Principles of Accounting II- Please help me to answer these questions and explanation so I can re-read through the chapters and understand better.

Question 1

In a process costing system, each process will have a work in process inventory account.

	True
	False

Explanation:

Question 2

Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17. What amount of units must be sold in order to realize an operating income of $100,000?

	5,000
	41,176
	47,059
	58,882

Explanation:

Question 3

Edna’s Chocolates had planned to sell chocolate-covered strawberries for $3.00 each. Due to various factors, the actual price was $2.75. Edna’s was able to sell 1,000 more strawberries than the anticipated 4,000. What is (1) the quantity factor and (2) the price factor for sales?

	(1) $3,000, (2) $(1,250)
	(1) $3,000, (2) $(3,000)
	(1) $1,250, (2) $3,000
	(1) $(4,000) (2) $(3,000)

Explanation:

Question 4

The contribution margin ratio is the same as the profit-volume ratio.

	True
	False

Explanation:

Question 5

Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710.

The number of equivalent units of production for the period for materials if the first-in, first-out method is used to cost inventories was

	16,700
	12,000
	1,700
	13,700

Explanation:

Question 6

If the costs of direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

	True
	False

Explanation:

Question 7

The contribution margin ratio is computed as:

	sales divided by contribution margin
	contribution margin divided by sales
	contribution margin divided by cost of sales
	contribution margin divided by variable cost of sales

Explanation:

Question 8

Match each business that follows to the type of costing system (a or b) it would typically use.

	Home construction
	Flour mill
	Movie studio
	Paper manufacturer
	Gasoline refinery

1.	Job order costing
2.	Process costing

Explanation:

Question 9

Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies?

	only variable costing
	only absorption costing
	both variable and absorption costing
	neither variable nor absorption costing

Explanation:

Question 10

The contribution margin ratio is

	the same as the variable cost ratio
	the same as profit
	the portion of equity contributed by the stockholders
	the same as the profit-volume ratio

Explanation:

Question 11

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

	45%
	55%
	62%
	32%

Explanation:

Question 12

Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, the total fixed costs are

	$21,000
	$25,400
	$42,000
	$13,000

Explanation:

Question 13

The contribution margin and the manufacturing margin are usually equal.

	True
	False

Explanation:

Question 14

All of the following are characteristics of a process cost system except

	the system may use several work in process inventory accounts
	manufacturing costs are grouped by department rather than by jobs
	the system accumulates costs per job
	the system emphasizes time periods rather than the time it takes to complete a job

Explanation:

Question 15

Match the following terms (a-e) with their definitions.

	Contribution margin divided by income from operations
	Plots only the difference between total sales and total costs
	Graphically shows costs, sales, and operating profit or loss at various levels of units sold
	Indicates the possible decrease in sales that may occur before operating loss results
	The relative distribution of sales among products sold by a company

1.	Profit-volume chart
2.	Cost-volume-profit chart
3.	Sales mix
4.	Operating leverage
5.	Margin of safety

Explanation:

Question 16

Which of the following causes the difference between the planned and actual contribution margin?

	an increase or decrease in the amount of sales
	an increase in the amount of variable costs and expenses
	a decrease in the amount of variable costs and expenses
	all of the above

Explanation:

Question 17

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

	True
	False

Explanation:

Question 18

If the contribution margin ratio for France Company is 45%, sales were $425,000, and the fixed costs were $100,000, what was the income from operations?

	$233,750
	$91,250
	$191,250
	$133,750

Explanation:

Question 19

Contribution margin reporting and analysis is appropriate only for manufacturing firms, not for service firms.

	True
	False

Explanation:

Question 20

Harley Company has sales of $500,000, variable costs are 75% of sales, and operating income is $40,000. What is Harley's operating leverage?

	0.0
	1.2
	1.3
	3.1

Question 21

Cost behavior refers to the manner in which a cost changes as the related activity changes.

	True
	False

Explanation:

Question 22

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

	True
	False

Explanation:

Question 23

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

	True
	False

Explanation:

Question 24

Break-even analysis is one type of cost-volume-profit analysis.

	True
	False

Explanation:

Question 25

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, the total fixed costs are

	$61,875
	$33,875
	$24,750
	cannot be determined from the data given

Explanation:

Question 26

Contribution margin is

	the excess of sales revenue over variable cost
	another term for volume in the "cost-volume-profit" analysis
	profit
	the same as sales revenue

Explanation:

Question 27

Match the following terms with their definitions.

	A specific activity range over which the cost changes are of interest.
	Remain the same in total dollar amount as the level of activity changes
	Vary in proportion to changes in activity levels
	Where a business’s revenues exactly equal costs
	The excess of sales revenues over variable costs

1.	Relevant range
2.	Break-even point
3.	Contribution margin
4.	Fixed costs
5.	Variable costs

Explanation:

Question 28

Make-or-buy options often arise when a manufacturer has excess productive capacity in the form of unused equipment, space, and labor.

	True
	False

Explanation:

Question 29

In addition to the differential costs in an equipment-replacement decision, the remaining useful life of the old equipment and the estimated life of the new equipment are important considerations.

	True
	False

Explanation:

Question 30

All of the following should be considered in a make-or-buy decision except

	cost savings
	quality issues with the supplier
	future growth in the plant and other production opportunities
	whether the supplier will make a profit that would no longer belong to the business

Explanation: