ACCT 201 KU Exam 1 Questions with Correct Answers Graded A+
Variable - Answers Total costs change in direct proportion to changes in activity level
Fixed - Answers Total costs do not change despite changes in activity level
Mixed - Answers Costs that contain both a variable and a fixed component
Step costs - Answers fixed for a small range of volume, then jumps to a new level with a moderate
change in volume
Costs of goods sold expenses - Answers costs that can be directly related to a product or service
Operating expenses - Answers everything else used to run a business
A contribution income statement is based on - Answers cost behavior
Formula for contribution margin - Answers Sale - Variable Costs
Formula for operating income - Answers Contribution margin - fixed costs
Cost equation - Answers TC = (VC * X) + FC
How to find cost using high-low method - Answers 1. Identify data w/ highest/lowest points of ACTIVITY
2. Find the slope of the line (= variable cost/unit)
3. Find the vertical intercept (= fixed cost)
Regression Analysis: Intercept coefficient - Answers vertical coefficient/fixed cost
Regression Analysis: X Variable 1 - Answers Slope/variable cost
Regression Analysis: R square - Answers indicates how well the regression line fits the data point
Which method is the most accurate? - Answers Regression Analysis
Which Income Statement format do managers use to predict costs? - Answers CM I/S
Profit Equation - Answers SP(X) - VC(X) - FC
What is the contribution margin? - Answers Sales revenue left, after covering variable costs, to cover
fixed costs plus desired operating profit
Formula: Break-even point in Units - Answers $Amount to Cover/Unit CM$
Formula: CM% - Answers Unit CM$/Unit Sales price
How do I use the profit equation to calculate targeted profit or income? - Answers Change n from $0 to
desired profit
Variable - Answers Total costs change in direct proportion to changes in activity level
Fixed - Answers Total costs do not change despite changes in activity level
Mixed - Answers Costs that contain both a variable and a fixed component
Step costs - Answers fixed for a small range of volume, then jumps to a new level with a moderate
change in volume
Costs of goods sold expenses - Answers costs that can be directly related to a product or service
Operating expenses - Answers everything else used to run a business
A contribution income statement is based on - Answers cost behavior
Formula for contribution margin - Answers Sale - Variable Costs
Formula for operating income - Answers Contribution margin - fixed costs
Cost equation - Answers TC = (VC * X) + FC
How to find cost using high-low method - Answers 1. Identify data w/ highest/lowest points of ACTIVITY
2. Find the slope of the line (= variable cost/unit)
3. Find the vertical intercept (= fixed cost)
Regression Analysis: Intercept coefficient - Answers vertical coefficient/fixed cost
Regression Analysis: X Variable 1 - Answers Slope/variable cost
Regression Analysis: R square - Answers indicates how well the regression line fits the data point
Which method is the most accurate? - Answers Regression Analysis
Which Income Statement format do managers use to predict costs? - Answers CM I/S
Profit Equation - Answers SP(X) - VC(X) - FC
What is the contribution margin? - Answers Sales revenue left, after covering variable costs, to cover
fixed costs plus desired operating profit
Formula: Break-even point in Units - Answers $Amount to Cover/Unit CM$
Formula: CM% - Answers Unit CM$/Unit Sales price
How do I use the profit equation to calculate targeted profit or income? - Answers Change n from $0 to
desired profit
