chap 123

1,500 pts ended
. The Blue Company is currently selling its single product for $15.  Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $4,800 per month.  If Blue increases its selling price by 10%, its variable cost ratio will (Points : 1)                                        

2. Which field of accounting emphasizes relevancy over comparability? (Points : 1)

3. Which of the following best distinguishes an opportunity cost from an outlay cost? (Points : 1)

4. At a break-even point of 400 units, variable costs were $400 and fixed costs were $200. What will the 401st unit sold contribute to operating profits before income taxes? (Points : 1)

5. Given the following data:

Per Unit
Less variable expenses
Contribution margin
Less fixed expenses
Net income
$  6,000

If sales decrease by 500 units, by what % would fixed expenses have to be reduced by to maintain current net income? (Points : 1)

6. The Cost of Goods Manufactured Statement summarizes the periodic production operations for a company. On the face of that schedule are intermediate calculations supporting the cost of goods manufactured figure. The beginning Work-in-Process inventory plus the total of the manufacturing costs equals (Points : 1)

7. A company which manufactures custom-made machinery routinely incurs sizable telephone costs in the process of taking sales orders from customers. Which of the following is a proper classification of this cost? (Points : 1)

8. Which of the following would not cause the breakeven point to change? (Points : 1)

9. A manufacturing company incurs direct labor costs as it transforms direct material into marketable products. The cost of the direct labor will be treated as a period cost on the income statement when the resulting: (Points : 1)

10. Which of the following activities would not be considered a value-added activity? (Points : 1)

Answers (4)


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