Accounting Exam 5-9
The sales budget often includes a schedule of expected cash collections
true
Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.
False
IN activity based costing, nonmanufacturing costs are not assigned to products.
False
Incremental analysis is generally the most complicated and least direct approach to decision making.
False
ON a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point.
False
One assumption in CVP analysis is that the number of units produced and sold does not change.
False
One way to compute the total contribution margin is to deduct total fixed expenses from net operating income.
False
Organization-sustaining overhead costs should be allocated to products just like unit-level and product-level activities.
False
Planning involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change.
False
Product-level activities relate to how many batches are fun or units of product are made.
False
In business, a budget is a method for putting a limit on spending.
False/True ?
The budgeted selling and administrative expense is calculated by multiplying the budgeted unit sales by the selling and admin expense per unit
False
The costs of idle capacity should be assigned to products in activity-based costing
False
The manufacturing Overhead budget is typically prepared before the production budget.
False
The margin of safety in dollars equals the excess of actual sales over budgeted sales.
False
The overall contribution margin ratio for a company producing three products may be obtained by adding the contribution margin ratios for the three products and dividing the total by three.
False
only variable manufacturing overhead costs are included in the manufacturing overhead budget
False
Activity based management seeks to eliminate waste by allocating costs to products that waste resources.
False
Activity rates in activity based costing are computed by dividing costs from the second-stage allocations by the activity measure for each activity cost pool.
False
In companies that do not have "no lay off" policies, the total direct labor cost for a budget period is computed by multiplying the total direct labor hours needed to make the budgeted output of completed units by the direct labor wage rate.
True
Self-imposed budgets prepared by lower-level managers should be scrutinized by higher levels of management
True
The manufacturing overhead budget lists all cost of production other than selling and administrative expenses
false
All other things the same, an increase in variable expense per unit will reduce the break-even point.
False
A self imposed budget is a budget that is prepared with the full cooperation and participation of managers at all levels.
True
Activity-based costing involves a two-stage allocation in which overhead costs are first assigned to departments and then to jobs.
True
At the break-even point, the total contribution margin and fixed expenses are equal.
True
In activity-based costing, some manufacturing costs can be excluded from product costs.
True
Reynold Enterprises sells a single product for $25. The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. The company's net operating income will increase by $10 if one more unit is sold.
True
The unit sales volume necessary to reach a target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin per unit.
True
