ACCT overview

A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the company's after-tax income?

$120,000 × .40 = $48,000 tax expense; $120,000 - 48,000 = $72,000

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?

(350-200)*25=3750

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

Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income?

20 40 60 120 (5,000 + 10,000)/250 = 60

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

60%

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?

61,250/24,500=2.5 2.5*100%=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?

78,090/13700=5.7

Which of the following is not a step in the outline for examining ethical issues?

A. Establish the facts of the situation. B. Evaluate each course of action. C. Make a decision. D. Confirm decision with ASB.

Interal users of acct info would not include

A. Manager B. Employees C. Creditors D. Officers D

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

A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Sales Revenue - Cost of Goods Manufactured = gross profit D. Service Revenue - Cost of Goods Purchased = gross profit A

Which of the following terms means knowing how a business is run and how it is influenced by external forces , and knowing and understanding the overall industry ?

A. commercial awareness B. conceptualization C. collaboration D. imagination A

The high - low method and least - squares regression are used by managers to

A. decide whether to make or buy a B. component part C. minimize corporate tax liability D. maximize output E. estimate costs E

Which of the following is not considered a product cost?

A. direct materials B. direct labor C. indirect materials D. selling expense D

Fixed Costs

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

Average fixed costs

Average fixed costs per unit remain fixed regardless of level of activity

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

Ability to work cross-function in order as the team to complete task.

Collaboration

A company's attempts to utilize sustainable business practices with regard to its employees, the environment, and society are known as ________.

Corporate social responsibility

Not internal users

Creditors

During the control function, the measurements taken of the performance must be accurate enough to see

Deviations and variances

Prime Cost

Direct Materials + Direct Labor

Continuous Improvement (Kaizen)

It can be applied only to improve the processes and products but not services and practices

An inventory system that organizations use to increase efficiency and decrease waste is ________.

Just-in-time manufacturing

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

Kaizen

A quality control program that depends on multiple team members for removing waste and diminishing defects within products is

Lean Six Sigma.

Imcome statements

Sales Revenue - Cost of Goods Sold = Gross Profit

Methods of cost estimation relies on only two data pints

The high-low method

The stockholder of the company

The owners

which of the following is the primary source of revenue for a manufacturing business

The provision of intangible goods and services

Not include in product costs

The selling, general, administrative (SG&A) and interest costs of a retailer and/or a manufacturer are not product costs

In the cost equation Y = a + bx, Y represents which of the following?

Total Costs

Conversion costs

Wages of production workers.

external users of accounting information

creditors, investors, government, trading partners, regulatory agencies, international standardization agencies, journalists and internal users are owners, directors, managers, employees of the company.

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

decrease

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

decrease

Management Acct

emphasizes special-purpose info

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

increase

A scatter graph is used to test the assumption that the relationship between cost and activity level is ________.

linear

Variable costs are expenses that ________.

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

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

the primary source of revenue for a merchandising business?

the purchase and resale of finished products