Kathleen Keller
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high school accounting II test on management accounting.

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Kathleen Keller
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Accounting II - Unit 6 Practice Test

Question 1 of 28

1

Fresh Food Market had an increase in net sales of 18.9%. Advertising expense increased by 9.3%. Which of the following is correct about the change in advertising expense?

Select one of the following:

  • Favorable change because the difference in the increase in net sales and the increase in advertising expense was less than 10%

  • Favorable change because the percentage increase in net sales was greater than the percentage increase in advertising expense

  • Normal change because advertising expense increased

  • Normal change because net sales increased and advertising expense increased

Explanation

Question 2 of 28

1

John wants to prepare reports that show estimates of income and expenses for the upcoming year. Which report would reflect estimates for rent expense?

Select one of the following:

  • Administrative expenses budget schedule

  • Purchases budget schedule

  • Sales budget schedule

  • Cost of goods sold budget schedule

Explanation

Question 3 of 28

1

Slugger Apparel had an increase in net sales of 7.9%. Cost of merchandise sold increased by 13.4%. Which of the following is correct about the change in cost of merchandise sold?

Select one of the following:

  • Favorable change because the difference in the increase in net sales and the increase in cost of merchandise sold was less than 1%

  • Favorable change because the percentage increase in net sales was less than the percentage increase in cost of merchandise sold

  • Normal change because net sales increased and cost of merchandise sold increased

  • Unfavorable change because the percentage increase in net sales was less than the cost of merchandise sold.

Explanation

Question 4 of 28

1

Mary wants to prepare reports that show estimates of income and expenses for the upcoming year. Which report would Mary need to complete FIRST?

Select one of the following:

  • Administrative expenses budget schedule

  • Purchases budget schedule

  • Sales budget schedule

  • Selling expenses budget schedule

Explanation

Question 5 of 28

1

Bill's Beverage has an increase in net sales of 9.3%. Rent expense increased by 7.5%. Which of the following is correct about the change in rent expense?

Select one of the following:

  • Favorable change because the difference in the increase in net sales and the increase in rent expense was less than 5%

  • Favorable change because the percentage increase in net sales was greater than the percentage increase in rent expense

  • Normal change because net sales increased and rent expense increased

  • Normal change because rent expense increased

Explanation

Question 6 of 28

1

Friendly Shoe Store projected cash of $5,000 for the period. Actual cash was $4,000. Which of the following could be the cause of the decrease in cash?

Select one of the following:

  • Actual cost of merchandise is less than budgeting cost of merchandise

  • Actual operating expenses are less than budgeted operating expenses

  • Customers are paying too quickly

  • Customers are not paying

Explanation

Question 7 of 28

1

Michelle wants to know her company's anticipated cash outflows for the upcoming year. Which schedule would give Michelle this information?

Select one of the following:

  • Budgeted income statement

  • Cash payments budget schedule

  • Cash receipts budget schedule

  • Sales budget schedule

Explanation

Question 8 of 28

1

Jane wants to compare actual income and expenses to budgeted income and expenses. Which of the following would provide the information Jane needs?

Select one of the following:

  • Balance Sheet

  • Budgeted income statement

  • Comparative income statement

  • Performance report

Explanation

Question 9 of 28

1

Tennis Town had an increase in net sales of 8.2%. Cost of merchandise sold increased by 13.4%. Which of the following is correct about the change in cost of merchandise sold?

Select one of the following:

  • Favorable change because cost of merchandise sold increased

  • Favorable change because the percentage increase in net sales was less than the percentage increase in cost of merchandise sold

  • Normal change because sales increased and cost of merchandise sold increased

  • Unfavorable change because percentage increase in sales was less than cost of merchandise sold

Explanation

Question 10 of 28

1

Tucker Manufacturing has total fixed costs of $125,000.00 and a contribution margin rate of 40%. The unit sale price is $125.00. How many units must be sold to break-even?

