ACCT 526 Final ULL | Questions with 100% Verified
Answers | Latest Update 2026/2027
Question: the point at which total revenue equals total cost (both fixed
and variable cost). At breakeven, profit is zero.
Answer: break even point
Question: Alpha Company is evaluating a make-or-buy decision. Which
of the following is an example of an irrelevant cost with regard
to a make-or-buy decision?
Answer: cost of security guard who will guard the finished goods inventory
Question: fixed expenses that cannot be traced to individual segments
or products. They will continue to exist even if one segment or
product is eliminated.
Answer: common fixed expense
Question: the difference between total sales and total variable costs on
a total basis, or price minus unit variable cost on a per-unit
basis. Total contribution margin is the amount left over from
sales to contribute to covering fixed costs and profit.
Answer: contribution margin
Question: the cost behavior-based income statement. Costs are
separated into fixed and variable categories. First, total
variable cost is subtracted from sales to get the contribution
margin. Next, total fixed expenses are subtracted to get
operating income (profit).
Answer: contribution margin income statement
Question: the ratio of total contribution margin to sales or of unit
contribution to price. Contribution margin ratio is also
computed as 1 (100%) minus the variable cost ratio. It
represents the percentage of each sales dollar available to
contribute to fixed cost and profit.
Answer: contribution margin ratio
Question: the company's relative mix of fixed to variable costs. It is
useful in determining operating leverage.
Answer: cost structure
Question: estimates how changes in costs (both variable and fixed),
sales volume, and price affect profit.
Answer: cost volume profit analysis (CVP)
,Question: a graph showing the relationships among cost, volume (units
sold), and profit using a total cost line and a total revenue line.
The intersection of the total cost line with the total revenue
line is the break-even point.
Answer: CVP graph
Question: shows the degree to which fixed costs are used to obtain a
higher percent change in profits as sales change. DOL is equal
to the total contribution margin divided by operating income.
Answer: degree of operating leverage
Question: fixed expenses that can be traced to an individual segment or
product. If that segment or product is eliminated, the direct
fixed expense is eliminated.
Answer: direct fixed expenses
Question: the number of units sold or the amount of sales revenue
earned above the break-even point.
Answer: margin of safety
Question: occurs when fixed costs are used to obtain higher change in
profits as sales change.
Answer: operating leverage
Question: the relative combination of products sold by a company. Sales
mix is usually expressed in the lowest whole units. For
example, a sales mix of 3:2 means that for every 3 units of
Product A sold, 2 units of Product B are sold.
Answer: sales mix
Question: a ?what-if? technique used to see what impact a change in an
underlying variable has on the answer.
Answer: sensitivity analysis
Question: the ratio of total variable cost to sales or of unit variable cost
to price. Variable cost ratio is also computed as 1 (100%) minus
the contribution margin ratio. It represents the percentage of
each sales dollar used to cover variable cost.
Answer: variable cost ratio
Question: financial plans for the future.
Answer: budgets
, Question: fixed expenses that cannot be directly traced to individual
segments and that are unaffected by the elimination of any
one segment.
Answer: common fixed expenses
Question: mathematical expressions that express resource limitations.
Answer: constraints
Question: a moving 12-month budget. As 1 month expires, another month
in the future is added.
Answer: continious budget
Question: a specific set of procedures that, when followed, produces a
decision.
Answer: decision model
Question: the difference in total cost between the alternatives in a
decision.
Answer: differential cost
Question: fixed costs that are directly traceable to a given segment and,
consequently, disappear if the segment is eliminated.
Answer: direct fixed expense
Question: products that are inseparable prior to a split-off point. All
manufacturing costs up to the split-off point are joint costs.
Answer: joint products
Question: relevant costing analyses that focus on keeping or dropping a
segment of a business.
Answer: keep or drop decisions
Question: relevant costing analyses that focus on whether a component
should be made internally or purchased externally.
Answer: make or buy decisions
Question: the percentage applied to a base cost; it includes desired
profit and any costs not included in the base cost.
Answer: markup
Question: the comprehensive financial plan for the organization as a
whole. It covers a fiscal year.
