1.accounting information to make decisions within the company that affect its operations.
A:
2. A company sells two models of chairs — a standard model and a deluxe model. The standard model sells for $100 and has a variable cost of $60 per unit. The deluxe model sells for $150 and has a variable cost of $75 per unit. Fixed costs are $180,000 per month. The sales mix is 60% standard model and 40% deluxe model. What is the contribution margin (CM) ratio for the company?
A: 51.4%
3. A company produces bicycles. Last year, the company produced 50,000 bicycles and raw materials cost totaled $1,200,000 for the year. If the company produced 60,000 bicycles this year and spent $1,500,000 on raw materials, what was the raw material price variance?
A: $60,000 (unfavorable)
4. Revenue is recognized at the point of order receipt rather than delivery of a product under accrual-basis accounting.
A: False
5. A company has budgeted $100,000 in manufacturing overhead costs for 10,000 machine hours. At the end of the month, only 7,500 machine hours were actually used and $87,500 in overhead costs were incurred. What is the overhead cost spending and volume variance in dollars?
A: $25,000 (unfavorable)
6. A company produces and sells 100,000 units. The unit selling price is $5 and the variable cost is $1 per unit. Fixed expenses total $300,000 per year. What is the company’s breakeven point in unit sales?
A: 75,000 units
7. A company sold 40,000 products last year when variable manufacturing costs were $5 per unit. Fixed manufacturing overhead was $200,000. This year 50,000 products were budgeted to be sold with variable manufacturing costs budgeted at $4 per unit. If $235,000 in fixed manufacturing overhead was actually incurred, what was the flexible budget variance?
A: $35,000 (unfavorable)
8. Material purchased but not yet converted into a finished product by the manufacturer is considered
A:
9. The cost of goods sold calculation includes all manufacturing costs incurred during the accounting period.
A: False
10. Since costs behave differently, accountants divide costs into variable and
A:
