Reference no: EM132537757

Question 1. Contribution Margin is:

A. Gross Profit less Operating Expenses.

B. Sales less Selling and Admin Expenses.

C. Sales less Variable Expenses.

D. Sales less Fixed Expenses. (1 mark)

Question 2. Write the formula of BEP (in units)

Information for Question No. 3 and 4:

The following information regarding ABC Company is available:

Selling price per unit $530

Costs:

Variable Costs per unit $22.20

Fixed Costs $18,000

Question 3. What will be the Contribution Margin per unit (Show workings clearly)

Question 4. What will be the Net Income if the company sells 1,000 unit of its products? (Show workings clearly)

Question 5. Under Absorption Costing System, product cost consists of Direct Material, Direct Labor and variable portion of the Manufacturing Overhead. True or False?

Question 6. Write the Contribution Margin Format of Income Statement

Question 7. Under Variable Costing System, product cost consists of Direct Material, Direct Labor and variable portion of the Manufacturing Overhead. True or False?

Question 8. Gyro Gear Company produces a single product, a special gear used in automatic transmissions.

Each gear sells for $28, and the company sells 500,000 gears each year.

Unit cost data are presented below:

Direct material ............................... $6.00

Direct labor ................................... $5.00

Variable Manufacturing overhead ............ $2.00

Fixed MOH ....................................$7.00

Variable Selling & administrative ............ $4.00

Fixed Selling & administrative ............. $4.00

The unit product cost of gears under variable costing is:

A) $13 B) $20 C) $17 D) $27 (1 mark)

Question 9. Information regarding Activity Pools of TMZ Corporation are as follows:

Total Cost Total Activity

Assembly $313,000 28,000 machine hours

Customer Orders $500,000 15,000 orders

Order Size $174,800 28,000 machine hours

Calculate the Activity Rate (ABC Costing Rate) for the above mentioned Activity Pools.(Show workings clearly)

Question 10. The first budget a company prepares in a master budget is the production budget. True or False?

Question 11. On January 1, Colver Company has 6,500 units of Product A on hand. During the year, the company plans to sell 15,000 units of Product A, and plans to have 5,000 units on hand at year end.

How many units of Product A must be produced during the year?

A) 13,500

B) 16,500

C) 15,000

D) 20,000

Question 12. Write the formula of Operating Leverage