Question 1

Contribution margin is the amount of revenues remaining after deducting cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 2

Cunningham Inc.sells MP3 players for $60 each.Variable costs are $40 per unit and fixed costs total $120000.How many MP3 players must Cunningham sell to earn net income of $280000?

Accepted Answer

A) 20000. 
B) 7000. 
C) 5000. 
D) 6000. 
A) 20000. 
B) 7000. 
C) 5000. 
D) 6000.

Question 3

Cost behavior analysis applies to

Accepted Answer

A) retailers. 
B) wholesalers. 
C) manufacturers. 
D) all entities. 
A) retailers. 
B) wholesalers. 
C) manufacturers. 
D) all entities.

Question 4

Contribution margin is

Accepted Answer

A) the amount of revenue remaining after deducting fixed costs. 
B) available to cover fixed costs and contribute to income for the company. 
C) sales less fixed costs. 
D) unit selling price less unit fixed costs. 
A) the amount of revenue remaining after deducting fixed costs. 
B) available to cover fixed costs and contribute to income for the company. 
C) sales less fixed costs. 
D) unit selling price less unit fixed costs.

Question 5

CVP analysis is not important in

Accepted Answer

A) calculating depreciation expense. 
B) setting selling prices. 
C) determining the product mix. 
D) utilizing production facilities. 
A) calculating depreciation expense. 
B) setting selling prices. 
C) determining the product mix. 
D) utilizing production facilities.

Question 6

Which is the true statement?

Accepted Answer

A) In a CVP income statement costs and expenses are classified only by function. 
B) The CVP income statement is prepared for both internal and external use. 
C) The CVP income statement shows contribution margin instead of gross profit. 
D) In a traditional income statement costs and expenses are classified as either variable or fixed. 
A) In a CVP income statement costs and expenses are classified only by function. 
B) The CVP income statement is prepared for both internal and external use. 
C) The CVP income statement shows contribution margin instead of gross profit. 
D) In a traditional income statement costs and expenses are classified as either variable or fixed.

Question 7

If a firm increases its activity level

Accepted Answer

A) costs should remain the same. 
B) most costs will rise. 
C) no costs will remain the same. 
D) some costs will change others will remain the same. 
A) costs should remain the same. 
B) most costs will rise. 
C) no costs will remain the same. 
D) some costs will change others will remain the same.

Question 8

Fixed costs are $3000000 and the unit contribution margin is $150.What is the break-even point?

Accepted Answer

A) $7500000 
B) $20000000 
C) 7500 units 
D) 20000 units 
A) $7500000 
B) $20000000 
C) 7500 units 
D) 20000 units

Question 9

A variable cost remains constant per unit at various levels of activity.

Accepted Answer

A) True 
 B)False

Question 10

Armstrong Industries has a contribution margin of $240000 and a contribution margin ratio of 30%.How much are total variable costs?

Accepted Answer

A) $72000 
B) $560000 
C) $168000 
D) $800000 
A) $72000 
B) $560000 
C) $168000 
D) $800000

Question 11

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in

Accepted Answer

A) both variable and fixed costs. 
B) fixed costs and a decrease in variable costs. 
C) variable costs and a decrease in fixed costs. 
D) variable costs and no change in fixed costs. 
A) both variable and fixed costs. 
B) fixed costs and a decrease in variable costs. 
C) variable costs and a decrease in fixed costs. 
D) variable costs and no change in fixed costs.

Question 12

At the break-even point

Accepted Answer

A) sales equal total variable costs. 
B) contribution margin equals total variable costs. 
C) contribution margin equals total fixed costs. 
D) sales equal total fixed costs. 
A) sales equal total variable costs. 
B) contribution margin equals total variable costs. 
C) contribution margin equals total fixed costs. 
D) sales equal total fixed costs.

Question 13

A CVP graph does not include a

Accepted Answer

A) variable cost line. 
B) fixed cost line. 
C) sales line. 
D) total cost line. 
A) variable cost line. 
B) fixed cost line. 
C) sales line. 
D) total cost line.

Question 14

Costs will not change in total within the relevant range of activity.

Accepted Answer

A) True 
 B)False

Question 15

Fixed costs normally will not include

Accepted Answer

A) property taxes. 
B) direct labor. 
C) supervisory salaries. 
D) depreciation on buildings and equipment. 
A) property taxes. 
B) direct labor. 
C) supervisory salaries. 
D) depreciation on buildings and equipment.

Question 16

The contribution margin ratio increases when

Accepted Answer

A) fixed costs increase. 
B) fixed costs decrease. 
C) variable costs as a percentage of sales decrease. 
D) variable costs as a percentage of sales increase. 
A) fixed costs increase. 
B) fixed costs decrease. 
C) variable costs as a percentage of sales decrease. 
D) variable costs as a percentage of sales increase.

Contribution margin is the amount of revenues remaining after deducting cost of goods sold.

Cunningham Inc.sells MP3 players for $60 each.Variable costs are $40 per unit and fixed costs total $120000.How many MP3 players must Cunningham sell to earn net income of $280000?

Cost behavior analysis applies to

Contribution margin is

CVP analysis is not important in

Which is the true statement?

If a firm increases its activity level

Fixed costs are $3000000 and the unit contribution margin is $150.What is the break-even point?

A variable cost remains constant per unit at various levels of activity.

Armstrong Industries has a contribution margin of $240000 and a contribution margin ratio of 30%.How much are total variable costs?

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in

At the break-even point

A CVP graph does not include a

Costs will not change in total within the relevant range of activity.

Fixed costs normally will not include

The contribution margin ratio increases when

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 12: Budgetary Planning

Contribution margin is the amount of revenues remaining after deducting cost of goods sold.

Cunningham Inc.sells MP3 players for $60 each.Variable costs are $40 per unit and fixed costs total $120000.How many MP3 players must Cunningham sell to earn net income of $280000?

Cost behavior analysis applies to

Contribution margin is

CVP analysis is not important in

Which is the true statement?

If a firm increases its activity level

Fixed costs are $3000000 and the unit contribution margin is $150.What is the break-even point?

A variable cost remains constant per unit at various levels of activity.

Armstrong Industries has a contribution margin of $240000 and a contribution margin ratio of 30%.How much are total variable costs?

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in

At the break-even point

A CVP graph does not include a

Costs will not change in total within the relevant range of activity.

Fixed costs normally will not include

The contribution margin ratio increases when

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters