Question

Which of the following contribution margin ratios would be the best, in terms of needing to sell fewer products to cover the fixed expenses?

Group of answer choices

30%

25%

15%

20%

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Question 223 pts

Western Industries determines their predetermined overhead rate based on direct labor hours. Which of the following is the formula they would use to calculate their predetermined overhead rate?

Group of answer choices

Actual estimated MOH for the year/Total estimated direct labor hours for the year

Total estimated MOH for the year/Total estimated direct labor hours for the year

Actual estimated MOH for the year/Total actual direct labor hours for the year

Total estimated MOH for the year/Total estimated machine hours for the year

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Question 233 pts

Which of the following would typically be considered a “mixed” cost?

Group of answer choices

Utilities

Direct labor cost

Rent on the factory building

Direct materials cost

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Question 243 pts

Which of the following terms would be found exclusively on the contribution margin income statement (rather than on the traditional income statement seen in financial accounting)?

Group of answer choices

Contribution Margin

Cost of Good Sold

Sales

Gross Margin

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Question 253 pts

The total applied MOH for Causeway Manufacturing Company this year is $182,000. At the end of the year, the actual MOH is $189,000. We would say the MOH is:

Group of answer choices

under-applied by $7,000

under-applied by $189,000

over-applied by $189,000

over-applied by $7,000

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Question 263 pts

Pure Wood BookCase Company sells their product for $500. The unit variable cost to make one of their bookcases is $300. The contribution margin ratio is:

Group of answer choices

20%

40%

50%

30%

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Question 273 pts

Data concerning Howell Enterprises’ single product appear below:

Selling price per unit..........................$200

Variable expense per unit....................$70

Fixed expenses per month.........$559,000

To attain a target profit of $14,000, they need to sell approximately:  

Group of answer choices

4,408 units

8,186 units

2,865 units

5,153 units

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Question 283 pts

The purpose of using a variable costing income statement instead of the traditional format financial income statement includes all of the following except:

Group of answer choices

It is the income statement format required by the SEC for the annual report

It is used internally by management and not issued outside of the company

It helps management see the costs over which they have more control for decision-making

It is easier to use to break-even analysis

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Question 293 pts

In terms of cost behavior, which of the following terms will both stay the same within the relevant range?

Group of answer choices

Total fixed cost and unit variable cost

Unit fixed cost and unit variable cost

Total fixed cost and total variable cost

Unit fixed cost and total variable cost

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Question 303 pts

Somerset Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, the break-even point in sales dollars will be:

Group of answer choices

$14,400

$16,000

$24,000

$9,600

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Question 313 pts

In the definition of manufacturing costs, which of the following is considered prime costs?

Group of answer choices

direct materials and direct labor costs

selling costs and production costs

direct labor and manufacturing overhead costs

the contribution margin ratio

Answer 1

1. Option A Breakeven sales = Fixed cost/Contribution margin ratio Being a Denominator in the formula higher contribution margin ratio reduces the sales needed for Breakeven

223. Option B Predetermined overhead rate = Estimated overhead/Estimated direct labor hours

233. Option B Direct labor cost and direct materials cost are variable costs. Rent on factory building is a fixed cost. Utilities generally has both the features of variable and fixed cost.

243. Option A Contribution margin is the excess of sales revenue over variable costs. Hence it is only found on variable costing income statement.

.

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