Select one of the following:

  • 1,000

  • 2,500

  • 20,000

  • 50,000

Explanation

Question 11 of 28

1

Wild Bill's Theme Park has total fixed costs $150,000.00 and a contribution margin rate of 25%. The unit sale price is $75.00. How many units must be sold to break-even?

Select one of the following:

  • 4,000

  • 5,000

  • 7,500

  • 8,000

Explanation

Question 12 of 28

1

Linda's Cosmetics has total fixed costs of $10,000.00. Units sell for $20.00 and have a variable cost of $15.00. To earn a planned net income of $8,000.00, how many units must be sold?

Select one of the following:

  • 720

  • 950

  • 1,200

  • 3,600

Explanation

Question 13 of 28

1

Carson Ski Shoppe is considering expanding its product line to include snowboards. Management projects that the snowboards would sell for $500.00 each. Variable costs are projected to be $100.00 per unit, with total fixed costs of $50,000.00 per month. How many units need to be sold each month to break-even?

Select one of the following:

  • 100

  • 125

  • 500

  • 1,000

Explanation

Question 14 of 28

1

Off Shore Boats sells water skis and jet skis. Their net sales are $400,000.00 (water skis= $320,000.00; jet skis= $80,000.00). Their contribution margin is $100,000.00 and total fixed costs are $50,000.00. Off Shore would like to improve its net income to $75,000.00. If the water skis sell for $1,000 each and the jet skis sell for $2,500 each, how many water skis and jet skis should they plan to purchase and sell?

Select one of the following:

  • 200 water skis and 50 jet skis

  • 400 water skis and 40 jet skis

  • 30 water skis and 20 jet skis

  • 400 water skis and 100 jet skis

Explanation

Question 15 of 28

1

Cooper's Gym has total fixed costs of $15,000.00. The unit sales at break-even point are 3,000. The unit sales price is $15.00. What is the contribution margin per unit?

Select one of the following:

  • $5.00

  • $5.75

  • $10.00

  • $15.00

Explanation

Question 16 of 28

1

Garrett's Gourmet Ice Creams ells ice cream and milkshakes. Garrett's net sales are $5,000.00 (Ice Cream=$3,000.00; Milkshakes=$2,000.00). Its contribution margin is $2,000.00, and total fixed costs are $2,500.00. Garrett would like to improve its net income to $700.00. If the ice cream sells for $6 each and the milkshakes sell for $4 each, how many ice creams and milkshakes should Garrett plan to purchase and sell?

Select one of the following:

  • 175 ice creams and 100 milkshakes

  • 150 ice creams and 200 milkshakes

  • 200 ice creams and 100 milkshakes

  • 800 ice creams and 800 milkshakes

Explanation

Question 17 of 28

1

David's Hair Products is considering expanding its product line to include hair dryers. Management projects that the hair dryers would sell for $30.00 each. Variable costs are projected to be $18.00 per unit, with total fixed costs $3,600.00 per month. If potential sales for the hair dryers are projected to be 150 units per month, should they expand its production line?

Select one of the following:

  • Yes. David will have a net income of $1,800.00 with the new product.

  • Yes. David will have a net income of $3,600.00 with the new product.

  • No. David will have a net loss of $1,800.00 with this new product.

  • No. David will have a net loss of $3,600.00 with the new product.

Explanation

Question 18 of 28

1

Green Fees Golf Store has total fixed costs of $12,000.00 and planned net income of $15,000.00. How many sales dollars are required to achieve a 20% contribution margin rate?

Select one of the following:

  • $40,000.00

  • $60,000.00

  • $75,000.00

  • $135,000.00

Explanation

Question 19 of 28

1

Michel's Craft Store has total fixed costs of $12,000.00 and planned net income of $8,000.00. How many sales dollars are required to achieve a 25% contribution margin rate?

