Question 1

Kelley Business Machines provided the following manufacturing costs for the month of March.
 
From the above information,calculate Kelley's total variable costs.

Accepted Answer

A) $323,700 
B) $225,000 
C) $243,800 
D) $230,500 
A) $323,700 
B) $225,000 
C) $243,800 
D) $230,500

Question 2

Identify the breakeven point in the graph given below.

Accepted Answer

A) O 
B) E 
C) D 
D) B 
A) O 
B) E 
C) D 
D) B

Question 3

Swanson,Inc.has collected the following data.(There are no beginning inventories. )
 
What is the ending balance in Finished Goods Inventory using absorption costing if 400 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. )

Accepted Answer

A) $7,329 
B) $17,400 
C) $31,929 
D) $24,729 
A) $7,329 
B) $17,400 
C) $31,929 
D) $24,729

Question 4

A company's proportion of fixed costs to variable costs is called its ________.

Accepted Answer

A) target profit 
B) relevant range 
C) mixed cost 
D) cost structure 
A) target profit 
B) relevant range 
C) mixed cost 
D) cost structure

Question 5

Gloria's Bakery sells three large muffins for every two small ones.A small muffin sells for $6 with a variable cost of $2.A large muffin sells for $8 with a variable cost of $2.50.What is the weighted-average contribution margin? (Round your intermediate calculations to one decimal place. )

Accepted Answer

A) $4.00 per muffin 
B) $4.75 per muffin 
C) $5.50 per muffin 
D) $4.90 per muffin 
A) $4.00 per muffin 
B) $4.75 per muffin 
C) $5.50 per muffin 
D) $4.90 per muffin

Question 6

A contribution margin income statement classifies costs by function;that is,costs are classified as either product costs or period costs.

Accepted Answer

A) True 
 B)False

Question 7

Heung,Inc.reports the following information for the year ended December 31:
 
The operating income calculated using variable costing and absorption costing amounted to $9,000 and $10,800,respectively.There were no beginning inventories.Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year 2016.

Accepted Answer

A) $13,000 
B) $11,200 
C) $27,440 
D) $28,000 
A) $13,000 
B) $11,200 
C) $27,440 
D) $28,000

Question 8

Morrell Company's Model A generator sells for $569,and Model B sells for $499.The variable cost of Model A is $514 and of Model B is $416.If Morrell sells more of Model B than Model A,it will generate lower revenues,but higher net income.

Accepted Answer

A) True 
 B)False

Question 9

When more units are sold than produced,operating income is higher under absorption costing.

Accepted Answer

A) True 
 B)False

Question 10

Dessa,Inc.reports the following information for the year ended December 31:
 
The beginning Finished Goods Inventory costs were $3,600 under absorption costing and $2,700 under variable costing.
What is the operating income using variable costing?

Accepted Answer

A) $41,280 
B) $42,500 
C) $11,780 
D) $4,280 
A) $41,280 
B) $42,500 
C) $11,780 
D) $4,280

Question 11

Rickman,Inc.reports the following information:
 
There are no beginning inventories.What is the ending balance in Finished Goods Inventory using variable costing?

Accepted Answer

A) $9,880 
B) $7,410 
C) $10,640 
D) $15,237 
A) $9,880 
B) $7,410 
C) $10,640 
D) $15,237

Question 12

When the total fixed costs decreases,the breakeven point ________.

Accepted Answer

A) increases 
B) decreases 
C) remains the same 
D) increases proportionately 
A) increases 
B) decreases 
C) remains the same 
D) increases proportionately

Question 13

Period costs under the variable costing method include ________.

Accepted Answer

A) variable manufacturing overhead 
B) variable selling and administrative costs 
C) direct materials 
D) direct labor 
A) variable manufacturing overhead 
B) variable selling and administrative costs 
C) direct materials 
D) direct labor

Question 14

The Button-Down Custom Co.sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 30%.What is the variable cost per shirt?

