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ACC 241 -Exam II Practice Q's Ch. 7, 8,
12 Study Guide with Valid Solutions
At the breakeven point, contribution margin equals revenue.
True
False - ✔️✔️Correct-False
If there is little or no relationship between the cost and the volume, the data points on a
scatter plot will appear almost as a straight line.
True
False - ✔️✔️Correct-False
Operating leverage is the use of fixed cost to extract higher percentage changes in
profits as sales activity changes.
True
False - ✔️✔️Correct-True
Future costs that differ across alternatives are relevant costs.
True
False - ✔️✔️Correct-True
In deciding the optimal mix of products that use a constrained resource, it is important to
determine the contribution margin per unit of scarce resource.
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True
False - ✔️✔️Correct-True
The two major categories of capital investment decision models are non-discounting
models and discounting models.
True
False - ✔️✔️Correct-True
In order to use the payback period model, the proposed investment must have even
cash inflows.
True
False - ✔️✔️Correct-False
Both the payback period and the accounting rate of return ignore the time value of
money.
True
False - ✔️✔️Correct-True
Both the payback period and the accounting rate of return do not consider the
profitability of a project over its life span.
True
False - ✔️✔️Correct-False
If the net present value of an investment is zero, the investment earns less than the
minimum required rate of return.
True
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FIRST PUBLISHED: SEPTEMBER 2024
False - ✔️✔️Correct-False
Tyler Corporation is a wholesaler that sells a single product. Management has provided
the following cost data for two levels of monthly sales volume. The company sells the
product for $127.20 per unit.
Sales volume (units): 5,000 6,000
Cost of Sales: $419,000 $502,800
Selling and Administrative costs: $186,500 $202,200
The best estimate of the total contribution margin when 5,300 units are sold is:
- $146,810
- $230,020
- $51,410
- $32,330 - ✔️✔️Correct-$146,810
VC per unit:[705,000 (502,800 + 202,200) - 605,500(419,000 + 186,500)] / 6,000 -
5,000 = $99.50$127.20 (SP) -$99.50 (VC) = $27.70 (CM) x 5,300 (units) = $146,810
All else being equal, which of the following would not cause the contribution margin to
decrease?
1. An increase in total variable costs.
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