost

B. variable cost equals fixed cost

C. total contribution margin equals the sum of variable cost plus fixed cost

D. sales revenue equals total variable cost

12. A company that desires to lower its break-even point should strive to ___.

A. decrease selling prices

B. reduce variable costs

C. increase fixed costs

D. sell more units

13. Strand has a break-even point of 120,000 units. If the firm's sole product sells for $40 and fixed costs total $480,000, the variable cost per unit must be ____.

A. $4

B. $36

C. $44

D. an amount that cannot be derived based on the information presented

14. Ribco Co makes and sells only one product. The unit contribution margin is $6 and the break-even point in unit sales is 24,000. The company's fixed costs are ___.

A. $4,000

B. $14,400

C. $40,000

D. $144,000

15. The contribution-margin ratio is ___.

A. the difference between the selling price and the variable cost per unit

B. fixed cost per unit divided by variable cost per unit

C. variable cost per unit divided by the selling price

D. unit contribution margin divided by the selling price