Question 1

Variable costs per unit are not affected by changes in activity.

Accepted Answer

A) True 
 B)False

Question 2

If 5,000 units are sold, the total variable cost is closest to:

Accepted Answer

A)  $53,250
B)  $68,250
C)  $80,250
D)  $60,250E) C) and D)
F) B) and D)

Question 3

Brault Corporation has provided the following information:   If 10,000 units are sold, the variable cost per unit sold is closest to:

Accepted Answer

A)  $22.75
B)  $11.95
C)  $13.50
D)  $28.80E) B) and D)
F) None of the above

Question 4

What would be the total variable inspection cost at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

Accepted Answer

A)  $78,918
B)  $69,846
C)  $79,824
D)  $10,368E) None of the above
F) A) and B)

Question 5

Factory overhead is typically a(n) :

Accepted Answer

A)  mixed cost.
B)  fixed cost.
C)  variable cost.
D)  irrelevant cost.E) B) and D)
F) A) and B)

Question 6

The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:

Accepted Answer

A)  $16.00
B)  $14.05
C)  $10.45
D)  $13.45E) A) and B)
F) A) and C)

Question 7

The conversion cost for November was:

Accepted Answer

A)  $187,000
B)  $112,000
C)  $136,000
D)  $140,000E) A) and B)
F) C) and D)

Question 8

Which of the following is correct concerning reactions to INCREASES in activity?

Accepted Answer

The answer of Which of the following is correct concerning...

Question 9

The net operating income using the contribution approach for the first quarter is:

Accepted Answer

A)  $270,000
B)  $180,000
C)  $144,000
D)  $66,000E) A) and C)
F) B) and C)

Question 10

An example of a committed fixed cost would be:

Accepted Answer

A)  taxes on real estate.
B)  management development programs.
C)  public relations costs.
D)  advertising programs.E) None of the above
F) B) and C)

Question 11

If 3,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Accepted Answer

A)  $26,550
B)  $23,550
C)  $33,300
D)  $27,300E) All of the above
F) B) and C)

Question 12

Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974.What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range.

Accepted Answer

A)  $1,197,658
B)  $1,191,000
C)  $1,179,090
D)  $1,202,910E) All of the above
F) B) and D)

Question 13

A fixed cost is not constant per unit of product.

Accepted Answer

A) True 
 B)False

Question 14

Traditional format income statements are widely used for preparing external financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 16

Contribution margin is:

Accepted Answer

A)  Sales less cost of goods sold.
B)  Sales less variable production, variable selling, and variable administrative expenses.
C)  Sales less variable production expense.
D)  Sales less all variable and fixed expenses.E) B) and D)
F) C) and D)

Question 17

The variable cost per unit depends on how many units are produced.

Accepted Answer

A) True 
 B)False

Question 18

The cost of napkins put on each person's tray at a fast food restaurant is a variable cost with respect to how many persons are served.

Accepted Answer

A) True 
 B)False

Question 19

A cost can be direct or indirect.The classification can change if the cost object changes.

Accepted Answer

A) True 
 B)False

Question 20

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable.This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________.

Accepted Answer

A)  fixed, decreasing
B)  fixed, increasing
C)  variable, decreasing
D)  variable, increasingE) A) and B)
F) A) and C)

Exam 1: Managerial Accounting and Cost Concepts

A cost can be direct or indirect.The classification can change if the cost object changes.

Correct AnswerverifiedShow Answer

If 3,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Correct AnswerverifiedShow Answer

Variable costs per unit are not affected by changes in activity.

Correct AnswerverifiedShow Answer

Contribution margin is:

Correct AnswerverifiedShow Answer

The conversion cost for November was:

Correct AnswerverifiedShow Answer

Brault Corporation has provided the following information: If 10,000 units are sold, the variable cost per unit sold is closest to:

Correct AnswerverifiedShow Answer

Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company.

Correct AnswerverifiedShow Answer

Traditional format income statements are widely used for preparing external financial statements.

Correct AnswerverifiedShow Answer

An example of a committed fixed cost would be:

Correct AnswerverifiedShow Answer

If 5,000 units are sold, the total variable cost is closest to:

Correct AnswerverifiedShow Answer

The cost of napkins put on each person's tray at a fast food restaurant is a variable cost with respect to how many persons are served.

Correct AnswerverifiedShow Answer

Which of the following is correct concerning reactions to INCREASES in activity?

Correct AnswerverifiedShow Answer

The variable cost per unit depends on how many units are produced.

Correct AnswerverifiedShow Answer

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable.This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________.

Correct AnswerverifiedShow Answer

The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:

Correct AnswerverifiedShow Answer

What would be the total variable inspection cost at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The net operating income using the contribution approach for the first quarter is:

Correct AnswerverifiedShow Answer

A fixed cost is not constant per unit of product.

Correct AnswerverifiedShow Answer

Factory overhead is typically a(n) :

Correct AnswerverifiedShow Answer

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For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable.This cost per unit increase may be due to _ costs if the level of activity at Jinan is ___.

Correct Answer
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