ACC 209 MANAGERIAL ACCOUNTING AND CONTROL Online Quiz 01 (2014)

Instructions This quiz consists of 20 multiple-choice questions. Please read the Online Quiz instructions posted under L01 “Announcement” before attempting. Please note that backtracking is NOT allowed for this quiz.Select the statement that is true.
Answer
1. If fixed costs decrease while variable cost per
unit remains constant, breakeven sales will increase.
2. If fixed costs
increase while variable cost per unit remains constant, the new contribution
margin in relation to the old will be unchanged.
3.If fixed costs increase while variable cost per
unit remains constant, unit contribution margin will increase.
4.If fixed costs decrease while variable cost per
unit remains constant, unit contribution margin will increase.
5. If fixed costs increase while variable cost per
unit remains constant, breakeven sales will decrease.
If a company desires to increase its safety
margin, it should:
increase fixed costs.
stimulate sales
volume.
decrease selling prices, assuming the price change
will have no effect on demand.
attempt to raise the break-even point.
decrease the contribution margin.
The selling price was $10 per unit and
variable cost $6 per unit. If the price is increased to $12 per unit,
Answer the breakeven level of sales decreases by
20 percent.
the breakeven level
of sales decreases by 33 1/3 percent.
the breakeven level of sales decreases by 66 2/3
percent.
the breakeven level of sales decreases by 50
percent.
None of the listed choices.
A major assumption underlying
cost-volume-profit analysis is that
fixed costs may change in the relevant range.
variable costs are curvilinear.
costs and revenues
are linear.
None of the listed choices.
revenues increase at a decreasing rate
At a volume of 20,000 units, Zebt Ltd
reported sales revenues of $4,000,000, variable costs of $1,200,000, and fixed
costs of $1,040,000. The company’s contribution margin per unit is:
$140.
$148.
$88.
$112.
None of the listed choices
Gross margin is considered to be:
all revenues less
cost of goods sold.
none of the listed choices.
all revenues plus costs which change with respect
to an output-related driver.
all revenues less costs which do not change with
respect to an output-related driver.
the same as the contribution margin.
Sroniz Ltd sells a product for $70 per unit
and the variable production and sales costs are $42 per unit. If the company
adopts a 40 percent increase in selling price of its product, how much can unit
sales decline before total profits decline?
100 percent.
None of the listed choices.
50 percent.
40 percent.
57 percent.
A recent income statement of Hilite Ltd
reported the following data:
Sales revenue: $10,000,000
Variable costs: $6,000,000
Fixed costs: $3,200,000
If these data are based on the sale of 5,000
units, the break-even sales would be:
$40,000,000.
$8,824,000.
None of the listed choices
$10,000,000.
$8,000,000.
Production costs of plastic chairs are
given by the equation Y = $20,000 + $2.60X. If 9,500 plastic chairs are
manufactured,
unit cost is computed as: 9,500/$20,000 +
$2.60
the expected total
cost is $44,700
total unit cost is $2.60 per unit
variable cost of production is $20,000
None of the listed choices
A recent income statement of CBA Ltd
reported the following data:
Sales revenue: $16,000,000
Variable costs: $10,000,000
Fixed costs: $4,400,000
If these data are based on the sale of 20,000
units, the contribution margin per unit would be:
$300.
$80.
None of the listed choices.
$720.
$580.
A product has a selling price of $20 per
unit and a variable cost of $12 per unit. The effect of a $1 per unit decrease
in variable cost is to
Answer reduce the breakeven point in units but not
in dollars.
decrease the
breakeven point in units and dollars.
reduce the profit margin at the breakeven point.
None of the listed choices.
increase profit at the new breakeven point.
Gnide Ltd, which has excess capacity,
received a special order for 4,000 units at a price of $30 per unit. Currently,
production and sales are anticipated to be 10,000 units without considering the
special order. Budget information for the current year follows.
Sales: $380,000
Less: Cost of goods sold: $290,000
Gross profit: $90,000
Cost of goods sold includes $60,000 of fixed
manufacturing cost. If the special order is accepted, the company’s income will:
Answer change by some other amount.
decrease by $4,000.
increase by $4,000.
decrease by $28,000.
increase by
$28,000.
Sealz Ltd sells a single product for $200.
Variable costs are 60% of the selling price, and the company has fixed costs
that amount to $1,600,000. Current sales total 16,000 units. Sealz Ltd:
Answer will break-even by selling 1,000,000 units.
will break-even by
selling 20,000 units.
will break-even by selling 13,333 units.
cannot break-even because it loses money on every
unit sold.
will break-even by selling 8,000 units.
SLPW LTD makes two products.Soap liquid and
polish wax operating infornmation from the previous year follows:

Soap liquid polish wax
unit produced and sold 5,000 4,000
machine hours used 5,000 2,000
sales price per unit $28 $40
variable cost per unit $16 $32
Fixed costs of $80,000 per year are currently allocated
equally between bothproducts.If the products mix were to change total fixed
cost would remain the same.
the contribution margin per machine hour for
polish wax is
Answer $20.00.
$8.00.
$1.00.
$80.00.
$16.00.
Melionz Ltd manufactures batons. It can
manufacture 300,000 batons a year at a variable cost of $1,500,000 and a fixed
cost of $900,000. Based on the company’s predictions, 240,000 batons will be
sold at the regular price of $10 each. In addition, a special order was
received for 60,000 batons to be sold at a 40 percent discount off the regular
price. By what amount would profit before tax be increased or decreased as a
result of the special order?
Answer $60,000 decrease.
$60,000 increase.
$72,000 increase.
$120,000 increase.
None of the listed choices.
PBM LTD HAS 31,000 LABOUR HOURS AVALIABLE
FOR PRODUCING PRODUCT m AND PRODUCT N.CONSIDER THE FOLLOWING INFORMATION:
PRODUCTION M PRODUCT N
rEQURIED LABOUR TIME PER UNIT (HRS) 2 3
MAXIMUM DEMAND(UNITS) 6500 8,000
CONTRIBUTION MARGIN PER LABOR HOUR $ 5.00 $3.80

iF pbm ltd follows proper maanagerial accounting
practies in terms of setting a production schedule,how much contrbution margin
would the company expect to generate?
$156,200.
None of the listed choices.
$126,200.
$133,400.
$62,900.
Select the statement that is true.
Answer A cost that seldom has any use in
evaluating make or buy decisions is a fixed cost.
A profit that must
be foregone on one alternative when another alternative is selected is called
an opportunity cost.
A cost incurred in the past and hence irrelevant
for current decision making is an incremental cost.
A cost incurred in the past and hence irrelevant
for current decision making is a discretionary cost.
A profit that must be foregone on one alternative
when another alternative is selected is called a discretionary cost.