1 A company that has a single product for which it has a negative contribution margin per unit
a will improve its net income by increasing its variable cost per unit.
b will improve its net income by increasing the number of units it sells.
c will improve its net income by decreasing its selling price per unit.
d will earn a profit by decreasing its total fixed costs.
e will not earn a profit.
Use the table below to answer the two questions that appear below it.
If taxable income is:
The tax is:
of the amount
But not over-
2 A company that has taxable income of $90,000 and a tax credit of $4,000 will pay what amount of income tax?
3 A company has total revenues of $100,000, a tax credit of $2,000, deductions of $10,000, and an exclusion of
What amount of income tax will it pay?
4 Which of the following is illegal with respect to income taxes?
5 Which of the services provided by CPA’s is substantially less in scope than an audit but does provided limited assurance
to financial statement users?
none of the above
6 Who bears ultimate responsibility for the contents of a company's financial statements according to SARBOX section 302?
a the CEO
b the board
c the auditor
e the CPA
7 Under SARBOX, the "lead"
external auditor of a U.S. company can serve in that role for a maximum of how many years?
e none of the above
8 Which of the following is NOT one of the components of an internal control system?
a Risk assessment
b "Tone at the top"
c Control activities
9 Which of the following statements is NOT true for a heavy equipment manufacturing company in the U S of A?
a All else being equal, cost of goods sold will be higher in factories that are newer.
b If fewer units are manufactured and sold, the cost per unit will be lower.
c Research and development costs are excluded from the cost of the product.
d On the income statement, the only account that shows manufacturing costs is cost of goods sold.
e none of the above
10 A company's total costs are represented by a straight line with a slope of 3 and a y-intercept of 40,000.
The slope of the straight line
representing its total revenues is 7, and it has a y-intercept of 0.
What is the company's breakeven point in terms of units sold?