Acc505 Managerial Accounting: Week 4 Study Guide


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Acc505 Managerial Accounting                                                        

Week 4 Midterm Study Guide

1. (TCO A) advertising costs is a (Points : 6)

 Conversion YES… Period NO.

 Conversion YES …. Period YES.

 Conversion NO…. Period YES.

 Conversion NO…. Period NO.


2. (TCO A) Fixed costs expressed on a per-unit basis (Points : 6)

 will increase with increases in activity.

 will decrease with increases in activity.

 are not affected by activity.

 should be ignored in making decisions because they cannot change.


3. (TCO A) Property taxes on a company’s factory building would be classified as a(n) (Points : 6)

 sunk cost.


 period cost.

 variable cost.

 manufacturing overhead cost.


4. (TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following? (Points : 6)

 Fixed costs per unit increase and variable costs per unit increase.

 Fixed costs per unit decrease and variable costs per unit do not change.

 Fixed costs per unit do not change and variable costs per unit do not change.

 Fixed costs per unit do not change and variable costs per unit increase.


5. (TCO F) When manufacturing overhead is applied to production, it is added to (Points : 6)

 the Cost of Goods Sold account.

 the Raw Materials account.

 the Direct Labor account.

 None of the above


6. (TCO F) A job-order cost system is employed in those situations where (Points : 6)

 production is aimed at filling a specific customer order

 manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.

 the product moves from department to department before being completed.

 the unit cost of production is computed by dividing the total production costs by the number of units produced.


7. Which of the following companies is most likely to use a process costing system? (Points : 6)

 A law office

 A custom home builder

 A car repair business

 A food manufacturer


8. (TCO B) The contribution margin ratio always increases when the (Points : 6)

 break-even point increases.

 break-even point decreases.

 variable expenses as a percentage of net sales decrease.

 variable expenses as a percentage of net sales increase.


9. (TCO B) Which of the following would not affect the break-even point? (Points : 6)

 Number of units sold

 Variable expense per unit

 Total fixed expenses

 Selling price per unit


10. (TCO E) Under variable costing (Points : 6)

 net operating income will tend to move up and down in response to changes in levels of production.

 inventory costs will be lower than under absorption costing.

 net operating income will tend to vary inversely with production changes.

 net operating income will always be higher than under absorption costing.