Professional Documents
Culture Documents
ANSWER: True
DIFFICULTY: Bloom's:
Remembering Easy
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
2. In determining cost of goods sold, two alternate costing concepts can be used: direct costing and variable costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
3. Fixed factory overhead costs are included as part of the cost of products manufactured under the
absorption costing concept.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
4. Under absorption costing, the cost of finished goods includes direct materials, direct labor, and all factory overhead.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
5. Under absorption costing, the cost of finished goods includes only direct materials, direct labor, and variable
factory overhead.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
6. In variable costing, the cost of products manufactured is composed of only those manufacturing costs that
increase or decrease as the volume of production rises or falls.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
7. In variable costing, fixed costs do not become part of the cost of goods manufactured, but are considered
an expense of the period.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
9. Property taxes on a factory building would be included as part of the cost of products manufactured under
the absorption costing concept.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
10. The taxes on the factory superintendent's salary would be included as part of the cost of products manufactured
under the variable costing concept.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
11. The factory superintendent's salary would be included as part of the cost of products manufactured under the
absorption costing concept.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
12. Electricity purchased to operate factory machinery would be included as part of the cost of products
manufactured under the absorption costing concept.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
13. The absorption costing income statement does not distinguish between variable and fixed costs.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
14. In the absorption costing income statement, deduction of the cost of goods sold from sales yields gross profit.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
15. In the absorption costing income statement, deduction of the cost of goods sold from sales yields
contribution margin.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
16. In the absorption costing income statement, deduction of the cost of goods sold from sales yields net profit.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
17. On the variable costing income statement, deduction of the variable cost of goods sold from sales yields
gross profit.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
18. On the variable costing income statement, deduction of the variable cost of goods sold from sales
yields manufacturing margin.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
19. On the variable costing income statement, all of the fixed costs are deducted from the contribution margin.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
20. On the variable costing income statement, variable selling and administrative expenses are deducted
from manufacturing margin to yield contribution margin.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
21. On the variable costing income statement, variable costs are deducted from contribution margin to
yield manufacturing margin.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
22. On the variable costing income statement, the amounts representing the difference between the contribution
margin and income from operations is the fixed manufacturing costs and fixed selling and administrative
expenses.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
23. The contribution margin and the manufacturing margin are usually equal.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
24. For a period during which the quantity of inventory at the end was larger than that at the beginning, income
from operations reported under variable costing will be larger than income from operations reported under
absorption costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
25. For a period during which the quantity of inventory at the end was larger than that at the beginning, income
from operations reported under variable costing will be smaller than income from operations reported under
absorption costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
26. For an accounting period during which the quantity of inventory at the end was smaller than the quantity at
the beginning, income from operations reported under variable costing will be larger than income from
operations reported under absorption costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
27. For a period during which the quantity of inventory at the end was smaller than that at the beginning, income
from operations reported under variable costing will be smaller than income from operations reported under
absorption costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
28. For a period during which the quantity of inventory at the end equals the inventory at the beginning, income
from operations reported under variable costing will be smaller than income from operations reported under
absorption costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
29. For a period during which the quantity of inventory at the end equals the inventory at the beginning, income
from operations reported under variable costing will equal income from operations reported under absorption
costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
30. For a period during which the quantity of product manufactured exceeded the quantity sold, income from
operations reported under absorption costing will be smaller than income from operations reported under variable
costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
31. For a period during which the quantity of product manufactured exceeded the quantity sold, income from
operations reported under absorption costing will be larger than income from operations reported under variable
costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
32. For a period during which the quantity of product manufactured was less than the quantity sold, income from
operations reported under absorption costing will be larger than income from operations reported under
variable costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
33. For a period during which the quantity of product manufactured was less than the quantity sold, income from
operations reported under absorption costing will be smaller than income from operations reported under
variable costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
34. For a period during which the quantity of product manufactured equals the quantity sold, income from
operations reported under absorption costing will equal the income from operations reported under variable
costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
35. For a period during which the quantity of product manufactured equals the quantity sold, income from
operations reported under absorption costing will be smaller than the income from operations reported under
variable costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
36. Changes in the quantity of finished goods inventory, caused by differences in the levels of sales and
production, directly affect the amount of income from operations reported under absorption costing.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
37. Under absorption costing, the amount of income reported from operations can be increased by producing more
units than are sold.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
38. Under absorption costing, increases or decreases in income from operations due to changes in inventory
levels could be misinterpreted to be the result of operating efficiencies or inefficiencies.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
39. Management may use both absorption and variable costing methods for analyzing a particular product.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
40. Property tax expense is an example of a controllable cost for the supervisor of a manufacturing department.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
