Exam 1 Practice - Practice Questions for Exam 1 (Chapters...

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Practice Questions for Exam 1 (Chapters 1, 18, 22 and 23) These practice questions do not cover every topic that may appear on the actual exam, but they should be a part of your exam preparation. You should also study your class notes, homework, group activities, practice problems as well as the assigned reading from the textbook. 01. Which financial statement gives the most details regarding a company's ability to sell goods and services relative to the cost to produce and deliver those goods and services? A. Balance Sheet B. Income Statement C. Statement of Retained Earnings D. Statement of Cash Flows 02. Franklin Company recently sold 500 units for total sales of $10,000. The company reported contribution margin of $6,000 and net income of $5,000. If the company's variable costs per unit decreased by $1, its volume increased by 15% and fixed cost increased by $500, what is the company's net income? A. 5,825 B. 5,975 C. 5,000 D. 6,475 03. Sales commissions are classified as A. direct labor. B. period costs. C. product costs. D. indirect labor. 04. Where do most companies start in the budgeting process? A. They estimate expected profits. B. They look at competitors’ future plans. C. They look at past performance. D. They estimate how many units the production department is able to produce. 05. An example of a direct product cost is: A. advertising expense. B. a portion of the president's salary. C. the salary of a production plant manager. D. the wage of a production line maintenance employee. E. the wage of a production line assembly employee. 06. Which of the following expenses would not appear on a Selling and Administrative Expense Budget? A. Indirect labor salaries B. Sales commissions C. Marketing manager salary D. Company president’s salary 07. Which of the following costs incurred by a restaurant store is not an example of a variable cost? A. Buying vegetables from a local farmer.
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Exam 1 Practice - Practice Questions for Exam 1 (Chapters...

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