Exam_22_24 - BUSI 562 Sample Test Chapter 5,6,7 1 When the...

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BUSI 562 Sample Test Chapter 5,6,7 1. When the activity level is expected to decline within the relevant range, what effects would be anticipated with respect to each of the following? F i x e d c o s t V a r i a b l e c o s t p e r u n i t p e r u n i t A . I n c r e a s e N o c h a n g e B . I n c r e a s e I n c r e a s e C . N o c h a n g e N o c h a n g e D . N o c h a n g e I n c r e a s e A) Entry A B) Entry B C) Entry C D) Entry D 2. Which of the following costs, if expressed on a per unit basis, would be expected to vary inversely with the level of production and sales? A) Sales commissions. B) Fixed manufacturing overhead. C) Variable manufacturing overhead. D) Direct materials. 3. An example of a committed fixed cost would be: A) taxes on real estate. B) management development programs. C) public relations. D) advertising programs. 4. The relative proportion of variable, fixed, and mixed costs in a firm is known as the firm's: A) contribution margin. B) cost structure. C) product mix. D) relevant range. 5. Which of the following types of firms likely would have a high proportion of variable costs in its cost structure? A) Public utility. B) Airline. C) Fast food outlet. D) Architectural firm. Page 1
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6. The traditional income statement required for external reporting: A) organizes costs by behavior rather than by function. B) organizes costs by function rather than by behavior. C) emphasizes the concept of contribution margin. D) is equally useful for internal as well as external decisions. Use the following to answer questions 7-10: An income statement for Sam's Bookstore for the first quarter of the year is presented below: On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. 7. The contribution margin for Sam's Bookstore for the first quarter is: A) $180,000. B) $774,000. C) $144,000. D) $756,000. 8. The net operating income using the contribution approach for the first quarter is: A) $270,000. B) $180,000. C) $144,000. D) $66,000. 9. The cost formula for operating expenses with "X" equal to the number of books sold is: A) Y = $102,000 + $5X. B) Y = $102,000 + $7X. Page 2
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C) Y = $78,000 + $7X. D) Y = $78,000 + $9X. 10. If 20,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be: A) $300,000. B) $160,000. C) $860,000. D) $ 58,000. Use the following to answer questions 11-13: Marger, Inc., provided the following data for two recent months: A p r i l M a y S a l e s i n U n i t s . . . . . . 3 , 2 0 0 4 , 5 0 0 C o s t : C o s t T . . . . . . . . . . . . . . 5 , 6 0 0 5 , 6 0 0 C o s t U . . . . . . . . . . . . . . 4 , 4 8 0 6 , 3 0 0 C o s t W . . . . . . . . . . . . . 3 , 9 5 0 5 , 2 5 0 11. Which of the following classifications best describes the behavior of Cost T? A)
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This note was uploaded on 11/28/2009 for the course BUS 281 taught by Professor Goldberg during the Spring '09 term at Northeastern.

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Exam_22_24 - BUSI 562 Sample Test Chapter 5,6,7 1 When the...

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