ACC 241 -Exam II Practice Q's Ch. 7, 8,
12 Test Questions with Guaranteed
Pass Solutions 2025-2026 Updated.
At the breakeven point, contribution margin equals revenue.
True
False - Answer False
If there is little or no relationship between the cost and the volume, the data points on a scatter
plot will appear almost as a straight line.
True
False - Answer False
Operating leverage is the use of fixed cost to extract higher percentage changes in profits as
sales activity changes.
True
False - Answer True
Future costs that differ across alternatives are relevant costs.
True
False - Answer True
In deciding the optimal mix of products that use a constrained resource, it is important to
determine the contribution margin per unit of scarce resource.
True
False - Answer True
The two major categories of capital investment decision models are non-discounting models
and discounting models.
True
False - Answer True
,Both the payback period and the accounting rate of return ignore the time value of money.
True
False - Answer True
Both the payback period and the accounting rate of return do not consider the profitability of a
project over its life span.
True
False - Answer False
If the net present value of an investment is zero, the investment earns less than the minimum
required rate of return.
True
False - Answer False
Tyler Corporation is a wholesaler that sells a single product. Management has provided the
following cost data for two levels of monthly sales volume. The company sells the product for
$127.20 per unit.
Sales volume (units): 5,000 6,000
Cost of Sales: $419,000 $502,800
Selling and Administrative costs: $186,500 $202,200
The best estimate of the total contribution margin when 5,300 units are sold is:
- $146,810
- $230,020
- $51,410
- $32,330 - Answer $146,810
VC per unit:[705,000 (502,800 + 202,200) - 605,500(419,000 + 186,500)] / 6,000 - 5,000 =
$99.50$127.20 (SP) -$99.50 (VC) = $27.70 (CM) x 5,300 (units) = $146,810
, 3. A decrease in variable costs per unit.
4. A decrease in sales volume. - Answer A decrease in variable costs per unit.
Given breakeven sales in units of 28,000 and a unit contribution margin of $4, how many units
must be sold to reach a target operating income of $4,000?
- 1,000
- 27,000
- 29,000
- 16,000 - Answer 29,000
FC @ BE = CM @ BE
FC = 28,000 x 4 = $112,000
FC + TP / CM = $112,000 + 4,000 / $4 = 29,000
Last month Kelly Company had a $30,000 loss on sales of $250,000. Fixed costs are $60,000 a
month. What sales revenue is needed for Kelly to break even?
- $220,000
- $166,667
- $280,000
- $500,000 - Answer 500,000
Contribution margin ratio is ($60,000 - $30,000)/$250,000 = 12%. Break-even sales is
$60,000/0.12 = $500,000.
Last year, Danielle Company reported $750,000 in sales (25,000 units) and a net operating
income of $25,000. At the break-even point, the company's total contribution margin equals
$500,000. Based on this information, the company's:
- variables expenses are 60% of sales
- break-even point is 24,000
- contribution margin is 40%
- variable expense per unit is $9 - Answer variable expense per unit is $9
Solve backwards for contribution margin and then variable costs:
12 Test Questions with Guaranteed
Pass Solutions 2025-2026 Updated.
At the breakeven point, contribution margin equals revenue.
True
False - Answer False
If there is little or no relationship between the cost and the volume, the data points on a scatter
plot will appear almost as a straight line.
True
False - Answer False
Operating leverage is the use of fixed cost to extract higher percentage changes in profits as
sales activity changes.
True
False - Answer True
Future costs that differ across alternatives are relevant costs.
True
False - Answer True
In deciding the optimal mix of products that use a constrained resource, it is important to
determine the contribution margin per unit of scarce resource.
True
False - Answer True
The two major categories of capital investment decision models are non-discounting models
and discounting models.
True
False - Answer True
,Both the payback period and the accounting rate of return ignore the time value of money.
True
False - Answer True
Both the payback period and the accounting rate of return do not consider the profitability of a
project over its life span.
True
False - Answer False
If the net present value of an investment is zero, the investment earns less than the minimum
required rate of return.
True
False - Answer False
Tyler Corporation is a wholesaler that sells a single product. Management has provided the
following cost data for two levels of monthly sales volume. The company sells the product for
$127.20 per unit.
Sales volume (units): 5,000 6,000
Cost of Sales: $419,000 $502,800
Selling and Administrative costs: $186,500 $202,200
The best estimate of the total contribution margin when 5,300 units are sold is:
- $146,810
- $230,020
- $51,410
- $32,330 - Answer $146,810
VC per unit:[705,000 (502,800 + 202,200) - 605,500(419,000 + 186,500)] / 6,000 - 5,000 =
$99.50$127.20 (SP) -$99.50 (VC) = $27.70 (CM) x 5,300 (units) = $146,810
, 3. A decrease in variable costs per unit.
4. A decrease in sales volume. - Answer A decrease in variable costs per unit.
Given breakeven sales in units of 28,000 and a unit contribution margin of $4, how many units
must be sold to reach a target operating income of $4,000?
- 1,000
- 27,000
- 29,000
- 16,000 - Answer 29,000
FC @ BE = CM @ BE
FC = 28,000 x 4 = $112,000
FC + TP / CM = $112,000 + 4,000 / $4 = 29,000
Last month Kelly Company had a $30,000 loss on sales of $250,000. Fixed costs are $60,000 a
month. What sales revenue is needed for Kelly to break even?
- $220,000
- $166,667
- $280,000
- $500,000 - Answer 500,000
Contribution margin ratio is ($60,000 - $30,000)/$250,000 = 12%. Break-even sales is
$60,000/0.12 = $500,000.
Last year, Danielle Company reported $750,000 in sales (25,000 units) and a net operating
income of $25,000. At the break-even point, the company's total contribution margin equals
$500,000. Based on this information, the company's:
- variables expenses are 60% of sales
- break-even point is 24,000
- contribution margin is 40%
- variable expense per unit is $9 - Answer variable expense per unit is $9
Solve backwards for contribution margin and then variable costs:
