The account analysis method is subjective in that different managers viewing the same set of facts may reach different conclusions regarding which costs are fixed and which costs are variable. (Points: 2) True False 2. Firms that have high operating leverage tend to avoid large fluctuations in profit when sales fluctuate. (Points: 2) True False 3. When there is a constraint on how many units can be produced, the focus shifts from contribution margin per unit to contribution margin per unit of the constraint. (Points: 2) True False 4. The president of Jackson Corporation will not receive a bonus next year unless the companys profits are at least $435,000. Jackson sells a single product at a price of $27 per unit. If variable costs are $12 per unit and fixed costs total $150,000, what amount of sales must Jackson generate in order for the president to receive a bonus? (Points: 2) 48,750 units 39,000 units 29,000 units 21,167 units 5. Verna Trotteria Inc. makes a product that sell for $50 per unit and has $38 per unit in variable costs. Annual fixed costs are $12,000. Verna Trotteria expects to sell 2,000 units this year. How much would profits increase if 100 more units are sold than expected? (Points: 2) $5,000 $3,800 $600 $1,200 6. Full costing (Points: 2) is the same as absorption costing. considers fixed manufacturing overhead as part of the cost of inventory. often does not provide the information needed for C-V-P analysis. All of the above choices are correct. 7. The Cider Company experienced the following costs in 2011: During the year the company manufactured 47,000 units and sold 40,000 units. How much is the average unit product cost using full costing? (Points: 2) $7.70 $9.70 $8.85 $10.85 8. If a company employs JIT inventory techniques, which statement is true? (Points: 2) Variable and full costing income will differ little since there is almost no inventory. Variable and full costing income will differ little since there is almost no fixed cost. Variable and full costing income will differ greatly little since there is much inventory. Variable and full costing income will differ greatly since there are high levels of fixed costs. 9. T-Shirt Man is a direct marketer of popular t-shirts. Following is information about its revenue and cost structure: Assume 400,000 t-shirts are produced and 350,000 are sold in 2011. What is income under full costing? (Points: 2) $975,000 $1,400,000 $850,000 $2,250,000 10. Jamba Company makes ceramic mugs and has the following costs for 2010, 2011, and 2012: What is variable costing inventory cost per unit be for 2010, 2011, and 2012, respectively? (Points: 2) $2.20; $2.20; $2.20 $2.60; $2.60; $2.60 $5.80; $5.20; $6.20 $5.68; $5.68; $5.68