UMUC ACCT221 Quiz 3 December 2015 (100% Answer) Graded

Question

Question 1 1 / 1 point

Variable costs, as activity increases, will:

Question options:

increase per unit.

increase in total.

remain constant per unit.

increase in total and remain constant per unit.

Question 2 1 / 1 point

A cost that increases in total, but not proportionately with increases in the activity level, is a(n):

Question options:

variable cost.

variable cost with an unusual behavior pattern.

fixed cost.

mixed cost.

Question 3 1 / 1 point

The assumptions that underlie basic CVP analysis include all of the following except:

Question options:

when more than one product is sold, total sales will be in a constant sales mix.

the behavior of both costs and revenues is linear throughout the relevant range.

All of three of the other choices are assumptions.

all costs can be classified as variable or fixed with reasonable accuracy.

Question 4 1 / 1 point

Jameson Company desires net income of $1,100,000 when it has $2,500,000 of fixed costs and variable costs of 60% of sales. Required sales equals:

Question options:

$6,250,000.

$2,750,000.

$9,000,000.

$6,000,000.

Question 5 1 / 1 point

A company's break-even point can be decreased by decreasing:

Question options:

the selling price.

the contribution margin.

variable costs per unit.

the contribution margin ratio.

Question 6 0 / 1 point

Sutton Company produced 98,000 units in 46,000 direct labor hours. Production for the period was estimated at 100,000 units and 50,000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at:

Question options:

50,000 hours and 46,000 hours.

49,000 hours and 46,000 hours.

49,000 hours and 50,000 hours.

46,000 hours and 46,000 hours.

Question 7 1 / 1 point

A flexible budget:

Question options:

is, in essence, a series of static budgets at different levels of activity.

can be prepared for each of the types of budgets included in a master budget.

increases budget allowances both directly and proportionately for variable costs as production increases.

All three of the other choices are correct.

Question 8 1 / 1 point

The initial budget prepared in the master budget is the:

Question options:

sales budget.

budgeted balance sheet.

production budget.

budgeted income statement.

Question 9 1 / 1 point

Which of the following is true with regard to budgeting vs. long-range planning?

Question options:

The maximum length for both usually is a year, with shorter periods of time also common.

Both tend to be very detailed.

They are the same in all significant aspects.

Budgeting is oriented more toward short-term goals; long-range planning toward long-term goals.

Question 10 1 / 1 point

Which of the following is false with regard to budgetary planning?

Question options:

The starting point for the budgets of a not-for-profit organization is generally receipts, rather than expenditures.

A merchandising company uses a purchases budget instead of a production budget.

Budgets may be used by manufacturing companies, merchandising companies, service enterprises, and not-for-profit organizations.

For a service enterprise, the critical factor in budgeting is coordinating professional staff needs with anticipated services.

Question 11 1 / 1 point

Which of the following is true with regard to budgetary planning?

Question options:

The cash budget is often considered to be the most important output in preparing financial budgets.

Generally accepted accounting principles require the budgets be prepared at least annually.

The human behavior aspects of budgeting, while they should not be ignored, are generally of little real significance.

The likelihood of a realistic budget is greater when the budget is developed from top management down to lower management.

Question 12 1 / 1 point

A static budget is:

Question options:

appropriate in evaluating a manager's effectiveness in controlling fixed costs.

applicable to cost budgets but not to a sales budget.

appropriate in evaluating a manager's effectiveness in controlling variable costs.

modified or adjusted for changes in activity during the year.

Question 13 1 / 1 point

The potential benefit that may be obtained by following an alternative course of action is termed a(n):

Question options:

incremental cost.

opportunity cost.

sunk cost.

avoidable cost.

Question 14 1 / 1 point

An order at a special price that is accepted will increase income if the revenue received exceeds the:

Question options:

fixed and variable costs associated with the order.

variable manufacturing, selling, and administrative costs associated with the order.

incremental costs associated with the order.

variable manufacturing costs associated with the order.

Question 15 1 / 1 point

Media Unlimited makes custom office desks. It can sell semi-finished desks for $800. Costs incurred to this point total $500. It can finish the desks at an additional cost of $200 and increase the selling price to $1,100. Media Unlimited should:

Question options:

finish the desks since it will increase profits $300 per desk.

finish the desks since it will increase profits $100 per desk.

sell the desks unfinished since finishing the desks will reduce profits.

finish the desks since it will increase profits $600 per desk.

Question 16 1 / 1 point

Given the following costs for Harper Company, classify each cost as variable, fixed, or mixed.

Total cost at

4,000 units 6,000 units

Cost A $12,300 $16,650

Cost B 17,200 25,800

Cost C 13,000 13,000

Question options:

Cost A and Cost B are variable; Cost C is fixed.

Cost A is mixed; Cost B is variable; Cost C is fixed.

Cost A and Cost B are mixed; Cost C is fixed.

Cost A is variable; Cost B is mixed; Cost C is fixed.

Question 17 1 / 1 point

Richmond Company manufactures a product that sells for $50 per unit. Richmond incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. Contribution margin per unit is:

Question 18 1 / 1 point

Richmond Company manufactures a product that sells for $50 per unit. Richmond incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. The breakeven point in dollars is:

Question 19 1 / 1 point

Richmond Company manufactures a product that sells for $50 per unit. Richmond incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. The margin of safety in dollars is:

Question 20 1 / 1 point

Richmond Company manufactures a product that sells for $50 per unit. Richmond incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. The number of units that must be sold in order to generate net income of $300,000 is:

 

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Answer:

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