Accounting Questions and Graded Answers.
Kinsi Corporation manufactures five different products. All five of these products must pass
through a stamping machine in its fabrication department. This machine is Kinsi's constrained
resource. Kinsi would make the most profit if it produces the product that: - generates the
highest contribution margin per stamping machine hour
Accepting a special order will improve overall net operating income if the revenue from the
special order exceeds: - the incremental costs associated with the order
If total fixed costs increase while variable costs and sales price are unchanged, what happens to
the break-even point? - The break-even point increases, and therefore more units must be
sold to break-even.
A relevant cost is: - A cost that differs across decision alternatives.
At the break-even point: - Both sales would be equal to total costs and contribution
margin would be equal to total fixed costs are correct
A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant
to future decisions, is called a(n): - Sunk cost.
What is the formula for calculating contribution margin ratio? - Contribution margin /
Sales
The potential benefits lost by taking a specific action when two or more alternative choices are
available is known as a(n): - Opportunity cost.
Once sales reach the break-even point, each additional unit sold will: - increase profit by
an amount equal to the per unit contribution margin.
Kinsi Corporation manufactures five different products. All five of these products must pass
through a stamping machine in its fabrication department. This machine is Kinsi's constrained
resource. Kinsi would make the most profit if it produces the product that: - generates the
highest contribution margin per stamping machine hour
Accepting a special order will improve overall net operating income if the revenue from the
special order exceeds: - the incremental costs associated with the order
If total fixed costs increase while variable costs and sales price are unchanged, what happens to
the break-even point? - The break-even point increases, and therefore more units must be
sold to break-even.
A relevant cost is: - A cost that differs across decision alternatives.
At the break-even point: - Both sales would be equal to total costs and contribution
margin would be equal to total fixed costs are correct
A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant
to future decisions, is called a(n): - Sunk cost.
What is the formula for calculating contribution margin ratio? - Contribution margin /
Sales
The potential benefits lost by taking a specific action when two or more alternative choices are
available is known as a(n): - Opportunity cost.
Once sales reach the break-even point, each additional unit sold will: - increase profit by
an amount equal to the per unit contribution margin.
