ACG 2071 EXAM 2 ACTUAL TEST
QUESTIONS AND ACCURATE ANSWERS
COMPLETE REVIEW SHEET
●● Thterm-7e contribution margin ratio is
a.the same as profit
b.the same as the variable cost ratio
c.the same as the profit-volume ratio
d.the portion of equity contributed by the stockholders
Answer: c.the same as the profit-volume ratio
●● Which of the following describes the behavior of the fixed cost per
unit?
a.remains constant with changes in production
b.decreases with decreasing production
c.increases with increasing production
d.decreases with increasing production
Answer: d.decreases with increasing production
,●● In cost-volume-profit analysis, all costs are classified into the
following two categories:
a.discretionary costs and sunk costs
b.variable costs and fixed costs
c.sunk costs and fixed costs
d.mixed costs and variable costs
Answer: b.variable costs and fixed costs
●● Which of the graphs in Figure illustrates the behavior of a total fixed
cost?
a.Graph 1
b.Graph 4
c.Graph 2
d.Graph 3
Answer: a. Graph 1
●● Carter Co. sells two products, Arks and Bins. Last year, Carter sold
14,000 units of Arks and 56,000 units of Bins. Related data are:
Product
Unit SellingPrice Unit VariableCost Unit ContributionMargin
Arks. $120 $80 $40
,Bins. 80 60 20
What was Carter Co.'s sales mix last year?
a.12% Arks, 28% Bins
b.70% Arks, 30% Bins
c.40% Arks, 20% Bins
d.20% Arks, 80% Bins
Answer: d.20% Arks, 80% Bins
●● Which of the following costs is a mixed cost?
a. straight-line depreciation on factory equipment
b.rental costs of $10,000 per month plus $0.30 per machine hour of use
.electricity costs of $3 per kilowatt-hourd.
d. salary for a supervisor
Answer: b.rental costs of $10,000 per month plus $0.30 per machine
hour of use electricity costs of $3 per kilowatt-hourd.
●● Connor Company's fixed costs are $400,000, the unit selling price is
$25, and the unit variable costs are $15. What is the break-even sales
(units) if the variable costs are increased by $2?
a.30,770 units
, b.40,000 units
c.50,000 units
d.26,667 units
Answer: c.50,000 units
●● Contribution margin is
a.another term for volume in the "cost-volume-profit" analysis
b.the excess of sales revenue over variable cost
c.the same as sales revenue
d.profit
Answer: b.the excess of sales revenue over variable cost
or c.the same as sales revenue
●● Which of the graphs in Figure 21-1 illustrates the nature of a mixed
cost?
a.Graph 1
b.Graph 2
c.Graph 4
d.Graph 3
Answer: b.Graph 2
QUESTIONS AND ACCURATE ANSWERS
COMPLETE REVIEW SHEET
●● Thterm-7e contribution margin ratio is
a.the same as profit
b.the same as the variable cost ratio
c.the same as the profit-volume ratio
d.the portion of equity contributed by the stockholders
Answer: c.the same as the profit-volume ratio
●● Which of the following describes the behavior of the fixed cost per
unit?
a.remains constant with changes in production
b.decreases with decreasing production
c.increases with increasing production
d.decreases with increasing production
Answer: d.decreases with increasing production
,●● In cost-volume-profit analysis, all costs are classified into the
following two categories:
a.discretionary costs and sunk costs
b.variable costs and fixed costs
c.sunk costs and fixed costs
d.mixed costs and variable costs
Answer: b.variable costs and fixed costs
●● Which of the graphs in Figure illustrates the behavior of a total fixed
cost?
a.Graph 1
b.Graph 4
c.Graph 2
d.Graph 3
Answer: a. Graph 1
●● Carter Co. sells two products, Arks and Bins. Last year, Carter sold
14,000 units of Arks and 56,000 units of Bins. Related data are:
Product
Unit SellingPrice Unit VariableCost Unit ContributionMargin
Arks. $120 $80 $40
,Bins. 80 60 20
What was Carter Co.'s sales mix last year?
a.12% Arks, 28% Bins
b.70% Arks, 30% Bins
c.40% Arks, 20% Bins
d.20% Arks, 80% Bins
Answer: d.20% Arks, 80% Bins
●● Which of the following costs is a mixed cost?
a. straight-line depreciation on factory equipment
b.rental costs of $10,000 per month plus $0.30 per machine hour of use
.electricity costs of $3 per kilowatt-hourd.
d. salary for a supervisor
Answer: b.rental costs of $10,000 per month plus $0.30 per machine
hour of use electricity costs of $3 per kilowatt-hourd.
●● Connor Company's fixed costs are $400,000, the unit selling price is
$25, and the unit variable costs are $15. What is the break-even sales
(units) if the variable costs are increased by $2?
a.30,770 units
, b.40,000 units
c.50,000 units
d.26,667 units
Answer: c.50,000 units
●● Contribution margin is
a.another term for volume in the "cost-volume-profit" analysis
b.the excess of sales revenue over variable cost
c.the same as sales revenue
d.profit
Answer: b.the excess of sales revenue over variable cost
or c.the same as sales revenue
●● Which of the graphs in Figure 21-1 illustrates the nature of a mixed
cost?
a.Graph 1
b.Graph 2
c.Graph 4
d.Graph 3
Answer: b.Graph 2