Answer: master budget
Answers | Latest Update 2026/2027
Question: the point at which total revenue equals total cost (both fixed
and variable cost). At breakeven, profit is zero.
Answer: break even point
Question: Alpha Company is evaluating a make-or-buy decision. Which
of the following is an example of an irrelevant cost with regard
to a make-or-buy decision?
Answer: cost of security guard who will guard the finished goods inventory
Question: fixed expenses that cannot be traced to individual segments
or products. They will continue to exist even if one segment or
product is eliminated.
Answer: common fixed expense
Question: the difference between total sales and total variable costs on
a total basis, or price minus unit variable cost on a per-unit
basis. Total contribution margin is the amount left over from
sales to contribute to covering fixed costs and profit.
Answer: contribution margin
Question: the cost behavior-based income statement. Costs are
separated into fixed and variable categories. First, total
variable cost is subtracted from sales to get the contribution
margin. Next, total fixed expenses are subtracted to get
operating income (profit).
Answer: contribution margin income statement
Question: the ratio of total contribution margin to sales or of unit
contribution to price. Contribution margin ratio is also
computed as 1 (100%) minus the variable cost ratio. It
represents the percentage of each sales dollar available to
contribute to fixed cost and profit.
Answer: contribution margin ratio
Question: the company's relative mix of fixed to variable costs. It is
useful in determining operating leverage.
Answer: cost structure
Question: estimates how changes in costs (both variable and fixed),
sales volume, and price affect profit.
Answer: cost volume profit analysis (CVP)
,Question: a graph showing the relationships among cost, volume (units
sold), and profit using a total cost line and a total revenue line.
The intersection of the total cost line with the total revenue
line is the break-even point.
Answer: CVP graph
Question: shows the degree to which fixed costs are used to obtain a
higher percent change in profits as sales change. DOL is equal
to the total contribution margin divided by operating income.
Answer: degree of operating leverage
Question: fixed expenses that can be traced to an individual segment or
product. If that segment or product is eliminated, the direct
fixed expense is eliminated.
Answer: direct fixed expenses
Question: the number of units sold or the amount of sales revenue
earned above the break-even point.
Answer: margin of safety
Question: occurs when fixed costs are used to obtain higher change in
profits as sales change.
Answer: operating leverage
Question: the relative combination of products sold by a company. Sales
mix is usually expressed in the lowest whole units. For
example, a sales mix of 3:2 means that for every 3 units of
Product A sold, 2 units of Product B are sold.
Answer: sales mix
Question: a ?what-if? technique used to see what impact a change in an
underlying variable has on the answer.
Answer: sensitivity analysis
Question: the ratio of total variable cost to sales or of unit variable cost
to price. Variable cost ratio is also computed as 1 (100%) minus
the contribution margin ratio. It represents the percentage of
each sales dollar used to cover variable cost.
Answer: variable cost ratio
Question: financial plans for the future.
Answer: budgets
, Question: fixed expenses that cannot be directly traced to individual
segments and that are unaffected by the elimination of any
one segment.
Answer: common fixed expenses
Question: mathematical expressions that express resource limitations.
Answer: constraints
Question: a moving 12-month budget. As 1 month expires, another month
in the future is added.
Answer: continious budget
Question: a specific set of procedures that, when followed, produces a
decision.
Answer: decision model
Question: the difference in total cost between the alternatives in a
decision.
Answer: differential cost
Question: fixed costs that are directly traceable to a given segment and,
consequently, disappear if the segment is eliminated.
Answer: direct fixed expense
Question: products that are inseparable prior to a split-off point. All
manufacturing costs up to the split-off point are joint costs.
Answer: joint products
Question: relevant costing analyses that focus on keeping or dropping a
segment of a business.
Answer: keep or drop decisions
Question: relevant costing analyses that focus on whether a component
should be made internally or purchased externally.
Answer: make or buy decisions
Question: the percentage applied to a base cost; it includes desired
profit and any costs not included in the base cost.
Answer: markup
Question: the comprehensive financial plan for the organization as a
whole. It covers a fiscal year.
Answer: master budget
