Exam 2, Fall, 06-1 - 1 In the formula Y = a bX variable...

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Unformatted text preview: 1. In the formula Y = a + bX, variable rate refers to the A) dependent variable. B) slope parameter or b. C) independent variable. D) intercept parameter or a. 2. Which of the following is a weakness of the high-low method? A) The method is quick to use and easy to understand. B) The method is easy to apply because only two observations are required to develop the cost function. C) The data points used may represent atypical cost-activity relationships. D) Any two observers will arrive at the same conclusion. 3. More accurate product costing information is produced by assigning costs using A) activity-based pool rates. B) volume-based, plantwide rates. C) volume-based, departmental rates. D) All of the above produce accurate product costing information. 4. The following information pertains to Kangas Company: Selling price per unit $250 Variable manufacturing costs per unit $75 Fixed manufacturing costs per unit $90 Variable selling costs per unit $45 Fixed selling costs per unit $20 Expected production and sales 2,000 units Assuming the expected sales are achieved, what is the degree of operating leverage for Kangas Company? A) 1.9 B) .15 C) 6.5 D) 5.5 Version 1 Page 1 5. Mason Enterprises has prepared the following budget for the month of July: Selling Variable Unit price per unit cost per unit sales Product A .............. $10.00 $4.00 15,000 Product B............... $15.00 $8.00 20,000 Product C............... $18.00 $9.00 5,000 Assuming that total fixed expenses will be $150,000 and the sales mix remains constant, the break- even point would be closest to: A) $276,008 B) $235,292 C) $294,545 D) $141,278 6. Break-even is the point where A) revenue equals cost of goods sold. B) revenue equals total variable costs plus total fixed costs. C) revenue equals total manufacturing costs. D) revenue equals total variable costs. 7. The following information is provided: Sales price per unit $70 Variable cost per unit $45 Fixed costs $50,000 Expected sales 5,000 units The margin of safety is (Hint: Calculate the margin of safety in dollars; then convert to units.) A) 3,000 units B) 7,000 units C) 2,000 units D) 5,000 units Version 1 Page 2 8. Sales $540,000 Variable costs $378,000 Fixed costs $120,000 Expected production and sales in units 40,000 units Sales in dollars necessary to generate net operating income of $30,000 would be A) $100,000. B) $528,000. C) $500,000. D) $214,286. 9. If activity-based costing is used, modifications to the product design made by engineering would be classified as a A) batch level activity. B) product level activity. C) organization sustaining activity....
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This test prep was uploaded on 04/22/2008 for the course ACCT 2113 taught by Professor Knapp during the Fall '08 term at The University of Oklahoma.

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Exam 2, Fall, 06-1 - 1 In the formula Y = a bX variable...

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