IVY SOFTWARE MBA PREPWORKS MANAGERIAL
ACCOUNTING || 100% CORRECT.
If Elli Inc sells 20,000 units of x and 60,000 units of y, the composite unit consists of .25x
and .75y (T/F) correct answers True. Adding 20,000 and 60,000 we get 80,000 units. Splitting
this up into proportions we have 20,000/80,000=25%x and 60,000/80,000=75%y.
If the quantity sold is greater than the quantity produced there has to be: correct answers Finished
goods beginning inventory. If you sell more than you produce, you must obtain the units
somewhere. You obtain them from the finished goods beginning inventory.
Contribution margin and contribution margin per unit are the same. correct answers False
Breakeven indicates that the sales dollars cover all fixed and variable costs of manufacturing
correct answers True
Inventoriable costs using variable costing is appropriate for external reporting correct answers
False
Essex company sells two products- A and B. Product A sales are two times that of product B.
The contribution per unit for A is $4 and B is $1. What is the weighted average contribution
margin per unit? correct answers $3
Absorption costing clearly separates fixed costs from variable costs correct answers false
Converse company has two products- A and B. The weighted average contribution margin per
unit is $4. Converse sells twice as many As as Bs. The contribution margin per unit for B is $2.
What is it for A? correct answers $5
If the breakeven is 5000 units and fixed costs are $50,000, what is the contribution margin per
unit? correct answers $10
Which of the following will be found on an absorption costing income statement but not on a
variable costing income statement? correct answers Gross Margin and Cost of Goods Sold
If units produced are less than units sold, net income using absorption costing is correct answers
Less than variable costing
If the selling price is $5 per unit the variable cost is $1 per unit and the fixed cost is $20,000,
what is the breakeven in units? correct answers $5,000 (5x - 1x - 20000 = 0, 4x - 20,000=0,
4x=20000, x = 5000)
The total of ALL the right-hand sides of the T-accounts must equal the total of ALL the left-hand
sides of the T-Accounts (T/F) correct answers True. The double-entry system of accounting
means that for each transaction recorded, there is a left-hand (debit) entry offset by a right-hand
(credit) entry.
, Since the total of all the R sides of accounts equals the total of L sides, then the total amount of
increases entered in the general ledger must equal the total amount of decreases (T/F) correct
answers False. Cash (Asset) and Common Stock (Owners' Equity) is used to record the sale of
company stock. While the R side equals the L side, they both increase, thus, the total amount of
increases does not equal the decreases.
Almost all the data necessary to prepare an income statement is contained in the retained
earnings account. correct answers False. not Almost all. ALL.
A transaction is an event that affects the financial position of a company. correct answers True.
Credits are generally good and debits are generally bad. correct answers False. credit means
nothing more than the R side while a debit means the L side. Neither is good or bad.
Bookkeeping accounts are a method of accumulating financial transactions and summarizing
their effects on balance sheet items. correct answers True. Bookkeeping accounts provide an
easy means for recording, collecting, and reporting financial transactions of a firm.
Liabilities normally have a L balance correct answers False. Liabilities and OE usually have R
balances while assets have L balances
It is possible to have the books in balance but with mistakes. correct answers Having the books
in balance simply means that each time you entered a transaction you placed equal amounts on
the R and L sides. Books which balance do not rule out the possibility that a transaction could
have been posted to the wrong account.
The main purpose of the trial balance is to make sure you have not committed any math errors in
your T- Accounts (T/F) correct answers True. The trial balance is taken as a partial check of the
arithmetic accuracy of the entries previously made.
Fixed costs are fixed per unit produced, but vary in total (true or false) correct answers False.
Fixed costs vary by unit produced but are fixed in total. Remember the graph with the straight
line over all the units of production.
True or False: Variable costs are fixed per unit but vary in total. correct answers True.
Elmwood Inc. manufactures guitars. Elmwood's management has discovered that after 3,000
guitars are manufactured, there is a need to add an additional quality control engineer. If this is
done it is an excellent example of a semi variable cost. correct answers False. This scenario
indicates a semi fixed cost not a semi variable cost. This is an example of a stepped fixed cost.
The "Flex" in flexible budget comes from the assumption of activity levels that vary. correct
answers True.
