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Under variable costing, the cost of goods manufactured consists of all excepta) direct materials.b) direct labor.C) variable factory overhead.d) fixed factory overhead.
Costs that have characteristics of both a variable cost and a fixed cost are classified as ________.a) variable costsb) fixed costsc) mixed costsd) None of these choices are correct.
Cost-volume-profit analysis is used for ________.a) analyzing the effects of changes in costs on profitsb) analyzing the effects of changes in volume on profitsc) determining selling priced) All of these choices are correct.
Contribution margin is the ________.a) difference between sales and fixed costsb) difference between sales and total costsc) difference between sales and variable costsd) None of these choices are correct.
Which of the following formulas is used to calculate break-even units?a) Fixed Costs ÷ Unit Contribution Marginb) Variable Costs ÷ Contribution Margin Percentc) Variable Costs ÷ Unit Contribution Margind) Fixed Costs ÷ Contribution Margin Percent
What effect does the increase in fixed costs have on the break-even units?a) Decreaseb) Increasec) No-effectd) None of these choices are correct.
If a company decides to increase the selling price of its product, what is its effect on break-even point?a) Decreaseb) Increasec) No-effectd) None of these choices are correct.
Which of the following assumptions is false in a cost-volume-profit analysis?a) Total sales and total costs can be represented by straight lines.b) Within the relevant range of operating activity, the efficiency of operations does not change.c) Costs can be divided into fixed and variable components.d) There are changes in the inventory quantities during the period
Which of the following charts plot only a profit line rather than sales and cost lines?a) Cost-volume-profit chartb) Profit-volume chartc) Profit-cost chartd) Cost-volume chart
The difference between contribution margin and income from operations is ________.a) net incomeb) variable costsc) fixed costsd) None of these choices are correct.
The relationship between a company"s contribution margin and income from operations is measured by _____.a) contribution marginb) operating leveragec) margin of safetyd) break-even point
The __________ is the relative distribution of sales among the products sold by a company.a) sales mixb) mixed costc) product mixd) None of these choices are correct.
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The unit selling price of the overall enterprise product equals the ________.a) average selling price of the productsb) price of the highest-selling product in the mixc) sum of the unit selling prices of each product multiplied by its sales mix percentaged) price of the product having the lowest selling price
Most operating decisions of management focus on a narrow range of activity called thea. relevant range of productionb. tactical operating level of productionc. optimal level of productiond. strategic level of production
Costs that vary in total in direct proportion to changes in an activity level are calleda. differential costsb. variable costsc. fixed costsd. sunk costs
The point where the sales line and the total costs line intersect on the cost-volume-profit chart representsa. the maximum possible operating lossb. the total fixed costsc. the break-even pointd. the maximum possible operating income
Which of the following is not an assumption underlying cost-volume-profit analysis?a. The break-even point will be passed during the period.b. The sales mix is constant.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.
A cost that has characteristics of both a variable cost and a fixed cost is called aa. discretionary costb. sunk costc. mixed costd. variable/fixed cost
The relative distribution of sales among the various products sold by a business is thea. contribution margin mixb. product portfolioc. sales mixd. business"s basket of goods
The three most common cost behavior classifications area. variable costs, product costs, and sunk costsb. fixed costs, variable costs, and mixed costsc. variable costs, period costs, and differential costsd. variable costs, sunk costs, and opportunity costs