2. Activity based costing allocates the costs of direct materials and overhead?
t/f
3. Activity based costing typically uses fewer cost drivers than traditional costing?
t/f
4If the volume of sales is $4,000,000 and sales at the break even point amount to $3,200,000, the margin of safety is 25%.
t/f
5. Under traditional costing, a common cost driver was direct labor hours?
t/f
6. The contribution margin ratio is:
A.
the portion of equity contributed by the stockholders
B.
the same as the variable cost ratio
C.
the same as profit
D.
the same as the profit-volume ratio
7. What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost?
A.
a. Absorption costing
B.
b. Differential costing
C.
c. Standard costing
D.
d. Variable costing
8.Cost-volume-profit analysis involves the use of the contribution margin concept?
A.
True
B.
False
9.If sales are $200,000, variable costs are 58% of sales, and operating income is $30,000, what is the contribution margin ratio?
A.
25.9%
B.
37.5
C.
58%
D.
42%
10.What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?
A.
Margin of safety ratio
B.
Contribution margin ratio
C.
Costs and expenses ratio
D.
Profit ratio
11. Sales mix is generally defined as the relative distribution of sales among the various products sold.
A.
True
B.
False
12.Variable costs are costs that vary on a per-unit basis with changes in the activity level.
A.
False
B.
True
13.If sales are $800,000, variable costs are 64% of sales, and operating income is $240,000, what is the contribution margin ratio?
A.
64%
B.
36%
C.
30%
D.
53.1%
14.If fixed costs are $200,000 and the unit contribution margin is $10, profit is zero when 25,000 units are sold.
A.
False
B.
True
15. The job order cost sheet is applicable to process costing?
t/f
16.Cost-volume-profit analysis requires the identification of fixed and variable costs?
A.
False
B.
True
17.If the unit selling price is $20, the volume of sales is $2,000,000, sales at the break-even point amount to $1,500,000, and the maximum possible sales are $2,200,000, the margin of safety is l0,000 units.
A.
False
B.
True
18. A need for having accurate costs was a cause for the increase in the use of activity based costing?
t/f
19.A firm operated at 90% of capacity for the past year, during which fixed costs were $320,000, variable costs were 60% of sales, and sales were $1,000,000. Operating profit was:
A.
$80,000
B.
$680,000
C.
$1,320,000
D.
$200,000