41. Direct labor cost is an example of a controllable cost for the supervisor of a manufacturing department.
a. True
b. False
ANSWER: True
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
42. In the short run, the selling price of a product should normally not be less than the variable costs and expenses
of making and selling it.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
43. In the long run, for a business to remain in operation, the revenues from products sold should normally cover
all costs and expenses and provide a reasonable income.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
44. For short-run production planning, information in the absorption costing format is more useful to management
than is information in the variable costing format.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
45. For short-run production planning, information in the variable costing format is more useful to management than
is information in the absorption costing concept format.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
46. Sales mix is generally defined as the relative distribution of sales among the various products sold.
a. True
b. False
ANSWER: True
DIFFICULTY: Bloom's:
Remembering Easy
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
47. If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is
profitable to increase the sales of that product with the lowest contribution margin.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
48. If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is
profitable to increase the sales of that product with the highest contribution margin.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
49. The contribution margin ratio is computed as contribution margin divided by sales.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
50. In evaluating the performance of salespersons, the salesperson with the highest level of sales should be
evaluated as the best performer.
a. True
b. False
ANSWER: False
DIFFICULTY: Challenging
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
51. Companies prepare contribution margin reports by market segments and product segments because
products contribute to profitability in various ways.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
52. Ford’s Expedition sport utility vehicle is its most profitable model. Therefore, Ford need not promote its Expedition
model anymore.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-04 - 20-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
53. The systematic examination of differences between planned and actual contribution margins is termed
contribution margin analysis.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
54. In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in
unit sales price or cost, is termed the quantity factor.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
55. In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in
unit sales price or cost, is termed the unit price or unit cost factor.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
56. In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units
sold is termed the unit price or unit cost factor.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
57. In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units
sold is termed the quantity factor.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
58. 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.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
59. In contribution margin analysis, the unit price or unit cost 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.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
60. In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the
actual unit price or unit cost and the planned unit price or unit cost, multiplied by the actual quantity sold.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
61. A change in the amount of sales can be due to either a change in the units sold or a change in price or both.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-05 - 20-05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
62. Contribution margin reporting and analysis is appropriate only for manufacturing firms, not for service firms.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-06 - 20-06
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
63. Service firms can only have one activity base for analyzing changes in costs.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-06 - 20-06
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
64. In a service firm, it may be necessary to have several activity bases to properly match the change in costs with the
changes in various activities.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-06 - 20-06
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
65. Managers in service firms do not find contribution margin analysis reports useful because their firms do not
sell inventory.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-06 - 20-06
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
66. 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 all factory overhead cost?
