Do wn l o a d Question 3 If a company increases its xed costs for Product Z, then the contribution margin per unit will Remain the same Decr ease I n c r e a s e I nc ompl et ei nf or mat i on
Que s t i on4
Whenpr oduc t i onl e v el sar ee xpec t edt oi nc r eas ewi t hi nar el e v antr ange,andafl ex i bl ebudge ti s us ed,whateff ec twoul dbeant i c i pat edwi t hr es pec tt oeac hoft hef ol l o wi ngc os t s ? Fi x edc os t speruni t Var i abl ec os t speruni t Noch ange Nocha nge Decr ease Nochange Nochange Decr ease Decr ease Decr ease Que s t i on5
WangCompan ypr o vi dest hef ol l owi ngi nf or mat i onf ort hei rfi r s ty earofoper at i on:
Sales
5,000 units !"0
Selling and administrati#e costs$ %i %ixed
!",000
&ariable
!" per unit
&ariable production costs per unit$ 'irect materials
!(
'irect labor
!(
&ariable o#erhead
!"
%ixed factory o#erhead
!),500
Production
),500 units
"* If +ang uses #ariable costing, operating income would be$ !"",500 !",000 !"-,500 !(0,000 Question 6 .he management management of /had /had ngineering ngineering Ser#ices Ser#ices has been been approached approached about purchasing purchasing a new management information system* .he percei#ed ad#antages of the system include each of the following, except$ .he new system will will reduce confusion by doing away with with dual presentation presentations s of information by line item and ob1ect of expenditure* .he new system will will enable customi2ed customi2ed business business dashboards, dashboards, with with each execu executi#e ti#e ha#ing real3time reports of critical business information* .he new system will will enable automatic automatic preparation preparation of both internal internal #ariable costing costing information and external absorption costing information* .he new system will will facilitate disaggregat disaggregation ion of o#erall results results into business segment segment information* Question 7 Stric4land ompany prepared segment information relati#e to its o6ce furniture manufacturing di#ision* .he controllable contribution margin di7ered from the segment margin by !"00,000* .his amount corresponds to the$ .otal . otal #ariable costs* ontrollable xed costs* 8ncontrollable xed costs* 9on3traceable costs* Question 8 :a#eric4 orporation had four operating segments* Information for each segment is included in the following table* :a#eric4 has a threshold rate of return of );* +hich segment has the largest residual income<
Segmen t/
Segmen t=
Segmen t
Segment '
!"00,00 0
!(00,00 0
!?00,00 0
!00,00 0
>perating Income
>perating /ssets
!(00,00 0
!?00,00 0
!?00,00 0
!5,000,0 00
"* Segment / Segment = Segment Segment ' Question 9 +hich of the following decisions in#ol#e di7erential analysis< .he decision decision by 8ni#ersity 8ni#ersity to drop drop its intercollegiat intercollegiate e football program program .he decision decision to close a segment of a business business .he decision decision by a record record store store to add #ideotapes #ideotapes to the the product product line* /ll of the abo#e* Question 10 %ixed costs are !@0,000, #ariable cost per unit is !"*A0, and budgeted units of output are (00,000 units* 'etermine the budgeted production costs* !?-0,000 !50,000 !",000 !50,000 Questions 11 and 12 are based on the following information: /nderson nterprises incurred the following costs while producing 500 units$ direct materials, !"5 per unitB direct labor, !?)*50 per unitB #ariable manufacturing o#erhead, !((*50 per unitB total xed o#erhead costs, !"5,000B #ariable selling and administrati#e costs, !)*50 per unitB total xed selling and administrati# administrati#e e costs, !"",(50* Question 11 +hat is the per unit product cost using #ariable costing< !"05 per unit !A(*50 per unit !)5 per unit !"?5 per unit Question 12 +hat is the operating income using #ariable costing if 50 units are sold for !"50 each< !,"(5 !),500 !)50 !?,)50 Question 13 Production costs Cincluding !?0,000 of xed costsD are budgeted at !"50,000 for an expected output of "00,000 units* /ctual output was @0,000 units, while actual costs were !"(,500* !"(,500* +hat is the budget #ariance and is it fa#orable or unfa#orable* !,500 unfa#orable !-,500 fa#orable !5,500 unfa#orable !,500 fa#orable Question 14 Information technology technology has made it easier for managers to perform all of the following tas4s except ombining indi#idual unitsE budgets into the companywide budget* Remo#ing budgetary slac4 from the budget*