ACCOUNTING || 100% CORRECT.
If Elli Inc sells 20,000 units of x and 60,000 units of y, the composite unit consists of .25x
and .75y (T/F) correct answers True. Adding 20,000 and 60,000 we get 80,000 units. Splitting
this up into proportions we have 20,000/80,000=25%x and 60,000/80,000=75%y.
If the quantity sold is greater than the quantity produced there has to be: correct answers Finished
goods beginning inventory. If you sell more than you produce, you must obtain the units
somewhere. You obtain them from the finished goods beginning inventory.
Contribution margin and contribution margin per unit are the same. correct answers False
Breakeven indicates that the sales dollars cover all fixed and variable costs of manufacturing
correct answers True
Inventoriable costs using variable costing is appropriate for external reporting correct answers
False
Essex company sells two products- A and B. Product A sales are two times that of product B.
The contribution per unit for A is $4 and B is $1. What is the weighted average contribution
margin per unit? correct answers $3
Absorption costing clearly separates fixed costs from variable costs correct answers false
Converse company has two products- A and B. The weighted average contribution margin per
unit is $4. Converse sells twice as many As as Bs. The contribution margin per unit for B is $2.
What is it for A? correct answers $5
If the breakeven is 5000 units and fixed costs are $50,000, what is the contribution margin per
unit? correct answers $10
Which of the following will be found on an absorption costing income statement but not on a
variable costing income statement? correct answers Gross Margin and Cost of Goods Sold
If units produced are less than units sold, net income using absorption costing is correct answers
Less than variable costing
If the selling price is $5 per unit the variable cost is $1 per unit and the fixed cost is $20,000,
what is the breakeven in units? correct answers $5,000 (5x - 1x - 20000 = 0, 4x - 20,000=0,
4x=20000, x = 5000)
The total of ALL the right-hand sides of the T-accounts must equal the total of ALL the left-hand
sides of the T-Accounts (T/F) correct answers True. The double-entry system of accounting
means that for each transaction recorded, there is a left-hand (debit) entry offset by a right-hand
(credit) entry.
, Since the total of all the R sides of accounts equals the total of L sides, then the total amount of
increases entered in the general ledger must equal the total amount of decreases (T/F) correct
answers False. Cash (Asset) and Common Stock (Owners' Equity) is used to record the sale of
company stock. While the R side equals the L side, they both increase, thus, the total amount of
increases does not equal the decreases.
Almost all the data necessary to prepare an income statement is contained in the retained
earnings account. correct answers False. not Almost all. ALL.
A transaction is an event that affects the financial position of a company. correct answers True.
Credits are generally good and debits are generally bad. correct answers False. credit means
nothing more than the R side while a debit means the L side. Neither is good or bad.
Bookkeeping accounts are a method of accumulating financial transactions and summarizing
their effects on balance sheet items. correct answers True. Bookkeeping accounts provide an
easy means for recording, collecting, and reporting financial transactions of a firm.
Liabilities normally have a L balance correct answers False. Liabilities and OE usually have R
balances while assets have L balances
It is possible to have the books in balance but with mistakes. correct answers Having the books
in balance simply means that each time you entered a transaction you placed equal amounts on
the R and L sides. Books which balance do not rule out the possibility that a transaction could
have been posted to the wrong account.
The main purpose of the trial balance is to make sure you have not committed any math errors in
your T- Accounts (T/F) correct answers True. The trial balance is taken as a partial check of the
arithmetic accuracy of the entries previously made.
Fixed costs are fixed per unit produced, but vary in total (true or false) correct answers False.
Fixed costs vary by unit produced but are fixed in total. Remember the graph with the straight
line over all the units of production.
True or False: Variable costs are fixed per unit but vary in total. correct answers True.
Elmwood Inc. manufactures guitars. Elmwood's management has discovered that after 3,000
guitars are manufactured, there is a need to add an additional quality control engineer. If this is
done it is an excellent example of a semi variable cost. correct answers False. This scenario
indicates a semi fixed cost not a semi variable cost. This is an example of a stepped fixed cost.
The "Flex" in flexible budget comes from the assumption of activity levels that vary. correct
answers True.