a. Standard costing
b. Variable costing
c. Absorption costing
d. Marginal costing
ANSWER: c
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
67. 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. Absorption costing
b. Differential costing
c. Standard costing
d. Variable costing
ANSWER: d
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
ANSWER: c
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
69. Under absorption costing, which of the following costs would not be included in finished goods inventory?
a. direct labor cost
b. direct materials cost
c. variable and fixed factory overhead cost
d. variable and fixed selling and administrative expenses
ANSWER: d
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
70. Under absorption costing, which of the following costs would not be included in finished goods inventory?
a. hourly wages of assembly worker
b. straight-line depreciation on factory equipment
c. overtime wages paid to factory workers
d. the salaries for salespeople
ANSWER: d
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
71. Under variable costing, which of the following costs would not be included in finished goods inventory?
a. direct labor cost
b. direct materials cost
c. variable factory overhead cost
d. fixed factory overhead cost
ANSWER: d
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
72. Under variable costing, which of the following costs would be included in finished goods inventory?
a. neither variable nor fixed factory overhead cost
b. both variable and fixed factory overhead cost
c. only variable factory overhead cost
d. only fixed factory overhead cost
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
73. Under variable costing, which of the following costs would be included in finished goods inventory?
a. salary of salesperson
b. salary of vice-president of finance
c. wages of carpenters in a furniture factory
d. straight-line depreciation on factory equipment
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
74. Under variable costing, which of the following costs would not be included in finished goods inventory?
a. wages of machine operator
b. steel costs for a machine tool manufacturer
c. salary of factory supervisor
d. electricity used by factory machinery
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
75. Which of the following would be included in the cost of a product manufactured according to absorption costing?
a. advertising expense
b. sales salaries
c. depreciation expense on factory building
d. office supplies costs
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
76. Which of the following would be included in the cost of a product manufactured according to variable costing?
a. sales commissions
b. office supply costs
c. interest expense
d. direct materials
ANSWER: d
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
77. On the variable costing income statement, the figure representing the difference between manufacturing
margin and contribution margin is the:
a. fixed manufacturing costs
b. variable cost of goods sold
c. fixed selling and administrative expenses
d. variable selling and administrative expenses
ANSWER: d
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
78. In the variable costing income statement, deduction of variable selling and administrative expenses
from manufacturing margin yields:
a. differential margin
b. contribution margin
c. gross profit
d. marginal expenses
ANSWER: b
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
79. The amount of income under absorption costing will equal the amount of income under variable costing when
units manufactured:
a. exceed units sold
b. equal units sold
c. are less than units sold
d. are equal to or greater than units sold
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
80. The amount of income under absorption costing will be less than the amount of income under variable costing
when units manufactured:
a. exceed units sold
b. equal units sold
c. are less than units sold
d. are equal to or greater than units sold
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
81. Which of the following statements is correct using the direct costing concept?
a. All manufacturing costs are included in the calculation of cost of goods manufactured.
b. Only fixed costs are included in the calculation of cost of goods manufactured while variable costs
are considered period costs.
c. Only variable manufacturing costs are included in the calculation of cost of goods manufactured while
fixed costs are considered period costs.
d. All manufacturing costs are considered period costs.
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
82. The amount of income under absorption costing will be more than the amount of income under variable
costing when units manufactured:
a. exceed units sold
b. equal units sold
c. are less than units sold
d. are equal to or greater than units sold
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-01 - 20-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
83. The level of inventory of a manufactured product has increased by 7,000 units during a period. The following
data are also available:
Variable Fixed
Unit manufacturing costs of the period $12.00 $6.00
Unit operating expenses of the period 4.00 1.50
What would be the effect on income from operations if absorption costing is used rather than variable costing?
a. $42,000 decrease
b. $42,000 increase
c. $52,500 increase
d. $52,500 decrease
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
84. The level of inventory of a manufactured product has increased by 8,000 units during a period. The following
data are also available:
Variable Fixed
Unit manufacturing costs of the period $24.00 $10.00
Unit operating expenses of the period 8.00 3.00
What would be the effect on income from operations if variable costing is used rather than absorption costing?
a. $80,000 decrease
b. $80,000 increase
c. $104,000 decrease
d. $104,000 increase
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
85. S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the
manufactured product remained unchanged. The manufacturing costs were as follows:
Variable Fixed
Unit manufacturing costs of the period $11.00 $7.00
Unit operating expenses of the period 3.00 2.50
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
86. The level of inventory of a manufactured product has increased by 8,000 units during a period. The following
data are also available:
Variable Fixed
Unit manufacturing costs of the period $24.00 $10.00
Unit operating expenses of the period 8.00 3.00
What would be the effect on income from operations if absorption costing is used rather than variable costing?
a. $80,000 decrease
b. $80,000 increase
c. $104,000 increase
d. $104,000 decrease
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
87. The level of inventory of a manufactured product has increased by 5,000 units during a period. The following
data are also available:
Variable Fixed
Unit manufacturing costs of the period $24.00 $10.00
Unit operating expenses of the period 8.00 3.00
What would be the effect on income from operations if variable costing is used rather than absorption costing?
a. $50,000 decrease
b. $50,000 increase
c. $65,000 increase
d. $65,000 decrease
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
88. The level of inventory of a manufactured product has increased by 4,000 units during a period. The following
data are also available:
Variable Fixed
Unit manufacturing costs of the period $22.00 $11.00
Unit operating expenses of the period 7.00 5.00
What would be the effect on income from operations if absorption costing is used rather than variable costing?
a. $44,000 decrease
b. $44,000 increase
c. $64,000 increase
d. $64,000 decrease
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
89. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $130,000
Fixed operating expenses 50,000 180,000
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?
a. $64,000
b. $56,000
c. $66,400
d. $78,400
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
90. A business operated at 100% of capacity during its first month and incurred the following costs:
Operating expenses:
Variable operating expenses $ 65,000
Fixed operating expenses 25,000 90,000
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?
a. $38,000
b. $40,500
c. $34,000
d. $47,000
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
91. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $130,000
Fixed operating expenses 50,000 180,000
If 1,500 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?