Sensiti#ity analyses Preparing performance reports that identify #ariances between actual and budgeted re#enues and costs* Use the following information to answer questions 1 and 16* 16 * Suppose /ma2on sells ",000 hardco#er boo4s per day at an a#erage price of !"5* /ssume that /ma2onEs cost for the boo4s is )5; of the selling price it charges retail customers* /ma2on has no beginning in#entory, but it wants to ha#e a three3day supply of ending in#entory* /ssume that selling and administrati#e expenses are !500 per day* Question 1 ompute /ma2onEs budgeted sales for the next Cse#en3dayD wee4* !)A,)50 !"0A,500 !("),500 !"05,000 Question 16 'etermine /ma2onEs budgeted purchases for the next Cse#en3dayD wee4* !"50,000 !""(,500 !)A,)50 !?),500 Question 17 .he budgeted budgeted statement statement of cash cash Fows is part part of which element of the master master budget< budget< .he nancial nancial budget .he operating operating budget .he capital expenditur expenditures es budget budget 9one of the abo#e Question 18 .he =est buy company had the following re#enue re#enue o#er o#er the past past three three years$ (00) !?00,000 (00A !?50,000 (00@ !50,000 .o . o forecast re#e re#enues nues for (0"0, =est =uy ompany uses uses the a#erage for the past three years* .he companyEs brea4e#en re#enue is !00,000 per year* +hat is =est buy predicted margin of safety for (0"0 !00,000 !0 !"00,000 !50,000 Question 19 If a company increases its selling price per unit for Product /, the new brea4e#en point will Remain the same 'ecrease Increase 9one of the abo#e Question 20 Straight3line depreciation depreciation on a company truc4 is a &ariable cost* %ixed %ix ed cost c ost :ixed cost Gigh3low cost
!"#$ 2 Question 1 Hacob 'a#is recent recently ly graduated graduated from medical medical school* Ge Ge is considering considering opening opening his own family practice doctor o6ce* / doctorEs o6ce is a high3xed cost business, as it reuires considerable expenditures for facilities, labor, and euipment, no matter how many families are ser#ed* /ssume the annual xed cost of operations is !00,000* %urther assume that the only signicant #ariable cost relates to patients ser#ed* /n a#erage patient ser#ed costs !(50* HacobEs ban4er has as4ed a #ariety of uestions in contemplation contemplat ion of pro#idin pro#iding g a loan for this business* #equirements: If the a#erage family is charged !)5 for ser#ices, how many families must be ser#ed to clear the brea43e#en point< If the ban4er belie#es Hacob will only ser#e ",000 families during the rst year in business, how much will the business lose during its rst year of operation< If Hacob belie#es his prots will be at least !"00,000 during the rst year, how much is he anticipating for total re#enue< .he ban4er ban4er has suggested suggested that that Hacob can can reduce reduce his xed xed costs by !"00,000 if he he will not purchase certain euipment* Hacob can instead lease or rent this euipment as needed* .he #ariable cost of leasing this euipment is !55 per family ser#ed* +ill this suggestion help Hacob reach the brea43e#en point sooner< Question 2 arpet lean manufactures a chemical cleaner* .he company was formed during the current year* /s a result, there was no beginning in#entory* :anagement is e#aluating performance and in#entory management issues, and desires to 4now both net income and ending in#entory under generally accepted accounting principles Cabsorption costingD as well as #ariable costing methods* Rele#ant facts are as follows$ Selling price per gallon !""*00 &ariable manufacturing cost per gallon !(*00 &ariable SJK/ costs per gallon !(*(5 %ixed %ix ed manufactu manufacturing ring costs !(,@00,000 %ixed %ix ed SJK/ !)0,000 .otal . otal gallons produced produced ",-(5,000 .otal . otal gallons sold sold ",500,000 #equirement: Prepare income statements based on the absorption costing and #ariable costing methods*