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Accounting Exam II

Question 1 of 21

1

Activity Base is the activity that causes cost to change

Select one of the following:

  • True
  • False

Explanation

Question 2 of 21

1

Relevant range is the range of activity over which the changes in costs are not of interest.

Select one of the following:

  • True
  • False

Explanation

Question 3 of 21

1

Variable costs consist of DM, DL, and all FOH costs.

Select one of the following:

  • True
  • False

Explanation

Question 4 of 21

1

For Variable costs, what happens to cost per unit and total cost? Do they change or stay the same with changes in production?

Select one of the following:

  • Cost per unit decreases, Total cost stays the same.

  • Cost per unit increases, Total cost decreases.

  • Cost per unit stays the same, Total cost changes in proportion to activity base.

Explanation

Question 5 of 21

1

For Fixed Cost, how do total cost and cost per unit react to changes in activity base?

Select one of the following:

  • Cost per unit increases as activity level increases; Total cost remains the same regardless to production

  • Cost per unit decreases as activity level decreases;Total cost changes in proportion to changes in activity level

  • Cost per unit decreases as activity level increases;Total cost remains the same regardless of production

Explanation

Question 6 of 21

1

What method is used to separate variable and fixed costs for mixed costs?

Select one of the following:

  • Break-Even point

  • High-low

  • Margin of Safety

  • Operating Leverage

Explanation

Question 7 of 21

1

What are some examples of variable costs?

Select one or more of the following:

  • straight-line depreciation

  • Direct materials cost

  • rent

  • sales commission

  • shipping costs

Explanation

Question 8 of 21

1

What are some examples of Fixed Costs?

Select one or more of the following:

  • Straight-line depreciation

  • Rent

  • Sales commission

  • Plant manager salary

Explanation

Question 9 of 21

1

The formula: Difference in Total Cost/Difference in units produced comes from which method?

Select one of the following:

  • Break-Even Method

  • Operating Method

  • High-low method

  • Variable Method

Explanation

Question 10 of 21

1

The formula for Fixed Cost after using High-low method is:
Total costs-(variable cost per unit x units produced)

Select one of the following:

  • True
  • False

Explanation

Question 11 of 21

1

The formula for Total Cost = (Fixed cost x units produced) + variable cost per unit

Select one of the following:

  • True
  • False

Explanation

Question 12 of 21

1

How do we find Contribution Margin?

Select one of the following:

  • variable costs - sales

  • sales - variable costs

  • sales - fixed costs

Explanation

Question 13 of 21

1

How do we find Contribution Margin Ratio?

Select one of the following:

  • contribution margin / sales

  • sales / contribution margin

  • unit contribution margin / sales

Explanation

Question 14 of 21

1

How do we find Unit Contribution Margin?

Select one of the following:

  • unit selling price - variable costs

  • fixed costs - unit selling price

  • unit selling price - unit variable costs

Explanation

Question 15 of 21

1

How do we find Break-Even Point (units)?

Select one of the following:

  • fixed cost/ unit contribution margin

  • fixed cost / contribution margin

  • variable cost / contribution margin ratio

  • fixed cost / contribution margin ratio

Explanation

Question 16 of 21

1

How do we find Break-Even Point (dollars $)

Select one of the following:

  • Fixed cost / unit contribution margin

  • Fixed cost / contribution margin ratio

  • Fixed cost / unit contribution margin ratio

  • Variable cost / unit contribution margin

Explanation

Question 17 of 21

1

Break-Even Point is affected by?

Select one or more of the following:

  • changes in fixed costs

  • changes is variable costs

  • changes in unit variable costs

  • changes in unit selling price

Explanation

Question 18 of 21

1

An increase in fixed costs increases break-even point with a direct relationship

Select one of the following:

  • True
  • False

Explanation

Question 19 of 21

1

A decrease in fixed cost increases break-even point

Select one of the following:

  • True
  • False

Explanation

Question 20 of 21

1

An increase in unit variable cost will increase the break-even point, and a decrease in unit variable cost will decrease the break-even point.

Select one of the following:

  • True
  • False

Explanation

Question 21 of 21

1

An increase in the unit selling price will decrease the break-even point, and a decrease in the unit selling price will increase the break-even point.

Select one of the following:

  • True
  • False

Explanation

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