a. $62,500
b. $73,500
c. $60,000
d. $52,500
ANSWER: d
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
92. A business operated at 100% of capacity during its first month and incurred the following costs:
Operating expenses:
Variable operating expenses $ 65,000
Fixed operating expenses 25,000 90,000
If 600 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?
a. $24,300
b. $28,200
c. $22,800
d. $34,000
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
93. A business operated at 100% of capacity during its first month and incurred the following costs:
Operating expenses:
Variable operating expenses $15,000
Fixed operating expenses 4,500 19,500
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?
a. $5,625
b. $5,250
c. $5,760
d. $6,210
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
94. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $ 60,000
Fixed operating expenses 18,000 78,000
If 500 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?
a. $41,500
b. $36,000
c. $42,800
d. $38,500
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
95. A business operated at 100% of capacity during its first month and incurred the following costs:
Operating expenses:
Variable operating expenses $ 34,000
Fixed operating expenses 2,000 36,000
If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what would be
the amount of income from operations reported on the variable costing income statement?
a. $100,800
b. $100,000
c. $114,800
d. $140,000
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
96. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $17,000
Fixed operating expenses 1,000 18,000
If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, what would be
the amount of income from operations reported on the absorption costing income statement?
a. $50,400
b. $70,000
c. $52,000
d. $68,400
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
97. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $ 34,000
Fixed operating expenses 2,000 36,000
If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of
the manufacturing margin that would be reported on the variable costing income statement?
a. $104,000
b. $106,000
c. $140,000
d. not reported
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
98. A business operated at 100% of capacity during its first month and incurred the following
costs:
Operating expenses:
Variable operating expenses $17,000
Fixed operating expenses 1,000 18,000
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?
a. $50,000
b. $54,000
c. not reported
d. $70,000
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
99. A business operated at 100% of capacity during its first month and incurred the following costs:
Operating expenses:
Variable operating expenses $17,000
Fixed operating expenses 1,000 18,000
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 contribution margin that would be reported on the variable costing income statement?
a. $51,400
b. $52,000
c. $54,000
d. $53,000
ANSWER: d
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
100. A business operated at 100% of capacity during its first month, with the following results:
Operating expenses:
Variable operating expenses $ 12,000
Fixed operating expenses 2,000 14,000
What is the amount of the manufacturing margin that would be reported on the variable costing income
statement?
a. $30,000
b. $38,000
c. $56,000
d. $44,000
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
A business operated at 100% of capacity during its first month, with the following results:
101. What is the amount of the contribution margin that would be reported on the variable costing income statement?
a. $34,200
b. $20,200
c. $29,700
d. $26,200
ANSWER: d
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.30 - Contribution Margin
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
102. What is the amount of the income from operations that would be reported on the variable costing income statement?
a. $18,900
b. $18,200
c. $18,000
d. $21,000
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
103. What is the amount of the income from operations that would be reported on the absorption costing income
statement?
a. $21,000
b. $18,900
c. $18,200
d. $27,900
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
104. What is the amount of the gross profit that would be reported on the absorption costing income statement?
a. $21,000
b. $18,900
c. $27,900
d. $18,000
ANSWER: c
DIFFICULTY: Moderate
Bloom's: Applying
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
105. Accountants prefer the variable costing method over absorption costing method for evaluating the performance of
a company because
a. by using the absorption costing method, income could appear to be higher by producing more inventory.
b. by using the absorption costing method, income could appear to be lower by producing more inventory.
c. by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and
sales remain the same.
d. by using the variable costing method, all fixed and variable costs are included in the unit cost of the product
manufactured.
ANSWER: a
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 20(5): Variable Costing for Management Analysis
106. Under which inventory costing method could increases or decreases in income from operations be misinterpreted
to be the result of operating efficiencies or inefficiencies?
a. only variable costing
b. only absorption costing
c. both variable and absorption costing
d. neither variable nor absorption costing
ANSWER: b
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-02 - 20-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
107. 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:
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 run
ANSWER: b
DIFFICULTY: Moderate
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
108. Costs that can be influenced by management at a specific level of management are called:
a. direct costs.
b. variable costs.
c. noncontrollable costs.
d. controllable costs.
ANSWER: d
DIFFICULTY: Easy
Bloom's: Remembering
LEARNING OBJECTIVES: FNMN.WARD.16.20-03 - 20-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Another random document with
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has sido tan amada, y separarte de estos chicos que has criado y que
como a madre te miran?...
