Questions -
Question 1 - A publisher sells a calendar for $6.50. The variable cost per calendar is $3 at the current annual sales volume of 200,000 calendars; at this volume the publisher is just breaking even. What are the fixed costs?
A) $600,000
B) $700,000
C) $1,200,000
D) $1,300,000
Question 2 - Straight-line depreciation on a building would best be classified as a
A) variable cost.
B) committed fixed cost
C) mixed cost.
D) all of the above
Question 3 - The paper costs of a printing shop would best be classified as a:
A) variable cost.
B) committed fixed cost.
C) discretionary fixed cost.
D) mixed cost.
Question 4 - If the fixed costs for a product decrease and the per unit variable costs decrease, what will be the effect on the contribution margin and the breakeven point, respectively?
A) Decrease/Decrease.
B) Decrease/Increase. .
C) Increase/Increase.
D) Increase/Decrease
Question 5 - The Blue Company is planning to sell product Z for $5 a unit. Variable costs are $3 a unit and fixed costs are $100,000. What must the total sales be to break even?
A) $160,000
B) $166,667
C) $250,000
D) $266,667
Question 6 - Employee salaries which consist of a $35,000 base amount plus 12% of sales would best be classified as a:
A) variable cost.
B) committed fixed cost..
C) discretionary fixed cost.
D) mixed cost
Question 7 - Within a "relevant range," which of the following statements about fixed costs is true?
A) Fixed costs are constant per unit of production.
B) Fixed costs per unit will fall as production rises.
C) Total fixed costs change as production volume changes
D) Fixed costs are costs which are paid uniformly over a year
Question 8 - Which of the following statements about variable costs is true?
A) Per unit variable costs are constant.
B) Per unit variable costs always increase as production increases.
C) Per unit variable costs always decrease as production increases.
D) Variable costs are always product costs
Question 9 - Budgetary slack refers to the:
A) use of padding to avoid unfavorable appraisals.
B) increasing of sales prices to cover budget deficits.
C) budgeted profit margin.
D) "Other expenses" item of the budget
Question 10 - The budgeting process would normally begin with the preparation of a:
A) cash budget.
B) capital expenditure budget.
C) sales budget.
D) production budget
Question 11 - A company began operations on January 1 with cash of $75,000. January sales were $150,000. No collections occurred. Cost of goods sold is $40,000, and there are no ending inventories or payables. How much cash was on hand at the end of January?
A) $35,000.
B) $110,000.
C) $185,000.
D) $225,000.
Question 12 - Another name for "pro forma financial statements" would be:
A) computer generated financial statements. .
B) projected financial statements
C) historical cost financial statements
D) external use financial statements
Question 13 - What term identifies an accounting system in which the operations of the business are broken down into cost centers and the control function of a manager or supervisor is emphasized?
A) Responsibility accounting.
B) Operations-research accounting.
C) Budgetary accounting.
D) Control accounting.
Question 14 - A performance report would provide information about:
A) budgeted income statement item amounts.
B) actual income statement item amounts.
C) variances between budgeted and actual income statement item amounts.
D) all of these
Question 15 - A continuous budget typically:
A) drops completed months and adds future months as time passes.
B) is known as pro forma budgeting.
C) is a top-down approach with management constantly issuing budget edicts.
D) eliminates the need for periodic bank reconciliations.