1. When interpreting a CVP graph which of the following is NOT correct?

Select one:

a. The breakeven point is where the total revenue line meets the fixed cost line.

b. When sales are below the breakeven intersection the company incurs a loss.

c. The total revenue line starts at the origin.

d. The anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total expense line.

2 The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?

Select one:

a. 80%.

b. 125%.

c. 300%.

d. 240%.

3)Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

Select one:

a. Batch-level activities.

b. Organization-sustaining activities.

c. Unit-level activities.

d. Product-level activities.

4)Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

Select one:

a. Batch-level activity.

b. Unit-level activity.

c. Customer-level activity.

d. Organization-sustaining activity.

5) Which of the following is NOT a limitation of activity-based costing?

Select one:

a. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.

b. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.

c. More accurate product costs may result in increasing the selling prices of some products.

d. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.

6) Burger Bob's Boathouse sells only one product. 7,000 units were sold In year resulting in $70,000 of sales revenue. Variable costs were $28,000 for the year, and fixed costs were $12,000. Break-even point in volume is:

Select one:

a. 3,000 units

b. 7,000 units

c. 2,797 units

d. 2,000 units