# Cost Accounting

 1. Which of the following is true regarding the contribution margin ratio of a single product company? (Points : 2)

[removed]As fixed expenses decrease, the contribution margin ratio increases.
[removed]The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit.
[removed]The contribution margin ratio will decline as unit sales decline.
[removed]The contribution margin ratio equals the selling price per unit less the variable expense ratio.

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 2. If a company is operating at the break-even point: (Points : 2)

[removed]its contribution margin will be equal to its variable expenses.
[removed]its margin of safety will be equal to zero.
[removed]its fixed expenses will be equal to its variable expenses.
[removed]its selling price will be equal to its variable expense per unit.

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 3. Target profit analysis is used to answer which of the following questions? (Points : 2)

[removed]What sales volume is needed to cover all expenses?
[removed]What sales volume is needed to cover fixed expenses?
[removed]What sales volume is needed to earn a specific amount of net operating income?
[removed]What sales volume is needed to avoid a loss?

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 4. The margin of safety can be calculated by: (Points : 2)

[removed]Sales (Fixed expenses/Contribution margin ratio).
[removed]Sales (Fixed expenses/Variable expense per unit).
[removed]Sales (Fixed expenses + Variable expenses).
[removed]Sales Net operating income.

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 5. Sorin Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. If the company sells 4,600 units, its total contribution margin should be closest to: (Points : 2)

[removed]\$54,600
[removed]\$59,800
[removed]\$69,400
[removed]\$13,362

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 6. Decaprio Inc. produces and sells a single product. The company has provided its contribution format income statement for June. If the company sells 9,200 units, its net operating income should be closest to: (Points : 2)

[removed]\$27,077
[removed]\$49,900
[removed]\$36,700
[removed]\$25,900

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 7. The margin of safety in the Flaherty Company is \$24,000. If the company’s sales are \$120,000 and its variable expenses are \$80,000, its fixed expenses must be: (Points : 2)

[removed]\$8,000
[removed]\$32,000
[removed]\$24,000
[removed]\$16,000

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 8. Jilk Inc.’s contribution margin ratio is 58% and its fixed monthly expenses are \$36,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company’s net operating income in a month when sales are \$103,000? (Points : 2)

[removed]\$23,740
[removed]\$59,740
[removed]\$67,000
[removed]\$7,260

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 9. Borich Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly unit sales is closest to: (Points : 2)

[removed]2,055
[removed]4,030
[removed]4,194
[removed]3,426

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 10. Data concerning Follick Corporation’s single product appear below: The break-even in monthly dollar sales is closest to: (Points : 2)

[removed]\$1,148,400
[removed]\$638,851
[removed]\$321,552
[removed]\$446,600

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 11. Hettrick International Corporation’s only product sells for \$120.00 per unit and its variable expense is \$52.80. The company’s monthly fixed expense is \$396,480 per month. The unit sales to attain the company’s monthly target profit of \$13,000 is closest to: (Points : 2)

[removed]7,755
[removed]6,093
[removed]5,753
[removed]3,412

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 12. The costing method that treats all fixed costs as period costs is: (Points : 2)

[removed]absorption costing.
[removed]job-order costing.
[removed]variable costing.
[removed]process costing.

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 13. Under the variable costing method, which of the following is always expensed in its entirety in the period in which it is incurred? (Points : 2)

[removed]fixed manufacturing overhead cost
[removed]fixed selling and administrative expense
[removed]variable selling and administrative expense
[removed]All of these

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 14. Net operating income under variable and absorption costing will generally: (Points : 2)

[removed]always be equal.
[removed]never be equal.
[removed]be equal only when production and sales are equal.
[removed]be equal only when production exceeds sales.

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 15. Fleet Corporation produces a single product. The company manufactured 700 units last year. The ending inventory consisted of 100 units. There was no beginning inventory. Variable manufacturing costs were \$6.00 per unit and fixed manufacturing costs were \$2.00 per unit. What would be the change in the dollar amount of ending inventory if variable costing was used instead of absorption costing? (Points : 2)

[removed]\$800 decrease
[removed]\$200 decrease
[removed]\$0
[removed]\$200 increase

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 16. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the total period cost for the month under the absorption costing approach? (Points : 2)

[removed]\$56,700
[removed]\$65,500
[removed]\$8,800
[removed]\$37,800

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 17. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the unit product cost for the month under variable costing? (Points : 2)

[removed]\$118
[removed]\$94
[removed]\$111
[removed]\$87

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 18. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the net operating income for the month under variable costing? (Points : 2)

[removed]\$12,700
[removed]\$5,600
[removed]\$1,700
[removed]\$14,400

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 19. The following data pertain to last year’s operations at Clarkson, Incorporated, a company that produces a single product: What was the absorption costing net operating income last year? (Points : 2)

[removed]\$44,000
[removed]\$48,000
[removed]\$50,000
[removed]\$49,000

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 20. Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. The unit product cost under absorption costing was: (Points : 2)

[removed]\$93
[removed]\$97
[removed]\$136
[removed]\$194

[removed][removed][removed][removed]

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