Acct2302.mq3.F09(1) - Name Section 004 and 005 University of Texas at Arlington Mid-Term 3 Acct 2302 Fall 2009 Chandra Subramaniam THIS EXAM IS 100

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Name: __________________________ Section: 004 and 005 University of Texas at Arlington Mid-Term 3 Acct 2302- Fall 2009 Chandra Subramaniam THIS EXAM IS 100 MINUTES LONG. This exam consists of 30 multi choice questions. Please use your Scantron sheet for this section. Please make sure that you have (10) pages including this cover page. There are 100 total points. Allocate an appropriate amount of time to each question. The only materials you are permitted to use on this exam are (1) a calculator, (2) a pencil with eraser or pen. Be sure to note the relevant dates referred to in each question . GOOD LUCK!
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1. If a company increases advertising by $500,000, this will cause net operating income to increase if the resulting increase in sales dollars is greater than: A. $500,000. B. $500,000 divided by the percentage increase in advertising. C. $500,000 divided by the degree of operating leverage. D. $500,000 divided by the contribution margin ratio . 2. Which of the following is true regarding the contribution margin ratio of a single product company? A. As fixed expenses decrease, the contribution margin ratio increases. B. The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit. C. If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales. D. The contribution margin ratio increases as the number of units sold increases. 3. To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by which of the following? A. Variable expense per unit. B. Variable expense per unit/Selling price per unit. C. Fixed expense per unit. D. (Selling price per unit - Variable expense per unit)/Selling price per unit . 4. Witczak Company has a single product and currently has a degree of operating leverage of 5. Which of the following will increase Witczak's degree of operating leverage? A. Choice A B. Choice B C. Choice C D. Choice D 5. If company A has a higher degree of operating leverage than company B, then: A. company A has higher variable expenses. B. company A's profits are more sensitive to percentage changes in sales . C. company A is more profitable. D. company A is less risky.
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6. Carver Company produces a product which sells for $30. Variable manufacturing costs are $15 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 10% of the selling price is paid on each unit sold. The contribution margin per unit is: A. $3 B. $15 C. $8 D. $12 7. Filson Inc., a company that produces and sells a single product, has provided its contribution format income statement for February. If the company sells 9,700 units, its total contribution margin should be closest to:
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This note was uploaded on 04/30/2011 for the course ACCOUNTING 200 taught by Professor Levine during the Spring '11 term at DeVry San Diego.

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Acct2302.mq3.F09(1) - Name Section 004 and 005 University of Texas at Arlington Mid-Term 3 Acct 2302 Fall 2009 Chandra Subramaniam THIS EXAM IS 100

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