El padre Alelí fijó en ella sus ojos, ávidos de leer en los de la joven
lo que de su alma saliese al rostro, si es que algo salía. El buen fraile
que a pesar de su decrepitud, ocasionada a perturbaciones mentales
conservaba algo de su antigua penetración, creyó ver en Sola una
pena muy viva. Esto le hacía sonreír, diciendo para su sayo: «mujercita
tenemos».
—Don Benigno no se casará —dijo ella—. ¿Será posible que caiga
en tan mala tentación? Yo de mí sé decir que si salgo de esta casa me
moriré de pena; tan tranquila, tan considerada y tan feliz he vivido en
ella. Y luego, estos diablillos del cielo, como yo les llamo; estos
muchachos, a quienes quiero tanto sin ser míos, y no tengo mejo
gusto que ocuparme de ellos... No, digo que don Benigno no se
casará. Sería un disparate; ya no está en edad para eso.
—¿Qué dices ahí, tontuela? —exclamó Alelí incorporándose con
enojo—. ¿Conque mi amigo no está en edad de casarse? ¿Es acaso
algún viejo chocho? ¿Está por ventura enfermo? No, más sana y
limpia está su persona y su sangre noble que la de todos esos
mozuelos del día.
Esto decía, cuando Juan Jacobo, cansado de estarse quieto tanto
tiempo y no teniendo interés en la conversación, empezó a tirarle de
los bigotes al gato, que dormido estaba en la falda del fraile. Sentirse
el animal tan malamente interrumpido en su sueño de canónigo y
empezar a dar bufidos y a sacar las uñas, fue todo uno. Alborotose e
fraile con los rasguños, y dio un coscorrón al chico; Sola le aplicó dos
nalgadas, y todo concluyó con enfadarse el muchacho y coger el gato
en brazos y marcharse con él a un rincón, donde le puso el sombrero
del mercedario para que durmiera.
—Eso es, sí, está mi sombrero para cama de gatos —refunfuñó
Alelí.
—¡Jesús qué criatura!... Le voy a matar —dijo Sola amenazándole
con la mano—. Trae acá el sombrero.
Juan trajo el sombrero, y aprovechándose del interés que en la
corversación tenían el fraile y la joven, rescató su molinillo y su
bandeja y bajó a la tienda para escaparse a la calle.
—Vaya con la tonta —dijo Alelí continuando su interrumpido tema
—. ¡Si Benigno es un muchacho, un chiquillo...! ¡Si me parece que fue
ayer cuando le vi arrastrándose a gatas por un cerrillo que hay delante
de su casa...! ¡Qué piernazas aquellas, qué brazos y qué manotas
tenía! ¡Y cómo se agarraba al pecho de su madre, y qué mordidas le
daba el muy antropófago! Yo le cogía en brazos y le daba unos
palmetazos en los muslos... Sabrás que fui al pueblo a restablecerme
de unas intermitentes que cogí en Madrid cuando vine a las elecciones
de la Orden. Entonces conocí al bueno de Jovellanos, un Voltaire
encubierto, dígase lo que se quiera, y al conde de Aranda, que era un
Pombal español, y a mi señor don Carlos III, que era un Federico de
Prusia españolizado...
—Al grano, al grano.
—Justo es que al grano vayamos. Cuando Nicolás Moratín y yo
disputábamos...
—Al grano.
—Pues digo que Benigno es un mozalbete. ¿No ves su arrogancia
su buen color, sus bríos? Bah, bah... Oye una cosa, hijita: Benigno se
casará, tú te quedarás sola, y entonces será bien añadir a tu nombre
otra palabra, llamándote Sola y Monda en vez de Sola a secas. Pero
aquí viene bien darte un consejo... ¿Sabes, hija mía, que me está
entrando un sueño tal, que la cabeza me parece de plomo?
—Pues deme su reverencia el consejo y duérmase después —
repuso ella con impaciencia.
—El consejo es que te cases tú también, y así, del matrimonio de
Benigno no podrá resultar ninguna desgracia... ¡Qué sueño, santo
Dios!
Sola se echó a reír.
—¡Casarme yo!... Qué bromas gasta el padrito.
—Hija, el sueño me rinde... no puedo más —dijo Alelí luchando con
su propia cabeza, que sobre el pecho se caía, y tirando de sus propios
párpados con nervioso esfuerzo para impedir que se cerraran cua
pesadas compuertas.
—Otro cigarrito.
—Sí..., chupetón..., humo —murmuró Alelí, cuya flaca naturaleza
era bruscamente vencida por la necesidad del reposo.
XIII