Question 1

It is common to find that a small number of customers generate a high percentage of operating income.

Accepted Answer

A) True 
 B)False

Question 2

Use the information below to answer the following question(s).
John's Video Game Outlet encounters revenue-allocation decisions with its bundled product sales.Here,two or more of the video games are sold as a single package.Managers at John's are keenly interested in individual product-profitability figures.Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
  The unit manufacturing costs are $3.60,$4.00,and $5.00 for games A,B,and C,respectively.
-Calculate the revenue allocation for Game A in Package 1,using physical units as the base.

Accepted Answer

A) $12.57 
B) $14.67 
C) $20.84 
D) $22.00 
E) $23.16

Question 3

In general,distribution-channel costs are more easily influenced by customer actions than customer batch-level costs.

Accepted Answer

A) True 
 B)False

Question 4

A composite unit is a hypothetical unit with weights based on the mix of individual units.

Accepted Answer

A) True 
 B)False

Question 5

Big Products sells only one product.Last year it sold 22,000 items when the budget was 16,000 items.The increased sales were due in part to reduced selling prices averaging $52.The budgeted selling price was $60.Total variable costs were budgeted at $144,000.
Required:
Compute the contribution margin sales-volume variance.Why doesn't the contribution sales volume variance equal the difference between budgeted and actual revenue?

Accepted Answer

The answer of Big Products sells only one product.Last year...

Question 6

A bundled product is a package of two or more products or services,sold for a single price,where the individual components of the bundle may also be sold as separate items,each with their own stand-alone prices.

Accepted Answer

A) True 
 B)False

Question 7

Lynnwood Ltd.is reviewing two of its customers using ABC analysis.It has identified the following customer related activities and their rates:
  
The company has the following information regarding Enbright Ltd.and Jackson Inc.:
  
Sales for Enbright and Jackson are $280,000 and $148,000 respectively.The cost of goods sold on these sales are the same at 52%.
Required:
Using Customer ABC Analysis,analyze the relative profitability of Enbright and Jackson.

Accepted Answer

The answer of Lynnwood Ltd.is reviewing two of its customers...

Question 8

Top management and general administration costs would MOST likely be classified as a

Accepted Answer

A) customer output unit-level cost. 
B) customer batch-level cost. 
C) customer-sustaining cost. 
D) corporate-sustaining cost. 
E) distribution-channel cost.

Question 9

The cost of visiting customers is an example of a customer output unit-level cost.

Accepted Answer

A) True 
 B)False

Question 10

Answer the following question(s)using the information below:
Zorro Company manufactures remote control devices for garage doors.The following information was collected during June:
 
-What is the Zorro Company market-size variance?

Accepted Answer

A) $500 U 
B) $1,500 U 
C) $1,600 F 
D) $1,000 F 
E) $1,500 F

Question 11

A favorable total sales-mix variance arises when the actual sales-mix percentage for the higher contribution margin products is less than the budgeted sales-mix percentage.

Accepted Answer

A) True 
 B)False

Question 12

Use the information below to answer the following question(s).
Teddy Bear Company sold a total of 30,000 stuffed tigers and lions.During August the following information was gathered:
 
-What is the Teddy Bear Company total sales-mix variance?

Accepted Answer

A) $21,600 favourable 
B) $13,750 favourable 
C) $13,750 unfavourable 
D) $4,500 unfavourable 
E) $4,500 favourable

Exam 16: Revenue and Customer Profitability Analysis

It is common to find that a small number of customers generate a high percentage of operating income.

In general,distribution-channel costs are more easily influenced by customer actions than customer batch-level costs.

A composite unit is a hypothetical unit with weights based on the mix of individual units.

A bundled product is a package of two or more products or services,sold for a single price,where the individual components of the bundle may also be sold as separate items,each with their own stand-alone prices.

Top management and general administration costs would MOST likely be classified as a

The cost of visiting customers is an example of a customer output unit-level cost.

Answer the following question(s) using the information below: Zorro Company manufactures remote control devices for garage doors.The following information was collected during June: -What is the Zorro Company market-size variance?

A favorable total sales-mix variance arises when the actual sales-mix percentage for the higher contribution margin products is less than the budgeted sales-mix percentage.

Use the information below to answer the following question(s) . Teddy Bear Company sold a total of 30,000 stuffed tigers and lions.During August the following information was gathered: -What is the Teddy Bear Company total sales-mix variance?