Acc 560 Wk 5 Quiz 6 - All Possible Questions

ACC 560 WK 5 Quiz 6 - All Possible Questions

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ACC 560 WK 5 Quiz 6 - All Possible Questions

TRUE-FALSE STATEMENTS

    1.     The CVP income statement classifies costs as variable or fixed and computes a contribution margin.

    2.     In CVP analysis, cost includes manufacturing costs but not selling and administrative expenses.

    3.     When a company is in its early stages of operation, its primary goal is to generate a target net income.

    4.     The margin of safety tells a company how far sales can drop before it will be operating at a loss.

    5.     Sales mix is a measure of the percentage increase in sales from period to period.

    6.     Sales mix is not important to managers when different products have substantially different contribution margins.

    7.     The weighted-average contribution margin of all the products is computed when determining the break-even sales for a multi-product firm.

    8.     If Buttercup, Inc. sells two products with a sales mix of 75% : 25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120.

    9.     If fixed costs are $100,000 and weighted-average unit contribution margin is $50, then the break-even point in units is 2,000 units.

  10.     Net income can be increased or decreased by changing the sales mix.

  11.     The break-even point in dollars is variable costs divided by the weighted-average contribution margin ratio.

  12.     When a company has limited resources, management must decide which products to make and sell in order to maximize net income.

  13.     When a company has limited resources to manufacture products, it should manufacture those products which have the highest contribution margin per unit.

  14.     If a company has limited machine hours available...