Question

Question 50

1. If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

   	a.	55%
   	b.	32%
   	c.	45%
   	d.	62%

1 points

Question 51

1. The three most common cost behavior classifications are

   	a.	variable costs, period costs, and differential costs
   	b.	variable costs, product costs, and sunk costs
   	c.	fixed costs, variable costs, and mixed costs
   	d.	variable costs, sunk costs, and opportunity costs

1 points

Question 52

1. In a profit center, the department manager has responsibility for and the authority to make decisions that affect

   	a.	costs and assets invested in the center, but not revenues
   	b.	the assets invested in the center, but not costs and revenues
   	c.	both costs and revenues for the department or division
   	d.	not only costs and revenues, but also assets invested in the center

1 points

Question 53

1. Privett Company
   Accounts payable	$ 30,000
   Accounts receivable	35,000
   Accrued liabilities	7,000
   Cash	25,000
   Intangible assets	40,000
   Inventory	72,000
   Long-term investments	100,000
   Long-term liabilities	75,000
   Marketable securities	36,000
   Notes payable (short-term)	20,000
   Property, plant, and equipment	400,000
   Prepaid expenses	2,000

   ​

   ​

   Based on the data for Privett Company, what is the amount of working capital?

   	a.	$213,000
   	b.	$113,000
   	c.	$39,000
   	d.	$153,000

1 points

Question 54

1. Carmelita Inc., has the following information available:

   ​

   	Costs from Beginning Inventory	Costs from current Period
   Direct materials	2,000	$ 22,252
   Conversion costs	6,200	150,536

   ​

   ​

   At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO process cost method. Round cost per unit figures to two cents, i.e., $2.22, when calculating total costs.

   ​

   The total costs that will be transferred into Finished Goods for units started and completed were

   	a.	$161,505
   	b.	$156,960
   	c.	$162,855
   	d.	$161,775

1 points

Question 55

1. The four steps necessary to complete a cost of production report in a process cost system are

   ​

   1.	allocate costs to transferred and partially completed units
   2.	determine the units to be assigned costs
   3.	determine the cost per equivalent unit
   4.	calculate equivalent units of production

   ​

   The correct ordering of the steps is

   	a.	2, 3, 4, 1
   	b.	2, 4, 3, 1
   	c.	4, 2, 3, 1
   	d.	2, 3, 1, 4

1 points

Question 56

1. Period costs include

   	a.	operating costs that are shown on the income statement when products are sold
   	b.	current assets on the balance sheet
   	c.	current liabilities on the balance sheet
   	d.	operating costs that are shown on the income statement in the period in which they are incurred

1 points

Question 57

1. A product cost is

   	a.	expensed in the period in which it is manufactured
   	b.	shown with operating expenses on the income statement
   	c.	shown with current liabilities on the balance sheet
   	d.	expensed in the period the product is sold

1 points

Question 58

1. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:
   

   	Rails Division	Locomotive Division	Corporate Total
   Cost of goods sold	$ 47,200	$30,720
   Direct operating expenses	27,200	20,040
   Sales	108,000	78,000
   Interest expense			$ 2,040
   General overhead			18,160
   Income tax			4,700

   ​

   The gross profit for the Rails Division is

   	a.	$60,800
   	b.	$8,700
   	c.	$21,150
   	d.	$33,600

1 points

Question 59

1. Spice Inc.'s unit selling price is $60, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 8,000 units?

   	a.	$150,000 increase
   	b.	$175,000 increase
   	c.	$150,000 decrease
   	d.	$200,000 increase

1 points

Question 60

1. For April, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $98,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of April are

   	a.	$159,100
   	b.	$242,600
   	c.	$186,000
   	d.	$182,100

Answer 1

Question 50

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

Variable cost is 55% of sales, Contribution margin will be 100%-55% =45%

Or alternatively sales $820000 Less: Variable cost 55% of sales ($451000 = Contribution $369000

Contribution margin ratio = contribution / sales = $369000/$820000 = 45%

Option C is correct (45%)

Question 51

1. The three most common cost behavior classifications are

   c.	fixed costs, variable costs, and mixed costs

Option C is correct ,

Costs are classified based on behaviour into three , namely Fixed costs, variable cost and mixed costs

Variable cost is cost that directly vary with activity level , eg: direct material, direct labor

Fixed costs, Fixed costs remain unchanged even if activity level increases or decreases eg: Utility expenses

Mixed costs, It is a combination of fixed and variable costs features