Effect on the contribution margin per unit and the contribution margin ratio
1. Managerial accounting:
a.Produces information that is useful only for manufacturing organizations.
b.Is unregulated.
c.Is based exclusively on historical data.
d.Is regulated by the Securities and Exchange Commission (SEC).
d.Generally focuses on reporting information about the enterprise in its entirety rather than by subunits.
2. If the selling price and the variable cost per unit both increase by 10 percent and fixed costs do not change, what is the effect on the contribution margin per unit and the ?
a. Both remain unchanged.
b.Both increase.
c. Contribution margin per unit increases and the contribution margin ratio remains unchanged.
d. Contribution margin per unit increases and the contribution margin ratio decreases.
3. A calculation used in a CVP analysis is the breakeven point. Once the breakeven point has been reached, operating income will increase by the:
a. Gross margin per unit for each additional unit sold.
b.Contribution margin per unit for each additional unit sold.
c.Variable costs per unit for each additional unit sold.
d.Sales price per unit for each additional unit sold.
4. The Turner Company manufactures a product that has variable costs of $4.00 per unit. The product sells for $6.00 per unit. Fixed costs for the coming year are estimated to be $130,000. How many units must the company sell to generate pretax income of $30,000?
a.26,667.
b.50,000.
c.65,000.
d.80,000.
5. Responsibility accounting:
a.Fosters goal congruence.
b.Refers to the various concepts and tools used by managerial accountants for planning and control.
c.Is used to measure the performance of people.
d.Is used to measure the performance of departments.
e.All of the above are correct.
6. Decentralized firms can delegate authority by structuring an organization into responsibility centers. Which of the following organizational segments is most like a total independent standalone business where managers are expected to "make it on their own"?
a.Cost center.
b.Revenue center.
c.Profit center.
d.Investment center.
e.Contribution center.
7. Boyer Company manufactures basketballs. The forecasted income statement for the year before any special orders is as follows:
Fixed costs included in the above forecasted income statement are $1,200,000 in manufacturing COGS and $100,000 in selling expenses. Boyer received a special order offering to buy 50,000 basketballs for $7.50 each. No selling expenses will be incurred if Boyer accepts. Assume Boyer has sufficient capacity to manufacture 50,000 more basketballs. By what amount will operate income (before-tax) change as a result of accepting the special order?
a.$25,000 decrease.
b.$62,500 decrease.
c.$100,000 increase.
d. $125,000 increase.
8. Which of the following statements regarding costs and decision making is correct?
a.Fixed costs must only be considered on a per-unit basis.
b.Fixed costs will actually behave as variable costs when calculated on a per-unit basis for decision making.
c.Per-unit fixed cost amounts are valid only for make-or-buy decisions.
d.Per-unit fixed costs can be misleading because such amounts appear to behave as variable costs when, in actuality, the amounts are related to fixed expenditures.
9. Jacob Corporation wishes to determine the fixed portion of its maintenance expense (a semi-variable expense), as measured against direct-labor hours, for the first three months of the year. The inspection costs are fixed; the adjustments necessitated by errors found during inspection account for the variable portion of the maintenance costs. Information for the first quarter is as follows:
|
|
Direct-Labor Hours
|
Maintenance Expense
|
|
January
|
34,000
|
$610
|
|
February
|
31,000
|
$585
|
|
March
|
34,000
|
$610
|
What is the fixed portion of Jacob's maintenance expense, rounded to the nearest dollar?
a.$283
b.$327
c.$372
d.$408