Accepted Answer

A) $28.00 per shirt 
B) $52.00 per shirt 
C) $40 per shirt 
D) $70.00 per shirt 
A) $28.00 per shirt 
B) $52.00 per shirt 
C) $40 per shirt 
D) $70.00 per shirt

Question 15

Zot-Ice Corp.has provided the following data for the current year.
   
Calculate the unit product cost using absorption costing and variable costing.

Accepted Answer

@#IMG-DLM& 
Fixed ma

Question 16

Neptune Company sold 4,000 units in November at a price of $35 per unit.The variable cost is $22 per unit.The monthly fixed costs are $10,000.What is the operating income earned in November?

Accepted Answer

A) $52,000 
B) $140,000 
C) $42,000 
D) $88,000 
A) $52,000 
B) $140,000 
C) $42,000 
D) $88,000

Question 17

Which of the following will lower the breakeven point?

Accepted Answer

A) a decrease in the sales price per unit 
B) an increase in total fixed costs 
C) an increase in the variable costs per unit 
D) an increase in the sales price per unit 
A) a decrease in the sales price per unit 
B) an increase in total fixed costs 
C) an increase in the variable costs per unit 
D) an increase in the sales price per unit

Question 18

When there are no beginning or ending balances in Finished Goods Inventory,variable and absorption costing will result in ________.

Accepted Answer

A) different amounts for ending Finished Goods Inventory 
B) the same operating income 
C) different sales revenue 
D) different amounts for cost of goods sold 
A) different amounts for ending Finished Goods Inventory 
B) the same operating income 
C) different sales revenue 
D) different amounts for cost of goods sold

Question 19

From the graph given below,identify the fixed costs line.

Accepted Answer

A) OB 
B) AC 
C) AD 
D) AE 
A) OB 
B) AC 
C) AD 
D) AE

Question 20

Flexlux,Inc.reports the following information:
 
What is the unit product cost using variable costing?

Accepted Answer

A) $85 
B) $61 
C) $65 
D) $95 
A) $85 
B) $61 
C) $65 
D) $95

Exam 21: Cost-Volume-Profit Analysis

Kelley Business Machines provided the following manufacturing costs for the month of March. From the above information,calculate Kelley's total variable costs.

Identify the breakeven point in the graph given below.

Swanson,Inc.has collected the following data.(There are no beginning inventories. ) What is the ending balance in Finished Goods Inventory using absorption costing if 400 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. )

A company's proportion of fixed costs to variable costs is called its ________.

Gloria's Bakery sells three large muffins for every two small ones.A small muffin sells for $6 with a variable cost of $2.A large muffin sells for $8 with a variable cost of $2.50.What is the weighted-average contribution margin? (Round your intermediate calculations to one decimal place. )

A contribution margin income statement classifies costs by function;that is,costs are classified as either product costs or period costs.

Morrell Company's Model A generator sells for $569,and Model B sells for $499.The variable cost of Model A is $514 and of Model B is $416.If Morrell sells more of Model B than Model A,it will generate lower revenues,but higher net income.

When more units are sold than produced,operating income is higher under absorption costing.

Dessa,Inc.reports the following information for the year ended December 31: The beginning Finished Goods Inventory costs were $3,600 under absorption costing and $2,700 under variable costing. What is the operating income using variable costing?

Rickman,Inc.reports the following information: There are no beginning inventories.What is the ending balance in Finished Goods Inventory using variable costing?

When the total fixed costs decreases,the breakeven point ________.

Period costs under the variable costing method include ________.

The Button-Down Custom Co.sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 30%.What is the variable cost per shirt?

Zot-Ice Corp.has provided the following data for the current year. Calculate the unit product cost using absorption costing and variable costing.

Neptune Company sold 4,000 units in November at a price of $35 per unit.The variable cost is $22 per unit.The monthly fixed costs are $10,000.What is the operating income earned in November?

Which of the following will lower the breakeven point?

When there are no beginning or ending balances in Finished Goods Inventory,variable and absorption costing will result in ________.

From the graph given below,identify the fixed costs line.

Flexlux,Inc.reports the following information: What is the unit product cost using variable costing?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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