Whether a cost behaves as a fixed cost or as a variable cost depends upon the activity base used. presence of mixed costs. industry. company.

Assuming a company's inventory increased during the period, which of the following misclassifications increases net income? A) recording administrative salaries as a product cost B) recording depreciation on production equipment as an expense C) expensing raw material costs instead of including them in inventory D) B and C

The excess of a product's selling price over its variable costs is referred to as contribution margin. gross margin. gross profit. manufacturing margin.

The Bryan Company reported the following income for 2010:

In this capacity. Susan Mason is the manager of one department in a large store. Working capital is defined as current assets less current liabilities. which of the following kinds of information would she be interested in? A) Information that is local. relevant. current liabilities divided by long-term liabilities. current assets divided by current liabilities. . total assets minus total liabilities.What is the company's net margin? 18% 13% 73% 27% 5. and timely B) Information that is global and pertains to the business as a whole C) Information that meets cost/benefit criteria D) Both A and C 6.

000 including inventory of $10.000.6 þÿ þÿ Time remaining: 1:12:58 .7.000.9 2. Which of the following types of labor costs will not initially flow through the balance sheet? Assembly labor Salaries for sales staff Plant supervision Material handling þÿ þÿ Time remaining: 1:13:30 9. No impact Increase it Decrease it 8. What impact will this transaction have on the firm's current ratio? Not enough information is provided to answer the question. Pandori Company collected $500 from an account receivable.1 3. and current liabilities of $25.6 1. Mitchell Company has total current assets of $65. The company's current ratio is 3.

Identify the true statement regarding how product costs in a manufacturing company differ from product costs in a service company. Manufacturing companies accumulate product costs in inventory accounts. 12.000 outstanding common shares. Her company currently produces a component used in manufacturing several of the firm's products. Donna may have violated the competence standard because her report was incomplete in that it failed to consider the other costs required to manufacture the component in-house. The Haas Company paid total cash dividends of $44. Service companies generally incur less labor costs than manufacturing companies. Select the correct statement from the following. while services companies do not. On the most recent trading day.10. In a report evaluating the desirability of buying the component instead.1% 11. As a Certified Management Accountant. . Donna is bound by the standards of ethical conduct issued by the Institute of Management Accountants. the common shares sold at $80. Service companies are less competitive than manufacturing companies.000 on 25. Donna compared the expected purchase price of the component to the cost of materials contained in the component. Manufacturing companies incur costs for supplies but service companies do not.2% 2. All of these are correct. What is this company's dividend yield? 3. Donna may have violated the objectivity standard because she failed to disclose fully all relevant information that could influence this outsourcing decision.2% 5% 14.

Determining the exact cost of a product is virtually impossible. Even when producing multiple units of the same product.000.000. this company's working capital is $72.000. Which of the following should be recorded as an asset? Paid for a new advertising campaign Paid rent on the warehouse used to store finished goods Paid salary for the vice president of marketing Paid for raw materials to be used in production þÿ þÿ Time remaining: 1:11:03 14. . accounts receivable of $34. and. $46. 13. inventory of $26.000. normal variations occur in the amount of materials and labor used. 15. Some manufacturing-related costs cannot be accurately traced to specific units of product. $ 6.000.Donna may have violated the confidentiality standard if she provided any confidential information about the firm's costs to outside vendors. $22.000.000. Assuming current liabilities of $24.000.000. Pakeham Company has cash of $10. Why do accountants normally calculate cost per unit as an average? All of these are justifications for computing average unit costs. equipment of $50.

Assuming net credit sales totaled $120. what was the company's average number of days to collect receivables? 18. Which of the following equations can be used to compute a firm's magnitude of operating leverage? net income / sales fixed costs / contribution margin contribution margin / net income net income / gross margin The following balance sheet information was provided by Paino Company: 17. Assuming net credit sales totaled $145.16.1 days .3 days 52.000.000 what is the company's accounts receivable turnover for 2009? 29 times 12 times 24 times 21 times 18.

5 days 36. .3 times 5. Variable cost per unit is expected to remain constant within the relevant range. Assuming cost of goods sold is $110.21.1 times 20. Select the incorrect statement regarding the relevant range of volume. Assuming cost of goods sold is $165.000. Total variable costs are expected to vary in direct proportion with changes in volume within the relevant range.8 days 47.4 times none of these 5. what is the company's average number of days to sell inventory? none of these 17.3 days 21.5 days 19.4 days 45. Total fixed costs are expected to remain constant within the relevant range.000. Total cost per unit is expected to remain constant within the relevant range. what is the company's inventory turnover? 18.

