Question 1

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the quantity factor on the change in contribution margin is:

Accepted Answer

A)   $10,800 decrease
B)   $10,800 increase
C)   $10,000 increase
D)   $10,000 decreaseE) A) and D)
F) None of the above

Question 2

Gyro Company manufactures Products T and W and is operating at full capacity.To manufacture Product W requires three times the number of machine hours required for Product T.Market research indicates that 1,000 additional units of Product W could be sold.The contribution margin by unit of product is as follows:
​
  Calculate the increase or decrease in total contribution margin if 1,000 additional units of Product W are produced and sold.

Accepted Answer

The answer of Gyro Company manufactures Products T and W...

Question 3

Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies?

Accepted Answer

A)   only variable costing
B)   only absorption costing
C)   both variable and absorption costing
D)   neither variable nor absorption costingE) A) and D)
F) B) and C)

Question 4

Edna's Chocolates had planned to sell chocolate-covered strawberries for $3.00 each.Due to various factors,the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is (1) the quantity factor and (2) the price factor for sales?

Accepted Answer

A)   (1) $3,000,(2) $(1,250) 
B)   (1) $3,000,(2) $(3,000) 
C)   (1) $1,250,(2) $3,000
D)   (1) $(4,000) (2) $(3,000) E) C) and D)
F) None of the above

Question 5

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured:

Accepted Answer

A)   exceed units sold
B)   equal units sold
C)   are less than units sold
D)   are equal to or greater than units soldE) A) and C)
F) A) and B)

Question 6

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each) ,the effect of the unit price factor on the change in sales is a:

Accepted Answer

A)   $30,000 increase
B)   $12,500 increase
C)   $7,500 increase
D)   $30,000 decreaseE) A) and D)
F) None of the above

Question 7

It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in:

Accepted Answer

A)   the long run
B)   the short run
C)   both the short run and long run
D)   neither in the short run nor the long runE) A) and B)
F) B) and D)

Question 8

A business operated at 100% of capacity during its first month and incurred the following costs: ​
 If 1,000 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Accepted Answer

A)   $38,000
B)   $40,500
C)   $34,000
D)   $47,000E) None of the above
F) All of the above

Question 9

A business operated at 100% of capacity during its first month and incurred the following costs: ​
 If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month,what is the amount of the manufacturing margin that would be reported on the absorption costing income statement?

Accepted Answer

A)   $50,000
B)   $54,000
C)   not reported
D)   $70,000E) A) and B)
F) A) and C)

Question 10

In contribution margin analysis,the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

Accepted Answer

A) True 
 B)False

Question 11

Costs that can be influenced by management at a specific level of management are called:

Accepted Answer

A)   direct costs.
B)   variable costs.
C)   noncontrollable costs.
D)   controllable costs.E) None of the above
F) B) and C)

Question 12

Under absorption costing,which of the following costs would not be included in finished goods inventory?

Accepted Answer

A)   hourly wages of assembly worker
B)   straight-line depreciation on factory equipment
C)   overtime wages paid to factory workers
D)   the salaries for salespeopleE) B) and D)
F) A) and B)

Question 13

A business operated at 100% of capacity during its first month and incurred the following costs: ​
 If 75 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Accepted Answer

A)   $5,625
B)   $5,250
C)   $5,760
D)   $6,210E) A) and D)
F) A) and B)

Question 14

Management will use both variable and absorption costing in all of the following activities except:

Accepted Answer

A)   controlling costs
B)   product pricing
C)   production planning
D)   controlling inventory levelsE) A) and D)
F) None of the above

Question 15

A business operated at 100% of capacity during its first month and incurred the following costs: ​
 If 1,600 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the variable costing balance sheet?

Accepted Answer

A)   $64,000
B)   $56,000
C)   $66,400
D)   $78,400E) A) and B)
F) None of the above

Question 16

In the contribution margin analysis,the effect of a change in the number of units sold,assuming no change in unit sales price or unit cost,is referred to as the:

Accepted Answer

A)   sales factor
B)   cost of goods sold factor
C)   quantity factor
D)   price factorE) B) and D)
F) C) and D)

Question 17

The level of inventory of a manufactured product has increased by 7,000 units during a period.The following data are also available: ​
 What would be the effect on income from operations if absorption costing is used rather than variable costing?

Accepted Answer

A)   $42,000 decrease
B)   $42,000 increase
C)   $52,500 increase
D)   $52,500 decreaseE) None of the above
F) All of the above

Question 18

Which of the following would be included in the cost of a product manufactured according to absorption costing?

