ACCY 200 Exam 2 UPDATED Exam
Questions and CORRECT Answers
which of the following terms do not appear in the contribution margin format income statement?
variable expenses.
contribution margin.
operating income.
gross profit. - CORRECT ANSWER - gross profit
As the level of activity decreases:
variable cost remains constant in total.
fixed cost remains constant in total.
variable cost per unit decrease.
fixed cost per unit decrease. - CORRECT ANSWER - Fixed cost remains constant in total
The term "relevant range" refers to
the range of activity where fixed costs change as activity changes.
the range of activity where total variable cost remains constant as activity changes.
the range of activity where cost relationships are valid.
the range of activity where costs will fluctuate. - CORRECT ANSWER - The range of activity
where cost relationships are valid
Which of the following statements does NOT describe a characteristic of management
accounting?
,Management accounting is more concerned with units of the organization rather than with the
organization as a whole.
Management accounting places a great deal of emphasis on the future.
Management accounting must conform to GAAP.
Approximate amounts rather than accurate amounts or refined estimates are often used in
management accounting. - CORRECT ANSWER - Management accounting must conform to
GAAP
The relevant range concept refers to:
a firm's range of profitability.
a firm's range of sales.
a firm's range of activity.
a firm's range of rates of return. - CORRECT ANSWER - A firms range of activity
A contribution margin format income statement is organized by
sales territories.
functional classifications.
responsibility centers.
cost behavior classifications. - CORRECT ANSWER - Cost behavior classficiations
An example of a cost likely to have a fixed behavior pattern is
sales force commission.
production labor wages.
advertising cost.
electricity cost for packaging equipment. - CORRECT ANSWER - Advertising cost
,Knowledge about the behavior pattern of a cost is important to understanding the effect of net
income on a change in sales volume because as sales volume changes
variable costs will not change.
the effect on net income will depend on the behavior pattern of various costs.
fixed costs will rise proportionately.
net income will change proportionately. - CORRECT ANSWER - The effect on net income
will depend on the behavior pattern of various costs
The key to analyzing a sell as is or process further decision is to determine that:
all allocated costs are included in the decision.
opportunity costs exceed sunk costs.
differential costs do not exist.
incremental revenues exceed incremental costs. - CORRECT ANSWER - Incremental
revenues exceed incremental costs
In a make or buy decision, which of the costs would be considered relevant
sunk costs.
allocated costs.
unavoidable costs.
avoidable costs - CORRECT ANSWER - Avoidable costs
Managerial accounting as opposed to financial accounting emphasizes
A) The financial condition of the organization as a whole.
B) Meeting the requirements of generally accepted accounting principles.
C) Emphasizing the future.
, D) Providing data for investors and creditors.
E) Determining exact results. - CORRECT ANSWER - C) Emphasizing the future
Activities included in a generally accepted definition of the management process include
A) Planning, organizing, controlling.
B) Planning, operating, reporting.
C) Preparing, operating, creating.
D) Preparing, organizing, converting.
E) None of the above. - CORRECT ANSWER - Planning, organizing, controlling
Contribution margin can be expressed as:
A) Sales minus variable expenses.
B) Sales minus cost of goods sold.
C) Sales minus fixed expenses.
D) The level of sales required to cover variable expenses.
E) The level of sales required to cover fixed and variable expenses. - CORRECT ANSWER -
Sales minus variable expenses
The contribution margin income statement:
A) Reports expenses based upon cost behavior pattern rather than cost function.
B) Unitizes fixed costs.
C) Shows contribution margin rather than operating income as the bottom line.
D) Is sometimes used for financial reporting purposes - CORRECT ANSWER - Reports
expenses based on cost behavior pattern rather than cost function
Questions and CORRECT Answers
which of the following terms do not appear in the contribution margin format income statement?
variable expenses.
contribution margin.
operating income.
gross profit. - CORRECT ANSWER - gross profit
As the level of activity decreases:
variable cost remains constant in total.
fixed cost remains constant in total.
variable cost per unit decrease.
fixed cost per unit decrease. - CORRECT ANSWER - Fixed cost remains constant in total
The term "relevant range" refers to
the range of activity where fixed costs change as activity changes.
the range of activity where total variable cost remains constant as activity changes.
the range of activity where cost relationships are valid.
the range of activity where costs will fluctuate. - CORRECT ANSWER - The range of activity
where cost relationships are valid
Which of the following statements does NOT describe a characteristic of management
accounting?
,Management accounting is more concerned with units of the organization rather than with the
organization as a whole.
Management accounting places a great deal of emphasis on the future.
Management accounting must conform to GAAP.
Approximate amounts rather than accurate amounts or refined estimates are often used in
management accounting. - CORRECT ANSWER - Management accounting must conform to
GAAP
The relevant range concept refers to:
a firm's range of profitability.
a firm's range of sales.
a firm's range of activity.
a firm's range of rates of return. - CORRECT ANSWER - A firms range of activity
A contribution margin format income statement is organized by
sales territories.
functional classifications.
responsibility centers.
cost behavior classifications. - CORRECT ANSWER - Cost behavior classficiations
An example of a cost likely to have a fixed behavior pattern is
sales force commission.
production labor wages.
advertising cost.
electricity cost for packaging equipment. - CORRECT ANSWER - Advertising cost
,Knowledge about the behavior pattern of a cost is important to understanding the effect of net
income on a change in sales volume because as sales volume changes
variable costs will not change.
the effect on net income will depend on the behavior pattern of various costs.
fixed costs will rise proportionately.
net income will change proportionately. - CORRECT ANSWER - The effect on net income
will depend on the behavior pattern of various costs
The key to analyzing a sell as is or process further decision is to determine that:
all allocated costs are included in the decision.
opportunity costs exceed sunk costs.
differential costs do not exist.
incremental revenues exceed incremental costs. - CORRECT ANSWER - Incremental
revenues exceed incremental costs
In a make or buy decision, which of the costs would be considered relevant
sunk costs.
allocated costs.
unavoidable costs.
avoidable costs - CORRECT ANSWER - Avoidable costs
Managerial accounting as opposed to financial accounting emphasizes
A) The financial condition of the organization as a whole.
B) Meeting the requirements of generally accepted accounting principles.
C) Emphasizing the future.
, D) Providing data for investors and creditors.
E) Determining exact results. - CORRECT ANSWER - C) Emphasizing the future
Activities included in a generally accepted definition of the management process include
A) Planning, organizing, controlling.
B) Planning, operating, reporting.
C) Preparing, operating, creating.
D) Preparing, organizing, converting.
E) None of the above. - CORRECT ANSWER - Planning, organizing, controlling
Contribution margin can be expressed as:
A) Sales minus variable expenses.
B) Sales minus cost of goods sold.
C) Sales minus fixed expenses.
D) The level of sales required to cover variable expenses.
E) The level of sales required to cover fixed and variable expenses. - CORRECT ANSWER -
Sales minus variable expenses
The contribution margin income statement:
A) Reports expenses based upon cost behavior pattern rather than cost function.
B) Unitizes fixed costs.
C) Shows contribution margin rather than operating income as the bottom line.
D) Is sometimes used for financial reporting purposes - CORRECT ANSWER - Reports
expenses based on cost behavior pattern rather than cost function
