Test 2 BU 211

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If sales volume increases and all other factors remain constant, then the:

margin of safety will increase

In process costing, a separate work in process account is kept for each _________

processing department

A cost-volume profit graph shows the break even point as _________

the intersection of the total sales revenue line and the total expense line

Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be _____________

less than the units started during the period

True or False: Cost structure refers to the relative portion of product and period costs in an organization.

False

True or False: The margin of safety is the excess of break-even sales dollars over budgeted (or actual) sales dollars.

False

True or false: Absorption costing and variable costing always result in the same net operating income each year.

False

True or false: Allocated costs of other service departments are reallocated back to the original service department allocations when using the step-down method.

False

True or false: Knowledge of previous sales is necessary when using incremental analysis to evaluate a change in profits.

False

True or false: Without knowing the future, it is best to have a cost structure with high variable costs.

False

True or False: A cost that can be traced directly to a specific segment should be charged directly to that segment and not allocated to other segments.

True

True or False: Under absorption costing, fixed overhead is treated like a variable cost because a portion of the total cost is allocated to each unit produced, rather than being expensed as one large sum.

True

True or false: A cost reconciliation report using the weighted-average method reports the same information as a cost reconciliation report using FIFO.

True

True or false: The sales mix must be taken into consideration when calculating the break-even point for more than one product due to different selling prices, costs, and contribution margins among the products.

True


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