ACCT 116 Exam (Chp 5, 6, 7 & 9)

Which of the following organizations is not likely to use budgets?

None of the other answers are correct, because all are likely to use budgets.

Of the following organizations, activity-based costing (ABC) cannot be used by:

None of these are correct, as all these organizations can use ABC.

Successful adoptions of activity-based costing typically occur when companies rely heavily on:

multidisciplinary project teams.

Activity-based costing systems:

often reveal products that were under- or over-costed by traditional costing systems.

A company that desires to lower its break-even point should strive to:

reduce variable costs.

A manufacturing firm would begin preparation of its master budget by constructing a:

sales budget

The unit contribution margin is calculated as the difference between:

selling price and variable cost per unit.

A cost that has both a fixed and variable component is known as a:

semivariable cost

A mixed cost is also known as a:

semivariable cost

Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:

semivariable cost

The break-even point is that level of activity where:

total revenue equals total cost

The contribution-margin ratio is:

unit contribution margin divided by the selling price.

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as:

master budget

Which of the following would depict the logical order for preparing (1) a production budget, (2) a cash budget, (3) a sales budget, and (4) a direct-labor budget?

3,1,4,2

The following tasks are associated with an activity-based costing system: 1— Assignment of cost to products 2— Calculation of pool rates 3— Identification of cost drivers 4— Identification of cost pools Which of the following choices correctly expresses the proper order of the preceding tasks?

4,3,2,1

When determining customer profitability, activity-based costing can be used to analyze:

All of the answers are correct.

Which of the following expressions can be used to calculate break-even sales revenue with the contribution-margin ratio (CMR)?

Fixed costs divided by CMR

Consider the following statements about budgetary slack: I. Managers build slack into a budget so that they stand a greater chance of receiving favorable performance evaluations. II. Budgetary slack is used by managers to guard against uncertainty and unforeseen events. III. Budgetary slack is used by managers to guard against dollar cuts by top management in the resource allocation process. Which of the above statements is (are) true?

I, II, and III

What type of cost exhibits the behavior shown below? Manufacturing Volume (Units) Cost Per Unit 50,000 $1.95 70,000 1.95

Variable cost

Which of the following costs changes in direct proportion to a change in the activity level?

Variable cost