Accepted Answer

A)   advertising expense
B)   sales salaries
C)   depreciation expense on factory building
D)   office supplies costsE) A) and B)
F) B) and C)

Question 19

A business operated at 100% of capacity during its first month,with the following results: ​
 What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Accepted Answer

A)   $30,000
B)   $38,000
C)   $56,000
D)   $44,000E) A) and B)
F) A) and C)

Question 20

Under variable costing,which of the following costs would not be included in finished goods inventory?

Accepted Answer

A)   wages of machine operator
B)   steel costs for a machine tool manufacturer
C)   salary of factory supervisor
D)   electricity used by factory machineryE) A) and C)
F) B) and D)

Exam 20: Variable Costing for Management Analysis

In the contribution margin analysis,the effect of a change in the number of units sold,assuming no change in unit sales price or unit cost,is referred to as the:

Correct Answer
verified

Which of the following would be included in the cost of a product manufactured according to absorption costing?

Correct Answer
verified

Edna's Chocolates had planned to sell chocolate-covered strawberries for $3.00 each.Due to various factors,the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is (1) the quantity factor and (2) the price factor for sales?

Correct Answer
verified

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured:

Correct Answer
verified

Management will use both variable and absorption costing in all of the following activities except:

Correct Answer
verified

A business operated at 100% of capacity during its first month,with the following results: What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Correct Answer
verified

The level of inventory of a manufactured product has increased by 7,000 units during a period.The following data are also available: What would be the effect on income from operations if absorption costing is used rather than variable costing?

Correct Answer
verified

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the quantity factor on the change in contribution margin is:

Correct Answer
verified

Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies?

Correct Answer
verified

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the variable costing balance sheet?

Correct Answer
verified

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each) ,the effect of the unit price factor on the change in sales is a:

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct Answer
verified

Costs that can be influenced by management at a specific level of management are called:

Correct Answer
verified

Under absorption costing,which of the following costs would not be included in finished goods inventory?

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 75 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct Answer
verified

In contribution margin analysis,the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

Correct Answer
verified

Correct Answer
verified

Under variable costing,which of the following costs would not be included in finished goods inventory?

Correct Answer
verified

It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in:

Correct Answer
verified

Exam 20: Variable Costing for Management Analysis

In the contribution margin analysis,the effect of a change in the number of units sold,assuming no change in unit sales price or unit cost,is referred to as the:

Correct AnswerverifiedShow Answer

Which of the following would be included in the cost of a product manufactured according to absorption costing?

Correct AnswerverifiedShow Answer

Edna's Chocolates had planned to sell chocolate-covered strawberries for $3.00 each.Due to various factors,the actual price was $2.75.Edna's was able to sell 1,000 more strawberries than the anticipated 4,000.What is (1) the quantity factor and (2) the price factor for sales?

Correct AnswerverifiedShow Answer

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured:

Correct AnswerverifiedShow Answer

Management will use both variable and absorption costing in all of the following activities except:

Correct AnswerverifiedShow Answer

A business operated at 100% of capacity during its first month,with the following results: ​ What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Correct AnswerverifiedShow Answer

The level of inventory of a manufactured product has increased by 7,000 units during a period.The following data are also available: ​ What would be the effect on income from operations if absorption costing is used rather than variable costing?

Correct AnswerverifiedShow Answer

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the quantity factor on the change in contribution margin is:

Correct AnswerverifiedShow Answer

Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A business operated at 100% of capacity during its first month and incurred the following costs: ​ If 1,600 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the variable costing balance sheet?

Correct AnswerverifiedShow Answer

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each) ,the effect of the unit price factor on the change in sales is a:

Correct AnswerverifiedShow Answer

A business operated at 100% of capacity during its first month and incurred the following costs: ​ If 1,000 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct AnswerverifiedShow Answer

Costs that can be influenced by management at a specific level of management are called:

Correct AnswerverifiedShow Answer

Under absorption costing,which of the following costs would not be included in finished goods inventory?

Correct AnswerverifiedShow Answer

A business operated at 100% of capacity during its first month and incurred the following costs: ​ If 75 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct AnswerverifiedShow Answer

In contribution margin analysis,the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under variable costing,which of the following costs would not be included in finished goods inventory?

Correct AnswerverifiedShow Answer

It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A business operated at 100% of capacity during its first month,with the following results: What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Correct Answer
verified

The level of inventory of a manufactured product has increased by 7,000 units during a period.The following data are also available: What would be the effect on income from operations if absorption costing is used rather than variable costing?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the variable costing balance sheet?

Correct Answer
verified

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A business operated at 100% of capacity during its first month and incurred the following costs: If 75 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the absorption costing balance sheet?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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