accounts-Variable costs,as activity increases, will:
Question1
Variable costs,as activity increases, will:
Question 1 options:
increase in total. | |
increase in total and remain constant per unit. | |
increase per unit. | |
remain constant per unit. |
Question 2
A cost thatincreases in total, but not proportionately with increases in the activitylevel, is a(n):
Question 2 options:
fixed cost. | |
variable cost. | |
mixed cost. | |
variable cost with an unusual behavior pattern. |
Question 3
The assumptionsthat underlie basic CVP analysis include all of the following except:
Question 3 options:
the behavior of both costs and revenues is linear throughout the relevant range. | |
All of three of the other choices are assumptions. | |
all costs can be classified as variable or fixed with reasonable accuracy. | |
when more than one product is sold, total sales will be in a constant sales mix. |
Question 4
Jameson Companydesires net income of $1,100,000 when it has $2,500,000 of fixed costs andvariable costs of 60% of sales. Required sales equals:
Question 4 options:
$9,000,000. | |
$6,000,000. | |
$6,250,000. | |
$2,750,000. |
Question5
A company'sbreak-even point can be decreased by decreasing:
Question 5 options:
the selling price. | |
variable costs per unit. | |
the contribution margin ratio. | |
the contribution margin. |
Question 6
Sutton Companyproduced 98,000 units in 46,000 direct labor hours. Production for the periodwas estimated at 100,000 units and 50,000 direct labor hours. A flexible budgetwould compare budgeted costs and actual costs, respectively, at:
Question 6 options:
50,000 hours and 46,000 hours. | |
49,000 hours and 46,000 hours. | |
46,000 hours and 46,000 hours. | |
49,000 hours and 50,000 hours. |
Question 7
A flexiblebudget:
Question 7 options:
is, in essence, a series of static budgets at different levels of activity. | |
can be prepared for each of the types of budgets included in a master budget. | |
increases budget allowances both directly and proportionately for variable costs as production increases. | |
All three of the other choices are correct. |
Question 8
Theinitial budget prepared in the master budget is the:
Question 8 options:
budgeted income statement. | |
budgeted balance sheet. | |
production budget. | |
sales budget. |
Question 9
Which of thefollowing is true with regard to budgeting vs. long-range planning?
Question 9 options:
Budgeting is oriented more toward short-term goals; long-range planning toward long-term goals. | |
Both tend to be very detailed. | |
They are the same in all significant aspects. | |
The maximum length for both usually is a year, with shorter periods of time also common. |
Question 10
Which of thefollowing is false with regard to budgetary planning?
Question 10 options:
Budgets may be used by manufacturing companies, merchandising companies, service enterprises, and not-for-profit organizations. | |
The starting point for the budgets of a not-for-profit organization is generally receipts, rather than expenditures. | |
A merchandising company uses a purchases budget instead of a production budget. | |
For a service enterprise, the critical factor in budgeting is coordinating professional staff needs with anticipated services. |
Question 11
Which of thefollowing is true with regard to budgetary planning?
Question 11 options:
The cash budget is often considered to be the most important output in preparing financial budgets. | |
Generally accepted accounting principles require the budgets be prepared at least annually. | |
The likelihood of a realistic budget is greater when the budget is developed from top management down to lower management. | |
The human behavior aspects of budgeting, while they should not be ignored, are generally of little real significance. |
Question 12
A staticbudget is:
Question 12 options:
applicable to cost budgets but not to a sales budget. | |
appropriate in evaluating a manager's effectiveness in controlling variable costs. | |
modified or adjusted for changes in activity during the year. | |
appropriate in evaluating a manager's effectiveness in controlling fixed costs. |
Question13
The potentialbenefit that may be obtained by following an alternative course of action istermed a(n):
Question 13 options:
opportunity cost. | |
sunk cost. | |
incremental cost. | |
avoidable cost. |
Question 14
An order at aspecial price that is accepted will increase income if the revenue receivedexceeds the:
Question 14 options:
variable manufacturing costs associated with the order. | |
variable manufacturing, selling, and administrative costs associated with the order. | |
fixed and variable costs associated with the order. | |
incremental costs associated with the order. |
Question 15
MediaUnlimited makes custom office desks. It can sell semi-finished desks for $800.Costs incurred to this point total $500. It can finish the desks at anadditional cost of $200 and increase the selling price to $1,100. MediaUnlimited should:
Question 15 options:
finish the desks since it will increase profits $100 per desk. | |
sell the desks unfinished since finishing the desks will reduce profits. | |
finish the desks since it will increase profits $600 per desk. | |
finish the desks since it will increase profits $300 per desk. |
Question16
Given thefollowing costs for Harper Company, classify each cost as variable, fixed, ormixed.
Total cost at | ||
4,000 units | 6,000 units | |
Cost A | $12,300 | $16,650 |
Cost B | 17,200 | 25,800 |
Cost C | 13,000 | 13,000 |
Question 16 options:
Cost A and Cost B are variable; Cost C is fixed. | |
Cost A is variable; Cost B is mixed; Cost C is fixed. | |
Cost A and Cost B are mixed; Cost C is fixed. | |
Cost A is mixed; Cost B is variable; Cost C is fixed. |
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Solution: accounts-Variable costs,as activity increases, will: