ACCT 211 CH. 5-6 Final

To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used? Multiple Choice (Fixed expenses + Target net profit)/Total contribution margin (Fixed expenses + Target net profit)/Contribution margin ratio Fixed expenses/Contribution margin per unit Target net profit/Contribution margin ratio

(Fixed expenses + Target net profit)/Contribution margin ratio Correct

Under the weighted-average method, the cost of units transferred out of a department is computed as follows for a cost category: Multiple Choice Costs added during the period + Cost of beginning work in process inventory Units transferred to the next department × Cost per equivalent unit Units in ending work in process inventory × Cost per equivalent unit Cost of ending work in process inventory − Cost of beginning work in process inventory

Units transferred to the next department × Cost per equivalent unit

If sales volume increases and all other factors remain constant, then the: Multiple Choice contribution margin ratio will increase. break-even point will decrease. margin of safety will increase. net operating income will decrease.

margin of safety will increase.

In process costing, a separate work in process account is kept for each: Multiple Choice individual order. equivalent unit. processing department. cost category (i.e., materials, conversion cost).

processing department.

In the cost reconciliation report under the weighted-average method, the "Total cost accounted for" equals: Multiple Choice Cost of beginning work in process inventory + Cost of units transferred out Cost of beginning work in process inventory + Cost of units transferred in Cost of ending work in process inventory + Cost of units transferred out Cost of ending work in process inventory + Cost added to production during the period

Cost of ending work in process inventory + Cost of units transferred out

Mossfeet Shoe Corporation is a single product firm. The company is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the following items for next year? Contribution Margin Ratio Break-even Point A) Increase Decrease B) Decrease Decrease C) Increase No effect D) Decrease No effect

Choice A

When computing the cost per equivalent unit, the weighted-average method of process costing considers: Multiple Choice costs incurred during the current period only. costs incurred during the current period plus cost of ending work in process inventory. costs incurred during the current period plus cost of beginning work in process inventory. costs incurred during the current period less cost of beginning work in process inventory.

costs incurred during the current period plus cost of beginning work in process inventory.