ACC Midterm Study

A company's contribution margin per unit is $25. If the company increases its activity level from 200 units to 350 units, how much will its total contribution margin increase?

$3,750

A company wants to earn an income of $60,000 after-taxes. If the tax rate is 32%, what must be the company's pre-tax income in order to have $60,000 after-taxes? (Round to the nearest dollar.)

$88,235

A company's product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit?

$90

If a company has fixed costs of $6,000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even?

100

Macom Manufacturing has total contribution margin of $61,250 and net income of $24,500 for the month of June. Marcus expects sales volume to increase by 10% in July. What are the degree of operating leverage and the expected percent change in income for Macom Manufacturing?

2.5 and 25%

If a firm has a contribution margin of $78,090 and a net income of $13,700 for the current month, what is their degree of operating leverage?

5.7

Which of the following statements is true regarding average fixed costs? A)Average fixed costs per unit remain fixed regardless of level of activity. B)Average fixed costs per unit rise as the level of activity rises. C)Average fixed costs per unit fall as the level of activity rises. D)Average fixed costs per unit cannot be determined.

Average fixed costs per unit fall as the level of activity rises

Which of the following would not be classified as manufacturing overhead? A)indirect materials B)indirect labor C)direct labor D)property taxes on factory

Direct labor

Which of the following is not considered a product cost? A)direct materials B)direct labor C)indirect materials D)selling expense

Selling Expense

Which of the following represents the components of the income statement for a service business?

Service Revenue - Operating Expenses = operating income

When a representative of an organization gives money to another business official in order to gain favor and/or manipulate a business decision, this is known as ________.

bribery

Break-even for a multiple product firm can be calculated how?

by dividing total fixed costs by the contribution margin of a composite unit

The Chartered Financial Analyst (CFA) certification:

consists of 3 separate exams that must be taken in succession

When sales price increases and all other variables are held constant, the break-even point will ________.

decrease

When variable costs increase and all other variables remain unchanged, the break-even point will ________.

increase

A process that is often linked to Six Sigma and is designed toward continuous improvement by eliminating waste is ________.

kaizen

Variable costs are expenses that ________.

remain constant on a per-unit basis but change in total based on activity level

When fixed costs increase and all other variables remain unchanged, the contribution margin will ________.

remain unchanged

The controller of a corporation:

reports to the CFO and is in charge of the accounting side of the business

Management accountants help the management of an organization in their planning function through ________.

strategic planning

Managerial accounting produces information:

that is focused on the future

Which of the following is the primary source of revenue for a merchandising business?

the purchase and resale of finished products

In the cost equation Y = a + bx, Y represents what?

total costs