Question 1

As sales volume decreases in the relevant range,fixed costs per unit ________,but total fixed costs ________.

Accepted Answer

A) increase; do not change 
B) decrease: do not change 
C) do not change; increase 
D) do not change; decrease 
A) increase; do not change 
B) decrease: do not change 
C) do not change; increase 
D) do not change; decrease

Question 2

Mercy Hospital has total variable costs of 80% of total revenues and fixed costs of $20 million per year.There are 70,000 estimated patient-days for next year.What is the break-even point expressed in total revenue?

Accepted Answer

A) $10 million 
B) $12.5 million 
C) $20 million 
D) $100 million 
A) $10 million 
B) $12.5 million 
C) $20 million 
D) $100 million

Question 3

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the cost of the seats?

Accepted Answer

A) number of seats installed 
B) number of labor hours used for installation 
C) number of mechanic hours 
D) number of engineering hours 
A) number of seats installed 
B) number of labor hours used for installation 
C) number of mechanic hours 
D) number of engineering hours

Question 4

The break-even point may be reduced by reducing total fixed costs and holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 5

Oakes Corporation sells desks at $480 per desk.The variable costs are $372 per desk.Total fixed costs for the period are $456,840.The break-even point in desks is ________.

Accepted Answer

A) 952 
B) 1,228 
C) 4,230 
D) 5,458 
A) 952 
B) 1,228 
C) 4,230 
D) 5,458

Question 6

The CVP graph shows profit and loss at different rates of activity.

Accepted Answer

A) True 
 B)False

Question 7

In highly leveraged companies,small changes in sales volume result in large changes in net income.

Accepted Answer

A) True 
 B)False

Question 8

The break-even point is the level of sales at which revenue equals fixed costs.

Accepted Answer

A) True 
 B)False

Question 9

What happens when the cost-driver activity level decreases within the relevant range?

Accepted Answer

A) total fixed costs increase 
B) fixed costs per unit decrease 
C) total variable costs decrease 
D) variable costs per unit decrease 
A) total fixed costs increase 
B) fixed costs per unit decrease 
C) total variable costs decrease 
D) variable costs per unit decrease

Question 10

As the sales volume increases in the relevant range,variable costs per unit ________ but total variable costs ________.

Accepted Answer

A) do not change; increase 
B) do not change; decrease 
C) increase; do not change 
D) decrease; do not change 
A) do not change; increase 
B) do not change; decrease 
C) increase; do not change 
D) decrease; do not change

Question 11

Which of the following cost drivers would NOT be appropriate for the customer services activity of the value chain?

Accepted Answer

A) number of service calls 
B) hours spent servicing products 
C) number of engineering hours by research and development staff 
D) number of service call workers 
A) number of service calls 
B) hours spent servicing products 
C) number of engineering hours by research and development staff 
D) number of service call workers

Question 12

Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.Average daily room rents are $50 per room,and average variable costs are $10 for each room rented.It operates 365 days per year.What is the break-even point in number of rooms rented?

Accepted Answer

A) 24,000 
B) 30,000 
C) 100,000 
D) 120,000 
A) 24,000 
B) 30,000 
C) 100,000 
D) 120,000

Question 13

Gokey Company has a contribution-margin ratio of 0.30.Targeted net income is $76,800 and targeted sales volume in dollars is $480,000.What are total fixed costs?

Accepted Answer

A) $23,000 
B) $44,160 
C) $67,200 
D) $144,000 
A) $23,000 
B) $44,160 
C) $67,200 
D) $144,000

Question 14

To control costs,managers should focus their efforts on managing ________.

Accepted Answer

A) products or services 
B) revenues from products or services 
C) activities required to make,sell and deliver products or services 
D) production costs of products or services 
A) products or services 
B) revenues from products or services 
C) activities required to make,sell and deliver products or services 
D) production costs of products or services

Question 15

Variable costs ________.

Accepted Answer

A) vary per unit 
B) are fixed in total 
C) decrease in total as the cost-driver activity level increases 
D) are fixed per unit and vary in total 
A) vary per unit 
B) are fixed in total 
C) decrease in total as the cost-driver activity level increases 
D) are fixed per unit and vary in total

Question 16

________ is the relative proportions or combinations of quantities of different products that comprise total sales.

Accepted Answer

A) Sales mix 
B) Constant mix 
C) Fluctuating mix 
D) Variable cost ratio 
A) Sales mix 
B) Constant mix 
C) Fluctuating mix 
D) Variable cost ratio

Question 17

The profitability of a given product guides managers when deciding which product to emphasize in a sales mix.

