CORPORATE FINANC 4 UPDATED ACTUAL EXAM QUESTIONS CORRECT ANSWERS GRADED
A PLUS
Question:
If the quantity sold is greater than the quantity produced there has to be:
Answer:
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.
Question:
Contribution margin and contribution margin per unit are the same.
Answer:
False
Question:
Breakeven indicates that the sales dollars cover all fixed and variable costs of manufacturing
Answer:
True
Question:
Inventoriable costs using variable costing is appropriate for external reporting
Answer:
False
Question:
,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?
Answer:
$3
Question:
Absorption costing clearly separates fixed costs from variable costs
Answer:
false
Question:
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?
Answer:
$5
Question:
If the breakeven is 5000 units and fixed costs are $50,000, what is the contribution margin per unit?
Answer:
$10
Question:
Which of the following will be found on an absorption costing income statement but not on a
variable costing income statement?
Answer:
Gross Margin and Cost of Goods Sold
, Question:
If units produced are less than units sold, net income using absorption costing is
Answer:
Less than variable costing
Question:
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?
Answer:
$5,000 (5x - 1x - 20000 = 0, 4x - 20,000=0, 4x=20000, x = 5000)
Question:
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)
Answer:
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.
Question:
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)
Answer:
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.
Question:
A PLUS
Question:
If the quantity sold is greater than the quantity produced there has to be:
Answer:
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.
Question:
Contribution margin and contribution margin per unit are the same.
Answer:
False
Question:
Breakeven indicates that the sales dollars cover all fixed and variable costs of manufacturing
Answer:
True
Question:
Inventoriable costs using variable costing is appropriate for external reporting
Answer:
False
Question:
,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?
Answer:
$3
Question:
Absorption costing clearly separates fixed costs from variable costs
Answer:
false
Question:
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?
Answer:
$5
Question:
If the breakeven is 5000 units and fixed costs are $50,000, what is the contribution margin per unit?
Answer:
$10
Question:
Which of the following will be found on an absorption costing income statement but not on a
variable costing income statement?
Answer:
Gross Margin and Cost of Goods Sold
, Question:
If units produced are less than units sold, net income using absorption costing is
Answer:
Less than variable costing
Question:
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?
Answer:
$5,000 (5x - 1x - 20000 = 0, 4x - 20,000=0, 4x=20000, x = 5000)
Question:
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)
Answer:
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.
Question:
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)
Answer:
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.
Question:
