exam 1 review

The accounting records of Dixon Company revealed the following costs: direct materials used, $260,000; direct labor, $435,000; manufacturing overhead, $376,000; and selling and administrative expenses, $220,000. Dixon's product costs total:

1,071,000

Guaranteed Appliance Company produces washers and dryers in an assembly-line process. Recnt labor costs included the following: corporate executives, $575,000; assembly-line workers, $197,000; security guards, $57,000; and plant supervisor, $147,000. The total of Guaranteed's direct labor cost was:

197,000

Which of the following calculations can be used to measure a company's degree of operating leverage?

Contribution margin / income

Which of the following occurs if a company was able to reduce its variable cost per unit?

Contribution margin increases, break-even point increases

In a manufacturing plant, which is an example of indirect labor

Plant manager

Grandma Gifts had the following costs in March when 400 ceramic statues were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500. Which of the following costs will stay the same assuming that production changes to 500 units and production still remains within the relevant range?

Variable cost per unit

A 25% increase in production volume will result in:

a 25% increase in total variable costs

All of the following entities would have a need for managerial accounting information except:

all entities would use managerial accounting

Period costs are:

always recorded as an expense

Tyson Company has an operating leverage factor of 5. Which of the following statements is true?

an 8$ change in sales revenue should result in a 40% change in income

When determining the cost of a manufactured product, a factory janitor's wages would be classified as:

an indirect cost

Where would period costs be found on the financial statements?

as operating expenses on the income statement in the period incurred

Break-even for a multiple product firm ________.

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

The amount of a unit's sales price that helps to cover fixed expenses is its ________.

contribution margin

Which of the following is NOT a period cost?

direct labor expenses

Which of the following is not an ethical standard of managerial accounting?

efficiency

Which one of these is not one of the five supporting objectives of managerial accounting?

focus on activities that occur at the top level of the organization

Managerial accounting:

focuses primarily on the needs of personnel within the organization

A manager who wants to determine the percentage impact on income of a given percentage would multiply the percentage increase/decrease in sales revenue by:

operating leverage factor

The salary that is sacrificed by a college student who pursues a degree full time is a(n):

opportunity cost

Which of the following statements is correct concerning product costs?

product costs are expensed in the period the related product is sold

When manufacturing products, direct labor and direct materials are classified as:

product costs, and expensed when the goods are sold

Fixed costs are costs that:

remain constant as activity changes

If a company desires to increases its safety margin, it should:

stimulate sales volume

If a company experiences a decrease in fixed costs, which of the following would occur?

the break even point would decrease

If a company experiences an increase in its fixed costs, which of the following would occur?

the break-even point would increase

The relevant range is defined as:

the range of activity in which management of a company expects to operate

When determining the cost of a manufactured product, a salesperson's salary would be classified as:

a period cost

Rent on a factory building would be considered to be:

a product cost

All other things being equal, a company that sells multiple products should attempt to structure its sales mix, so the greatest portion of the mix is composed of those products with the highest:

contribution margin

Which of the following does not typically appear on an income statement prepared by using a traditional format?

contribution margin

Which of the following would occur if a company increased its variable cost per unit?

contribution margin decreases, break even point increases

The contribution income statement differs from the traditional income statement in which of the following ways?

cost-volume-profit relationships can be analyzed more easily from the contribution income statement

Which of the following does not typically appear on a contribution income statement?

gross margin

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

increase

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

increase

Which of the following are classified as manufacturing overhead?

indirect labor and indirect materials

As activity decreases, unit variable cost:

remains constant

Manufacturing overhead includes all of the following except:

research and development expenses

The difference between budgeted sales revenue and break-even sales revenue is the:

safety margin

Operating leverage predicts the effects fixed costs have on changes in operating income when:

sales volume changes

Which of the following is an example of overhead in a factory?

wages of factory maintenance personnel

When determining the cost of a manufactured product, the cost of lighting the factory would be classified as:

an indirect cost

If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-even point will ________.

increase because the per composite unit contribution margin will decrease

Cost structures differ widely among industries and among firms within an industry.

true