1|Page
Managerial Accounting Comprehensive
Exam Prep Test Bank Covering Questions
from chapters 3-11/ BU247 Managerial
Accounting Latest Exam Practice Test Bank
with 100% Correctly Answered Questions
In markets where the organization faces a market-determined
price, the organization can set its price using cost plus pricing.
..........ANSWER.......False
The most widespread use of cost information is in budgeting.
..........ANSWER.......True
Governments are frequent users of cost reimbursement contracts.
..........ANSWER.......True
The salary of the company president is a fixed manufacturing cost.
..........ANSWER.......False
For external reporting, generally accepted accounting principles
require that costs be classified as either variable or fixed costs.
..........ANSWER.......False
Variable costs vary with the level of production or sales volume.
..........ANSWER.......True
,2|Page
Currently, most personnel costs are classified as fixed costs.
..........ANSWER.......True
Fixed costs depend on the resources acquired, not the resources
used. ..........ANSWER.......True
The time over which a decision maker can adjust capacity is
referred to as the short run. ..........ANSWER.......False
For general customers, the price charged for a product must cover
its long-run cost to the organization. ..........ANSWER.......False
In recent years, fixed costs have decreased as a proportion of total
manufacturing costs. ..........ANSWER.......False
Fixed costs:
a. May be either direct or indirect costs.
b. Vary with production or sales volume.
c. Include parts and materials used to manufacture a product.
d. Can be adjusted in the short run to meet actual demands.
..........ANSWER.......A
Fixed costs depend on:
a. The amount of resources used.
,3|Page
b. The amount of resources acquired.
c. The volume of production.
d. The volume of sales. ..........ANSWER.......B
Currently, most companies consider annual salary costs as:
a. A fixed cost.
b. A variable cost.
c. An opportunity cost.
d. A period cost. ..........ANSWER.......A
Which of the following describes a variable cost?
a. Variable cost are always indirect costs.
b. Variable costs increase in total when the actual level of activity
increases.
c. Variable costs include most personnel costs and depreciation on
machinery.
d. Variable costs can always be traced directly to the cost object.
..........ANSWER.......B
Break-even point is NOT an important concept since the goal of
business is to make a profit. ..........ANSWER.......False
To perform cost-volume-profit analysis, a company must be able
to separate costs into fixed and variable components.
..........ANSWER.......True
, 4|Page
Cost-volume-profit analysis may be used for single-product and
multiproduct analysis but not in a service environment.
..........ANSWER.......False
Selling price per unit is $60, variable cost per unit is $30, and
fixed cost per unit is $20. When this company operates above the
break-even point, the sale of one more unit will increase net
income by $10. ..........ANSWER.......False
A company with sales of $100,000, variable costs of $70,000, and
fixed costs of $50,000 will reach its break-even point if sales are
increased by $20,000. ..........ANSWER.......False
In multiproduct situations when the sales mix shifts toward the
product with the lowest contribution margin per unit, the break-
even quantity will decrease. ..........ANSWER.......False
Cost-volume-profit analysis is used PRIMARILY by management:
a. As a planning tool.
b. For control purposes.
c. To establish a target net income for next year.
d. To attain extremely accurate financial results.
..........ANSWER.......A
Contribution margin equals revenues minus:
Managerial Accounting Comprehensive
Exam Prep Test Bank Covering Questions
from chapters 3-11/ BU247 Managerial
Accounting Latest Exam Practice Test Bank
with 100% Correctly Answered Questions
In markets where the organization faces a market-determined
price, the organization can set its price using cost plus pricing.
..........ANSWER.......False
The most widespread use of cost information is in budgeting.
..........ANSWER.......True
Governments are frequent users of cost reimbursement contracts.
..........ANSWER.......True
The salary of the company president is a fixed manufacturing cost.
..........ANSWER.......False
For external reporting, generally accepted accounting principles
require that costs be classified as either variable or fixed costs.
..........ANSWER.......False
Variable costs vary with the level of production or sales volume.
..........ANSWER.......True
,2|Page
Currently, most personnel costs are classified as fixed costs.
..........ANSWER.......True
Fixed costs depend on the resources acquired, not the resources
used. ..........ANSWER.......True
The time over which a decision maker can adjust capacity is
referred to as the short run. ..........ANSWER.......False
For general customers, the price charged for a product must cover
its long-run cost to the organization. ..........ANSWER.......False
In recent years, fixed costs have decreased as a proportion of total
manufacturing costs. ..........ANSWER.......False
Fixed costs:
a. May be either direct or indirect costs.
b. Vary with production or sales volume.
c. Include parts and materials used to manufacture a product.
d. Can be adjusted in the short run to meet actual demands.
..........ANSWER.......A
Fixed costs depend on:
a. The amount of resources used.
,3|Page
b. The amount of resources acquired.
c. The volume of production.
d. The volume of sales. ..........ANSWER.......B
Currently, most companies consider annual salary costs as:
a. A fixed cost.
b. A variable cost.
c. An opportunity cost.
d. A period cost. ..........ANSWER.......A
Which of the following describes a variable cost?
a. Variable cost are always indirect costs.
b. Variable costs increase in total when the actual level of activity
increases.
c. Variable costs include most personnel costs and depreciation on
machinery.
d. Variable costs can always be traced directly to the cost object.
..........ANSWER.......B
Break-even point is NOT an important concept since the goal of
business is to make a profit. ..........ANSWER.......False
To perform cost-volume-profit analysis, a company must be able
to separate costs into fixed and variable components.
..........ANSWER.......True
, 4|Page
Cost-volume-profit analysis may be used for single-product and
multiproduct analysis but not in a service environment.
..........ANSWER.......False
Selling price per unit is $60, variable cost per unit is $30, and
fixed cost per unit is $20. When this company operates above the
break-even point, the sale of one more unit will increase net
income by $10. ..........ANSWER.......False
A company with sales of $100,000, variable costs of $70,000, and
fixed costs of $50,000 will reach its break-even point if sales are
increased by $20,000. ..........ANSWER.......False
In multiproduct situations when the sales mix shifts toward the
product with the lowest contribution margin per unit, the break-
even quantity will decrease. ..........ANSWER.......False
Cost-volume-profit analysis is used PRIMARILY by management:
a. As a planning tool.
b. For control purposes.
c. To establish a target net income for next year.
d. To attain extremely accurate financial results.
..........ANSWER.......A
Contribution margin equals revenues minus:
