Reference no: EM131787049
Q1. What is a cost whose total amount changes in direct proportion to a change in volume?
mixed cost
fixed cost
irrelevant cost
variable cost
Q2. Which of the following costs is an example of a fixed cost?
delivery costs
salary of plant manager
direct materials
sales commissions
Q3. If production increases by 15%, how will total variable costs likely react?
remain the same
decrease by 15%
increase by 7.5%
increase by 15%
Q4. Which of the following statements is TRUE with respect to fixed costs per unit?
They will increase as production decreases
They will decrease as production decreases
They will remain the same as production levels change
They will increase as production increases
Q5. Canine Company produces and sells dog treats for discriminating pet owners. The unit selling price is $10, unit variable costs are $7, and total fixed costs are $3,300. What are breakeven sales?
$11,000
$4,714
$3,300
$7,700
Q6. Fixed Company produces a single product selling for $30 per unit. Variable costs are $12 per unit and total fixed costs are $4,000. What is the contribution margin ratio?
1.67
2.50
0.40
0.60
Q7. If the sale price per unit is $7, the unit contribution margin is $3, and total fixed expenses are $19,500, what are the breakeven sales in units?
2,786
6,500
5.850
4,875
Q8. Which of the following alternatives reflects the proper order of preparing components of the master budget? (1) financial budget (2) operating budget (3) capital expenditures budget
1, 3, 2
3, 1, 2
2, 3, 1
1, 2, 3
Q9. Operating budgets include all of the following except for one. Which is it?
inventory budget
budgeted income statement
sales budget
budgeted balance sheet
Q10. Heath Company has beginning inventory of 21,000 units and expected sales of 48,000 units. If the desired ending inventory is 15,500 units, how many units should be produced?
27,000
53,000
45,000
42,500
Q11. Janeway Corporation desires a December 31 ending inventory of 1,500 units. Budgeted sales for December are 2,300 units. The November 30 inventory was 850 units. What are budgeted purchases?
3,800
2,350
3,150
2,950
Q12. Martin Company sells a certain product for $15 per unit. The beginning inventory is 40,000 units, and the desired ending inventory is 32,000 units. If budgeted production is 100,000 units, what is the forecasted sales revenue from the product?
$1,380,000
$1,620,000
$1,600,000
$1,500,000
Q13. The preparation of which of the following is the final step in the preparation of the financial budget?
master budget
budgeted income statement
budgeted balance sheet
cash budget
Q14. June sales were $40,000 while projected sales for July and August were $50,000 and $60,000, respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?
$50,000
$44,000
$36,000
$54,000