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WorksheetsREVISION 4 : TOPIC 3, 4, 5 & 7
Total questions: 20
Worksheet time: 15mins
For an activity base to be useful in cost behavior analysis,
the activity should always be stated in a currency unit.
there should be a correlation between changes in the level of activity and changes in costs.
the activity should always be stated in terms of units.
the activity level should be constant over a period of time
A variable cost is a cost that
varies per unit at every level of activity.
occurs at various times during the year.
varies in total in proportion to changes in the level of activity.
may or may not be incurred, depending on management's discretion
A cost which remains constant per unit at various levels of activity is a
variable cost.
fixed cost.
mixed cost.
manufacturing cost
An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:
Unit of Variable cost will Increases and Unit of Fixed Cost will
Decreases
Unit of Variable Cost Remain constants and Unit of Fixed cost also Remains constant
Unit of Variable Cost will Decreases and Unit of Fixed Cost Remains constant
Unit of Variable Cost Remain constants and Unit of Fixed Cost
will Decreases
A fixed cost is a cost which
varies in total with changes in the level of activity.
constant per unit with changes in the level of activity.
varies inversely in total with changes in the level of activity.
remains constant in total with changes in the level of activity
Cost behavior analysis is a study of how a firm's costs
relate to competitors' costs.
relate to general price level changes.
respond to changes in the level of business activity.
respond to changes in the gross national product
Which of the following is not a cost classification?
Mixed
Multiple
Variable
Fixed
In using the high-low method, the fixed cost
is determined by subtracting the total cost at the high level of activity from the total cost at the low activity level.
is determined by adding the total variable cost to the total cost at the low activity level.
is determined before the total variable cost.
may be determined by subtracting the total variable cost from either the total cost at the low or high activity level
Which one of the following is not an assumption of CVP analysis?
All units produced are sold.
All costs are variable costs.
Sales mix remains constant.
The behavior of costs and revenues are linear within the relevant range
The equation which reflects a CVP income statement is
Sales = Cost of goods sold + Operating expenses + Net income.
Sales + Fixed costs = Variable costs + Net income.
Sales – Variable costs + Fixed costs = Net income.
Sales – Variable costs – Fixed costs = Net income.
The break-even point is where
total sales equal total variable costs.
contribution margin equals total fixed costs.
total variable costs equal total fixed costs.
total sales equal total fixed costs.
The amount by which actual or expected sales exceeds break-even sales is referred to as
contribution margin.
unanticipated profit.
margin of safety.
target net income
In evaluating the margin of safety, the
break-even point is not relevant.
higher the margin of safety ratio, the greater the margin of safety.
higher the amount, the lower the margin of safety.
higher the margin of safety ratio, the lower the fixed costs.
Which of the following would be accounted for using a job order cost system?
The production of personal computers.
The production of automobiles.
The refining of petroleum.
The construction of a new campus building.
An important feature of a job order cost system is that each job
must be similar to previous jobs completed.
has its own distinguishing characteristics.
must be completed before a new job is accepted.
consists of one unit of output.
When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is
Dr. Finished Goods Inventory
Cr. Direct Materials
Direct Labor
Manufacturing Overhead
Dr. Work In Process Inventory
Cr. Direct Materials
Direct Labor
Manufacturing Overhead
Dr. Raw Materials Inventory
Cr. Work In Process Inventory
Dr. Finished Goods Inventory
Cr. Work In Process Inventory
The entry to record the acquisition of raw materials on account is
Dr. Work in Process Inventory
Cr. Accounts Payable
Dr. Manufacturing Overhead
Cr. Raw Materials Inventory
Accounts Payable
Dr. Accounts Payable
Cr. Raw Materials Inventory
Dr. Raw Materials Inventory
Cr. Accounts Payable
Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?
The total of the amounts transferred from raw materials for the current period
The sum of the costs shown on the job cost sheets of unfinished jobs
The total of manufacturing overhead applied to work in process for the period
The total manufacturing costs for the period
If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be
underapplied.
overapplied.
in error.
prepaid.
The existence of under- or overapplied overhead at the end of the year:
requires an adjustment to Cost of Goods Sold.
indicates that an error has been made.
requires a retroactive adjustment to the cost of all jobs completed.
is written off as a bad estimate expense
