ACC 241 -Exam II Practice Q's Ch. 7, 8, 12 Study Guide with Valid Solutions

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. TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/26 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 TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/26 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. TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 4/26 2. A decrease in the sales price per unit. 3. A decrease in variable costs per unit. 4. A decrease in sales volume. - ️️ Correct-A decrease in variable costs per unit. Given breakeven sales in units of 28,000 and a unit contribution margin of $4, how many units must be sold to reach a target operating income of