Which of the following is an example of a service?

• motorcycle

• eye exam

• stereo

• television

Which of the following is an example of a tangible product?

• lawn care

• accounting services

• customer service

• computer

Costs are subdivided into what two major functional categories?

• opportunity and allocation

• fixed and variable

• product and non-production

• direct and indirect

Which of the following would not be a period cost?

• research and development

• direct materials

• advertising costs

• office supplies

Which of the following would be an example of a direct materials cost?

• engine on an airplane

• lubricant used to manufacture a lighting fixture

• glue used to build cabinets

• nails used to manufacture a table

Period costs

• are selling costs and administrative costs.

• are used to compute product cost.

• can be included in overhead costs.

• are carried in inventory until the goods are sold.

The break-even point is when

• the company is operating at a loss.

• total revenue equals total cost.

• the company is earning a small profit.

• total sales equals operating income.

Total contribution margin divided by total sales is the

• indifference point.

• margin of safety.

• target income.

• contribution margin ratio.

At the break-even point,

• total revenue equals variable cost.

• total fixed cost equals variable cost.

• total contribution margin equals total fixed cost.

• total margin of safety equals variable cost.

Contribution margin ratio can be calculated in all of the following ways except

• fixed costs / Contribution margin per unit.

• 1 − Variable cost ratio.

• contribution margin per unit / price.

• total contribution margin / Total sales.