Acct. Ch. 20

Under variable costing, which of the following costs would not be included in finished goods inventory? a. wages of machine operator b. steel costs for a machine tool manufacturer c. electricity used by factory machinery d. salary of factory supervisor

d. salary of factory supervisor

The contribution margin ratio is computed as ________. a) contribution margin multiplied by sales b) contribution margin divided by sales c) contribution margin less sales, divided by sales d) None of these choices are correct.

b) contribution margin divided by sales

_________ costs are costs that can be influenced (increased or decreased) by management at a specific level. a) Internal b) External c) Fixed d) Controllable

d) Controllable

Markets can be divided into market segments by ________. a) sales territories b) product lines c)salespersons d) All of these choices are correct.

d) all of these choices are correct

Both fixed and variable factory costs are included as a part of cost of goods sold when accounting for absorption costing.

true

A difference between the planned and actual contribution margin may be caused by an increase or a decrease in ________. a) sales and variable costs b) sales and fixed costs c) variable and fixed costs d) None of these choices are correct.

a. sales and variable costs

Under variable costing, which of the following costs would be included in finished goods inventory? a. neither variable nor fixed factory overhead cost b. both variable and fixed factory overhead cost c. only variable factory overhead cost d. only fixed factory overhead cost

c. only variable factory overhead cost

Under absorption costing, increasing finished goods inventory causes ________. a) operating income to increase b) operating income to decrease c) per-unit product costs to increase d) None of these choices are correct.

operating income to increase

When the units manufactured are greater than the units sold, finished goods inventory ________. a) increases b) decreases c) remains unchanged d) cannot be determined

a. increases

The __________ is the effect of a difference in the number of units sold, assuming no change in unit sales price or unit cost. a) quantity factor b) unit price factor c) sales deviation d) None of these choices are correct.

a. quantity factor

Management should focus its sales and production efforts on the product or products that will provide a. the maximum contribution margin b. the highest sales revenue c. the lowest product costs d. the lowest direct labor hours

a. the maximum contribution margin

Both fixed and variable factory costs are included as a part of cost of goods sold when accounting for variable costing

false

When units manufactured are less than the number of units sold, the variable costing income from operations will be ________ that of absorption costing. a)less than b) greater than c) equal to d) None of these choices are correct

b. greater than

The relative distribution of sales among various products sold is referred to as the: a. by-product mix b. profit mix c. sales mix d. joint product mix

c. sales mix

Under absorption costing, which of the following costs would not be included in finished goods inventory? a. overtime wages paid to factory workers b. hourly wages of assembly worker c. the salaries for salespeople d. straight-line depreciation on factory equipment

c. the salaries for sales people

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the: a. fixed manufacturing costs b. fixed selling and administrative expenses c. variable selling and administrative expenses d. variable cost of goods sold

c. variable selling and administrative expenses

Under variable costing, which of the following costs would not be included in finished goods inventory? a. direct labor cost b. direct materials cost c. fixed factory overhead cost d. variable factory overhead cost

c.fixed factory overhead cost

Which of the following costs are controllable costs for operating management? a) Fixed manufacturing overhead costs b) Salaries of production supervisors c) Factory utilities d) Variable manufacturing costs

d) variable manufacturing costs

For a supervisor of a manufacturing department, which of the following costs are controllable? a. insurance on factory building b. sales salaries c. depreciation of factory building d. direct materials

d. direct materials

Which of the following would not be an appropriate activity base for cost analysis in a service firm? a. customers served b. lawns mowed c. haircuts given d. inventory produced

d. inventory produced