ACCT 526 EXAMPREP REVIEW SHEET
TESTED QUESTIONS AND ACCURATE
ANSWERS
●● an advantage of using regression analysis over the high low and
scattergraph methods is that
Answer: regression analysis is a more precide approach than the high-
low or scattergraph methods
●● an example of a discretionary fixed cost is:
Answer: management training
●● when comparing a traditional income statement to a contribution
margin income statement:
Answer: net income will always be identical on both
●● syndeer corportation, which produces and sells a single product,
recently experienced an increase in fixed cost relating to depreciation on
new equipment. if variable cost and sales prices remain unchanged, what
will happen to contribution margin and the break even point?
Answer: contribution margin will be unchanged and the break even
point will increase
, ●● a 45% contribution margin ratio means that:
Answer: 45% of the companys revenue is available to cover fixed costs
and to contribute towards the operating income
●● in a decision to retain or replace equipment, the book value of the old
equipment is a:
Answer: sunk cost
●● which of the following are risks of outsourcing the production of a
part?
Answer: all of these are risks of outsourcing! (Unscheduled price
increase, unreliable delivery, unpredictable quality.)
●● if a plant is operating at full capacity and receives a one time
opportunity to accept an order at a special price below its usual price
then:
Answer: the order will likely be rejected
●● a job order cost system traces direct materials cost to a particular job
by means of:
Answer: material requisitions
●● in a manufacturing company, the cost of goods is equal to :
TESTED QUESTIONS AND ACCURATE
ANSWERS
●● an advantage of using regression analysis over the high low and
scattergraph methods is that
Answer: regression analysis is a more precide approach than the high-
low or scattergraph methods
●● an example of a discretionary fixed cost is:
Answer: management training
●● when comparing a traditional income statement to a contribution
margin income statement:
Answer: net income will always be identical on both
●● syndeer corportation, which produces and sells a single product,
recently experienced an increase in fixed cost relating to depreciation on
new equipment. if variable cost and sales prices remain unchanged, what
will happen to contribution margin and the break even point?
Answer: contribution margin will be unchanged and the break even
point will increase
, ●● a 45% contribution margin ratio means that:
Answer: 45% of the companys revenue is available to cover fixed costs
and to contribute towards the operating income
●● in a decision to retain or replace equipment, the book value of the old
equipment is a:
Answer: sunk cost
●● which of the following are risks of outsourcing the production of a
part?
Answer: all of these are risks of outsourcing! (Unscheduled price
increase, unreliable delivery, unpredictable quality.)
●● if a plant is operating at full capacity and receives a one time
opportunity to accept an order at a special price below its usual price
then:
Answer: the order will likely be rejected
●● a job order cost system traces direct materials cost to a particular job
by means of:
Answer: material requisitions
●● in a manufacturing company, the cost of goods is equal to :
