Cost and Managerial
Accounting - D101 - Module
9-10 with 100% correct
answers
What is the purpose of using CVP analysis?
To study the difference between budgeted amounts
and actual amounts
To study the impact of opportunity costs on the
ability to outsource production
To study the interrelationships among revenues,
costs, levels of activity, and profits
To study the interrelationships among direct
materials, direct labor, manufacturing overhead,
and cost drivers
To study the interrelationships among revenues,
costs, levels of activity, and profits
CVP analysis involves studying the
interrelationships among revenues, costs, levels of
activity, and profits.
What is a mixed cost?
,A cost that includes both a fixed portion and a
variable portion
A cost that includes both a relevant range and an
irrelevant range
A cost that includes both a financial portion and a
managerial portion
A cost that includes both overhead costs and direct
materials costs
A cost that includes both a fixed portion and a
variable portion
A mixed cost is a cost that includes both a fixed
portion and a variable portion.
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What kind of cost is property taxes on a factory
building?
The property taxes may change each year, but that
does not mean that they are variable. A variable
cost is one that varies with the level of activity.
Factory property taxes vary from year to year, but
this variability is not caused by how many units are
produced in the factory. Thus, with respect to level
of activity, this cost is fixed.
What kind of cost is rent in a retail mall when the
rental agreement requires the tenant to pay a base
amount plus a percentage of sales?
The more pizzas sold, the more cheese needed.
Since the amount of cheese needed varies with the
number of pizzas sold, it is strictly a variable cost.
What is contribution margin?
Variable cost minus sales
Variable cost minus fixed cost
Sales minus variable cost
Sales minus fixed cost
Sales minus variable cost
Contribution margin is equal to sales revenue
minus variable costs. Contribution margin is the
amount of revenue that remains to cover fixed
costs and provide a profit for an organization.
Brown Beaver Company reported the following
data:
- Price per unit: $12
- Variable cost per unit: $7
- Fixed cost: $1,500
What is Brown Beaver's computed breakeven
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