Accepted Answer

A) True 
 B)False

Question 18

Nearly all companies sell more than one product,and thus,they must be concerned with sales mix.

Accepted Answer

A) True 
 B)False

Question 19

________ is the excess of sales over the cost of goods sold.

Accepted Answer

A) Gross margin 
B) Contribution-margin ratio 
C) Variable-cost ratio 
D) Contribution margin 
A) Gross margin 
B) Contribution-margin ratio 
C) Variable-cost ratio 
D) Contribution margin

Question 20

If the proportions of different products in a sales mix change,the ________.

Accepted Answer

A) contribution margin per unit for each product increases 
B) break-even point will change 
C) contribution margin per unit for each product decreases 
D) net income will not change 
A) contribution margin per unit for each product increases 
B) break-even point will change 
C) contribution margin per unit for each product decreases 
D) net income will not change

As sales volume decreases in the relevant range,fixed costs per unit ,but total fixed costs .

Mercy Hospital has total variable costs of 80% of total revenues and fixed costs of $20 million per year.There are 70,000 estimated patient-days for next year.What is the break-even point expressed in total revenue?

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the cost of the seats?

The break-even point may be reduced by reducing total fixed costs and holding everything else constant.

Oakes Corporation sells desks at $480 per desk.The variable costs are $372 per desk.Total fixed costs for the period are $456,840.The break-even point in desks is ________.

The CVP graph shows profit and loss at different rates of activity.

In highly leveraged companies,small changes in sales volume result in large changes in net income.

The break-even point is the level of sales at which revenue equals fixed costs.

What happens when the cost-driver activity level decreases within the relevant range?

As the sales volume increases in the relevant range,variable costs per unit but total variable costs .

Which of the following cost drivers would NOT be appropriate for the customer services activity of the value chain?

Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.Average daily room rents are $50 per room,and average variable costs are $10 for each room rented.It operates 365 days per year.What is the break-even point in number of rooms rented?

Gokey Company has a contribution-margin ratio of 0.30.Targeted net income is $76,800 and targeted sales volume in dollars is $480,000.What are total fixed costs?

To control costs,managers should focus their efforts on managing ________.

Variable costs ________.

________ is the relative proportions or combinations of quantities of different products that comprise total sales.

The profitability of a given product guides managers when deciding which product to emphasize in a sales mix.

Nearly all companies sell more than one product,and thus,they must be concerned with sales mix.

________ is the excess of sales over the cost of goods sold.

If the proportions of different products in a sales mix change,the ________.

Managerial Accounting, the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 2: Introduction to Cost Behavior and Cost-Volume Relationships

As sales volume decreases in the relevant range,fixed costs per unit ________,but total fixed costs ________.

Mercy Hospital has total variable costs of 80% of total revenues and fixed costs of $20 million per year.There are 70,000 estimated patient-days for next year.What is the break-even point expressed in total revenue?

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the cost of the seats?

The break-even point may be reduced by reducing total fixed costs and holding everything else constant.

Oakes Corporation sells desks at $480 per desk.The variable costs are $372 per desk.Total fixed costs for the period are $456,840.The break-even point in desks is ________.

The CVP graph shows profit and loss at different rates of activity.

In highly leveraged companies,small changes in sales volume result in large changes in net income.

The break-even point is the level of sales at which revenue equals fixed costs.

What happens when the cost-driver activity level decreases within the relevant range?

As the sales volume increases in the relevant range,variable costs per unit ________ but total variable costs ________.

Which of the following cost drivers would NOT be appropriate for the customer services activity of the value chain?

Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.Average daily room rents are $50 per room,and average variable costs are $10 for each room rented.It operates 365 days per year.What is the break-even point in number of rooms rented?

Gokey Company has a contribution-margin ratio of 0.30.Targeted net income is $76,800 and targeted sales volume in dollars is $480,000.What are total fixed costs?

To control costs,managers should focus their efforts on managing ________.

Variable costs ________.

________ is the relative proportions or combinations of quantities of different products that comprise total sales.

The profitability of a given product guides managers when deciding which product to emphasize in a sales mix.

Nearly all companies sell more than one product,and thus,they must be concerned with sales mix.

________ is the excess of sales over the cost of goods sold.

If the proportions of different products in a sales mix change,the ________.

Managerial Accounting, the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

As sales volume decreases in the relevant range,fixed costs per unit ,but total fixed costs .

As the sales volume increases in the relevant range,variable costs per unit but total variable costs .