Which of the following equations is true? Contribution margin ratio = Contribution margin/Variable costs Contribution margin = Fixed costs Contribution margin = Sales revenue x Variable cost ratio Contribution margin ratio = 1- Variable cost ratio
Which of the following would probably be a fixed cost in a fast-food restaurant? Cost of french fries Utility cost Shift manager's salary Cost of hamburger
Assigning costs? Involves the way that a cost is linked to some cost object. To a cost object using a reasonable and convenient method is allocation. Tells the company why the money was spent. All of these choices are correct.
Knowing how costs change as output changes is essential to: Controlling and decision making. Planning and controlling. Planning, controlling and decision making. None of these choices are correct.
Which of the following is an example of a discretionary fixed cost? Depreciation of equipment Insurance on automobiles Rental of machinery Advertising costs
Using the high-low method, the variable rate of a mixed cost equals: a. Total cost at high point - (variable rate x output at high point) b. Total cost at high point - (variable rate x output at low point) c. high point output - low point output high point cost - low point cost d. high point cost - low point cost high point output - low point output
Non-manufacturing costs include Direct materials. Indirect materials. Marketing and administration. Overhead.
Investigating production variances and adjusting the production process is an example of Planning. Decision making. Controlling. All of these choices are correct.
Pauley Company provides home health care. Pauley charges $35/hour for professional care. Variable costs are $21/hour and fixed costs are $78,000. Next year, Pauley expects to charge out 12,000 hours of home health care. Refer to Figure 4-2. What is the break-even point in sales dollars? a. $130,000 b. $342,000 c. $195,000 d. $420,000 e. $252,000
Gross margin equals: Cost of goods manufactured + selling and administrative expenses. Cost of goods sold - selling and administrative expenses. Sales revenue - cost of goods sold. Direct materials + direct labor + manufacturing overhead.
Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. What is the break-even point in units? 360 210 1,260 504 640
Price is not: The same as cost. Greater than cost in order for the firm to earn income. The revenue per unit. The same as cost per unit plus the income per unit.