. Which of the following is a product cost for a construction company? All of these Selling costs Wages paid to the company's office manager Cost of transporting raw materials to the job site 24.22.000 $25. The following income statement is provided for Fornes Company in 2009: What amount was the company's contribution margin? $30.000 $11.000 23.000 $26.

000 þÿ þÿ Time remaining: 1:02:49 25. Its product sells for $25 and has a $10 variable cost per unit.000 units. The following partial balance sheet is provided for Templeton Company: What is the company's debt to assets ratio? 15% 67% 33% 50% þÿ þÿ Time remaining: 1:02:16 26.Barker Company's break-even point is 10. What is the company's total fixed cost amount? Fixed costs cannot be computed with the information provided. $250. The following information is provided for Steinfeld Company: .000 $100.000 $150.

000 and 175. leverage range. and additional supervisors must be hired. For example.What is this company's contribution margin? $90.000 $60.000 þÿ þÿ Time remaining: 1:01:33 27. þÿ þÿ Time remaining: 1:01:00 28.000 $35.000 units alters the company's cost structure. DeHoag Corporation provided the following information from its financial records: What is the amount of the company's earnings per share? . differential range. Romo Corporation normally produces between 150. fixed costs increase because more space must be rented.000 units each year. relevant range.000 is called the opportunity range. Producing more than 175.000 and 175. The production range between 150.000 $135.

Select from the following the incorrect statement regarding contribution margin. total fixed costs = total contribution margin An increase in the amount of variable cost per unit will decrease contribution margin and profit.72 $0. Berkut Company would break even at $600.76 þÿ þÿ Time remaining: 1:00:17 29.000 units 4. Sales .000 in total sales.80 $0. Assuming the company sells its product for $50 per unit. .20 $0. assuming that nothing else changes.000 units 16.$3.000 units 1.variable manufacturing costs = contribution margin Net income + total fixed costs = contribution margin þÿ þÿ Time remaining: 0:59:45 30. what is its margin of safety in units if sales total $800.000 units þÿ þÿ Time remaining: 0:59:13 31. At the breakeven point (where the company has neither profit nor loss).000? 12.

The company produced 5.000 for direct materials and $8. The following income statement is provided for Flint.50 a unit.1 4.1 5.500 while general. and administrative expenses totaled $3. selling.200 in rent expense. No impact Decrease it Increase it þÿ þÿ Time remaining: 0:58:32 32. What is this company's magnitude of operating leverage? 9. Lease payments and utilities on the production facilities amounted to $7. What impact will this transaction have on the company's working capital? Not enough information is provided to answer the question.00 1. Martin Company paid $4.8 þÿ þÿ Time remaining: 0:57:42 During its first year of operations. 33.000 units at a price of $7.Parshall Company paid $1.000 units and sold 4. .000.500 for production workers' wages. Inc.

500 35.000 $2.000.000 $7.000 $16.000 $14.000 $12.500 $20.000 and fixed selling and administrative costs of $1.000 $20. variable manufacturing costs of $4.What is the amount of gross margin for the first year? $14.000. What is the amount of finished goods inventory for the first year? $5. What was Martin's net income for the first year in operation? $11. fixed manufacturing costs of $1.000 þÿ þÿ Time remaining: 0:56:53 36.000 $4.000 34. What is the company's contribution margin per unit? . variable selling and administrative costs of $2. At its $25 selling price.000. Paciolli Company has sales of $10.000 $7.000.

. $55. double as well.60 $10 $0. the cost per unit will stay the same. 37.$0.40 $15 þÿ þÿ Time remaining: 0:56:07 Wall Company incurred $30. increase but will not double. the cost per unit will be $70. 38.000 units of product were made and sold.000 of fixed cost and $40. If the company's volume increases to 1.000 of variable cost when 1.500 units. $65. $60. decrease. If the company's volume doubles.

. 40. $80. If the company's volume increases to 1.500 units. If the company's volume doubles. $105. increase but will not double. the company's total cost will decrease.000.39.500.000.000. $90. stay the same. double as well. the company's total costs will be $87.

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