Test 3_Answer - 1 An example of a financing activity on the...

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1. An example of a financing activity on the statement of cash flows is payment of cash dividends. T 2. A cash payment of accounts payable does not affect stockholders’ equity. T 3. Depreciation expense is not a source of cash. T 4. Understanding relations between costs and their cost drivers allows managers in all types of organizations to make proper short-run marketing decisions. T 5. Target sales volume in units = (variable expenses + target net income) / unit contribution margin. F 6. A good example of a cost driver for production supervisor salaries is the number of people supervised. T 7. A fixed cost changes in direct proportion to changes in a cost driver. F 8. Target sales – variable expenses – fixed expenses = target net income. T 9. An increase in sales price would cause a decrease in the break-even point. T 10. Selling expenses are found in the cost of goods sold. F 1. The margin of safety: a. equals planned unit sales less break-even unit sales b. shows how actual sales differ from planned sales c. is the sales price minus all the fixed expenses d. is the same as contribution margin e. Answer: a 2. A car lease payment computed by the number of miles driven can be identified as a:
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