ACC 561 Week 4 Assignment Practice Quiz Flashcards
ACC 561 Week 4 Assignment Practice Quiz
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Multiple Choice Question 39
A variable cost is a cost that
may or may not be incurred, depending on management’s discretion.
occurs at various times during the year.
varies in total in proportion to changes in the level of activity.
varies per unit at every level of activity.
Multiple Choice Question 42
An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:
Unit Variable Cost Unit Fixed Cost
Increases Decreases
Remains constant Remains constant
Decreases Remains constant
Remains constant Decreases
Multiple Choice Question 43
A fixed cost is a cost which
remains constant per unit with changes in the level of activity.
remains constant in total with changes in the level of activity.
varies inversely in total with changes in the level of activity.
varies in total with changes in the level of activity.
Multiple Choice Question 86
Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $14 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?
80%
20%
30%
70%
Multiple Choice Question 87
Contribution margin
is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.
equals sales revenue minus variable costs.
is always the same as gross profit margin.
excludes variable selling costs from its calculation.
Multiple Choice Question 100
The equation which reflects a CVP income statement is
Entry field with correct answer
Sales + Fixed costs = Variable costs + Net income.
Sales – Variable costs + Fixed costs = Net income.
Sales – Variable costs – Fixed costs = Net income.
Sales = Cost of goods sold + Operating expenses + Net income.
Multiple Choice Question 104
A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $150,000. The number of units the company must sell to break even is
50,000 units.
30,000 units.
75,000 units.
300,000 units.
Multiple Choice Question 93
Only direct materials, direct labor, and variable manufacturing overhead costs are considered product costs when using
variable costing.
absorption costing.
product costing.
full costing.
Multiple Choice Question 96
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Under absorption costing and variable costing, how are fixed manufacturing costs treated?
Absorption
Variable
Period Cost
Period Cost
Product Cost
Product Cost
Period Cost
Product Cost
Product Cost
Period Cost
Multiple Choice Question 121
Management may be tempted to overproduce when using
Entry field with correct answer
absorption costing, in order to increase net income.
absorption costing, in order to decrease net income.
variable costing, in order to increase net income.
variable costing, in order to decrease net income.
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