Which of the following formulas is not used to calculate the breakeven point?
a. Total fixed costs divided by contribution margin per unit.
b. Total fixed costs divided by (sales price per unit less variable cost per unit).
c. Total fixed costs divided by contribution margin ratio.
d. Total fixed cost divided by total contribution margin.
On January 4th, Stevens Manufacturing received an order for 30 uniforms. The
following information pertained to that order.
Calculate the value-added time.
a. 500 hours
b. 507 hours
c. 502 hours
d. 505 hours
Braxton Manufacturing is considering the purchase of new computerized equipment.
The machine costs $85,000 and would generate $22,000 in annual cost savings over its
5-year life. At the end of 5 years, the equipment would have a $5,000 salvage value.
Braxton’s required rate of return is 12%. The machine’s net present value is nearest
a. ($2,857)
b. ($5,694)
c. $79,306
d. $110,000
If a public utility company wanted to benchmark ways to protect its underground
electrical cables, which of the following companies should they not contact?
a. Telephone company.
b. Wi-Fi company.
c. Another public utility company.
d. Cable television company.
Throughput contribution equals
a. Sales revenue less direct materials cost.
b. Sales revenue less product costs.
c. Direct material plus direct labor.
d. Direct material plus traceable manufacturing overhead.
Which of the following items would be added to net income when using the indirect
method of calculating cash flows provided by operating activities?
a. An increase in accounts payable
b. An increase in prepaid expenses
c. A decrease in accrued revenues
d. A decrease in taxes payable
Moving a company ‘s business processes to a foreign country is referred to as
a. Outsourcing.
b. Offsourcing.
c. Offshoring.
d. Outshoring.
The costs that should be included in an outsourcing decision are the:
a. Fixed costs.
b. Nonrecurring costs.
c. Sunk costs.
d. Relevant costs.
When a company sells equipment for cash, which of the following is the correct
reporting on the statement of cash flows?
a. Gain or loss in operating section, amount of cash received in operating section
b. Gain or loss in operating section, amount of cash received in investing section
c. Gain or loss in investing section, amount of cash received in investing section
d. Gain or loss in investing section, amount of cash received in investing section
Cottonwood, Inc. has the following information regarding its Raw Materials Inventory
account:
What is the beginning balance of Cottonwood’s Raw Materials Inventory account?
a. $31,750
b. $10,750
c. $693,950
d. $661,950
The flexible budget variance for fixed overhead is known as the
a. Static budget variance.
b. Fixed overhead efficiency variance.
c. The fixed overhead volume variance.
d. The fixed overhead spending variance.
Mel Torme, sales manager for Hokque, Inc. has received numerous customer
complaints about the length of time it takes to receive an order. He has gathered the
following information from a recent order to help him understand the issue.
Required
a. Calculate the delivery cycle time for the order.
b. Calculate the manufacturing time for the order.
c. Calculate the value-added time for the order.
d. Calculate the manufacturing cycle efficiency.
For managers to adequately monitor the organization’s performance, they need to use
a. Leading indicators.
b. Lagging indicators.
c. Both leading indicators and lagging indicators.
d. Neither leading indicators nor lagging indicators.
Which of the following budgets uses information from the selling and administrative
expense budget?
a. Pro-forma budget
b. Budgeted income statement
c. Direct materials purchases budget.
d. None of these answer choices are correct.
Under variable costing, subtract variable costs from sales to arrive at
a. Gross profit
b. Gross margin
c. Contribution margin
d. Net income
Sky Mountain Bakery makes doughnuts, cupcakes, and scones that are in high demand
by local restaurants and hotels. Following is information for each of these products:
Sky Mountain has 2,000 machine hours available each month. Demand for each item
exceeds Sky Mountain ‘s capacity to produce the item. In order to maximize the
company ‘s total contribution margin, in what sequence should Sky Mountain fill orders
for the three products?
a. Scones first, then cupcakes, then doughnuts.
b. Doughnuts first, then scones, then cupcakes.
c. Cupcakes first, then doughnuts, then scones.
d. Scones first, then doughnuts, then cupcakes.
Dana owns her own real estate agency. She has been working hard to increase her client
base. She offers the most comprehensive advertising campaign in the city and it has
been paying off by the steady increase in the number of listings over the last several
months. However, Dana is concerned that her extensive cost for advertising is eating
into her profits. It is difficult to determine how much she spends on advertising for each
listing because some of her advertising sources are fixed amounts each month and
others are more variable in nature. She would like to analyze the following information
to determine how her advertising costs behave based on the number of listings.
Using the high-low method, what is the fixed cost of advertising each month?
a.$2,360
b.$2,074
c.$2,900
d.$1,860