CAMA Quiz

Which of the following would not be an example of a fixed cost?

• The electricity bill paid for production

• The rent paid for a warehouse

• The depreciation on a factory building

• The property taxes paid on real estate

Which of the following groups would be least likely to receive detailed management accounting reports?

• Stockholders

• Sales managers

• Production supervisors

• Distribution managers

Which of the following is true of planning in decision making?

• It helps an organization to select goals and strategies

• It improves the quality of products

• It helps in evaluating performance

• All above

If the selling price per unit increases, the break-even point in units will

• Decrease

• Increase

• Remain the same

• Remain the same; however, contribution per unit will increase

Knowing how costs change as output changes is essential to

• Planning and controlling

• Controlling and decision making

• Planning, controlling, and decision making

• Integrating strategy

Using the high-low method, calculate the fixed cost of leasing for Glascro Company based on the following data: April ($15,000, 800 hours), May ($10,000, 600 hours), June ($12,000, 770 hours), July ($16,000, 1,000 hours).

• $2,000

• $1,500

• $2,500

• $1,000

Total contribution margin divided by total sales is the

• Contribution margin per unit

• Margin of safety

• Sales ratio

• Contribution margin ratio

Rocha & Noel Company makes and sells dolls. The price is $15 and the variable expense per unit is $10. What is the contribution margin ratio? (Round to two decimal places.)

• 62.55%

• 37.45%

• 55.67%

• 33.33%

Variable costs within the relevant range

• Stay constant on a per unit basis as output changes

• Increase in total as output increases

• Decrease in total as output decreases

• All of these are correct

Taran Company incurred the following costs for January and February: Insurance ($5,000, $5,000), Utilities ($4,000, $5,000), Depreciation ($3,500, $3,500), Materials ($10,000, $20,000). From this information, we can assume that

• Insurance and depreciation are fixed costs

• Output decreased from January to February

• Output stayed the same from January to February

• Insurance is a mixed cost