Select one of the following:

  • $40,000.00

  • $80,000.00

  • $100,000.00

  • $120,000.00

Explanation

Question 20 of 28

1

Water Fun Park had total fixed costs of $75,000.00 and a contribution margin rate of 20%. The unit sale price is $75.00. How many units must be sold to break-even?

Select one of the following:

  • 4,000

  • 5,000

  • 20,000

  • 4,800

Explanation

Question 21 of 28

1

Russell Tie Shop has total fixed costs of $8,000.00. Units sell for $30.00 and have a variable cost of $10.00. To earn a planned net income of $10,000.00, how many units must be sold?

Select one of the following:

  • 600

  • 900

  • 1,000

  • 1,200

Explanation

Question 22 of 28

1

Carson Ski Shopped is considering expanding its product line to include snowboards. Management projects that the snowboards would sell for $500.00 each. Variable costs are projected to be $100.00 per unit, with total fixed costs of $50,000.00 per month. If potential sales for the snowboards are projected to be 100 units per month, should they expand its production line?

Select one of the following:

  • Yes. Carson will have a net income of $5,000.00 with the new product.

  • Yes. Carson will have a net income of $10,000.00 with the new product.

  • No, Carson will have a net loss of $5,000.00 with the new product.

  • No. Carson will have a net loss of $10,000.00 with the new product.

Explanation

Question 23 of 28

1

Garrett's Gourmet Ice Cream has total fixed costs of $9,000.00 and planned net income of $6,000.00. How many sales dollars are required to achieve a 15% contribution margin rate?

Select one of the following:

  • $40,000.00

  • $60,000.00

  • $100,000.00

  • $120,000.00

Explanation

Question 24 of 28

1

David's Hair Products is considering expanding its product line to include hair dryers. Management projects that the hair dryers would sell for $30.00 each. Variable costs are projected to be $18.00 per unit, with total fixed costs of $3,600.00 per month. How many units need to be sold each month to break-even?

Select one of the following:

  • 120

  • 300

  • 450

  • 600

Explanation

Question 25 of 28

1

Ryan Sporting Goods has total fixed costs of $36,000.00 and a contribution margin rate of 20%. The unit sale price is $9.00. How many units must be sold to break-even?

Select one of the following:

  • 4,000

  • 7,200

  • 20,000

  • 64,800

Explanation

Question 26 of 28

1

Cooper Electronics sells televisions and DVD players. Cooper's net sales are $75,000.00 (TVs=$52,500.00; DVD players=$22,500.00). Its contribution margin is $30,000.00, and total fixed costs are $24,000.00. Cooper would like to improve its net income to $10,000.00. If the televisions sell for $350 each and the DVD players sell for $250 each, how many televisions and DVD player should Cooper plan to purchase and sell?

Select one of the following:

  • 170 televisions and 102 DVD players

  • 102 televisions and 170 DVD players

  • 200 televisions and 100 DVD players

  • 100 televisions and 200 DVD players

Explanation

Question 27 of 28

1

Budget Motorsports is considering expanding its product line to include motorcycles. Management projects that the motorcycles would sell for $10,000.00 each. Variable costs are projected to be $6,000.00 per unit, with total fixed costs of $200,000 per month. How many units need to be sold each month to break-even?

Select one of the following:

  • 50

  • 100

  • 200

  • 500

Explanation

Question 28 of 28

1

Budget Motorsports is considering expanding its product line to include motorcycles. Management projects that the motorcycles would sell for $10,000.00 each. Variable costs are projected to be $6,000.00 per unit, with total fixed costs of $200,000.00 per month. If potential sales for the motorcycles are projected to be 80 units per month, should they expand its production line?

Select one of the following:

  • Yes. Budget will have a net income of $48,000.00 with the new product

  • Yes. Budget will have a net income of $120,000.00 with the new product.

  • No. Budget will have a net loss of $48,000.00 with the new product.

  • No. Budget will have a net loss of $120,000.00 with the new product.

Explanation

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