Question

QUESTION 18 Which of the following statements is false? A. The lower the margin of safety, the higher the operating risk. B. Product costs are all costs involved in acquiring or making a product C. Contribution margin statement separates product costs from period costs D. Job order costing is to keep a separate cost record for each individual product QUESTION 19 Which of the following statements is true? A. Unit variable cost increases as the number of units produced increases B. Unit variable cost remains constant as the number of units produced increases C. Total variable costs remain the same as the number of units produced increases D. Total variable costs decrease as the number of units produced increases QUESTION 20 In choosing the best decision option, do we A. Maximize total sales revenue? B. Minimize total costs? C. Maximize total value (profit)? D. Maximize opportunity costs?

Answer 1

18. (d) Job order costing i to keep a separate cost record of each individual product

19. (b) Unit variable cost remains constant as the umber of units produced increase.

20. (c) Maximizing total value (profit)

25. Manufacturing Costs for August were $167,000 [$63,000 + $39,000 + $43,000 + $22,000]

Cost of goods manufactured for August were $155,000 [$63,000 + $39,000 + $43,000 + $10,000]

26. Profit = ({Price - Unit Variable Cost} X Sales volume in units) - Fixed Costs