APU ACCT300 week 6 quiz Winter 2014

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ACCT300 week 6 quiz
Question 1 of 20
The theory of constraints is a manufacturing strategy that focuses on reducing the influence of bottlenecks on production processes.
A. True
B. False

Question 2 of 20
In attempting to improve profitability when faced with a bottleneck related to hours that is involved in the production of two or more products, which of the following is most important for management to consider?
A.Contribution margin per unit for each product
B.Time required for each different product passing through the bottleneck
C.Selling price or sales revenue generated by each product produced through the bottleneck
D.Contribution margin per bottleneck hour for each product

Question 3 of 20
The amount of income that would result from an alternative use of cash is called:
A.differential income.
B.sunk cost.
C.differential revenue.
D.opportunity cost.

Question 4 of 20
Costs that remain constant on a per-unit level as the level of activity changes are called:
A.fixed costs
B.mixed costs.
C.opportunity costs.
D.variable costs.

Question 5 of 20
The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed as contribution margin ratio.
A. True
B. False

Question 6 of 20
Which of the following activity bases would be the most appropriate for food costs of a hospital?
A.Number of cooks scheduled to work
B.Number of x-rays taken
C.Number of patients who are admitted in the hospital
D.Number of scheduled surgeries

Question 7 of 20
A firm operated at 90% of capacity for the past year during which fixed costs were $320,000, variable costs were 60% of sales, and sales were $1,200,000. Operating profit was:
A.$480,000.
B.$112,000.
C.$144,000.
D.$160,000.

Question 8 of 20
In cost-volume-profit analysis, all costs are classified into the following two categories:
A.mixed costs and variable costs.
B.sunk costs and fixed costs.
C.discretionary costs and sunk costs.
D.variable costs and fixed costs.

Question 9 of 20
When a business sells more than one product at varying selling prices, the business’s break-even point can be determined as long as the number of products does not exceed:
A.two.
B.three.
C.fifteen.
D.there is no limit.

Question 10 of 20
If fixed costs are $250,000, the unit selling price is $105, and the unit variable cost is $65, what I the break-even sales (in units)?
A.6,250 units
B.2,381 units
C.10,000 units
D.3,846 units

Question 11 of 20
Soap Company manufactures Soap X and Soap Y and can sell all it can make of either. Hours available to produce the products is the constrained resource. Based on the following data, which statement is true? Soap X: sales price is $20; variable cost is $14; and hours needed to process is 3. Soap Y: sales price is $25; variable cost is $15; and hours needed to process is 5.
A.X is more profitable than Y.
B.Y is more profitable than X.
C.Neither X nor Y have a positive contribution margin.
D.X and Y are equally profitable.

Question 12 of 20
Cost-volume-profit analysis can be presented in both graphically and equation form.
A. True
B. False

Question 13 of 20
Cost-volume-profit analysis can be presented in both graphically and equation form.
A. True
B. False

Question 14 of 20
The relative distribution of sales among the various products sold by a business is termed as:
A.business’s basket of goods.
B.contribution margin mix.
C.sales mix.
D.product portfolio.

Question 15 of 20
In cost-volume-profit analysis, all costs are classified into the following two categories:
A.mixed costs and variable costs.
B.sunk costs and fixed costs.
C.discretionary costs and sunk costs.
D.variable costs and fixed costs.

Question 16 of 20
The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed:
A.manufacturing margin.
B.contribution margin.
C.differential cost.
D.differential revenue.

Question 17 of 20
The product cost concept includes the selling and administrative expenses in the cost amount to which the markup is added to determine product price.
A. True
B. False

Question 18 of 20
The product with the highest contribution margin per scarce resource is the most profitable.
A. True
B. False

Question 19 of 20
When a business sells more than one product at varying selling prices, the business’s break-even point can be determined as long as the number of products does not exceed:
A.two.
B.three.
C.fifteen.
D.there is no limit.

Question 20 of 20
If fixed costs are $300,000 and variable costs are 70% of break-even sales, profit is zero when sales revenue is $1,000,000.
A. True
B. False

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