ACCOUNTING 526 FINAL COMPLETE EXAM QUESTIONS
AND ANSWERS TO HELP YOU PASS
fluctuate proportionately to volume changes (for example, total variable cost
rises as volume rises); cost per unit stays constant - ANSWER variable cost
When volume fluctuates or rises, the total cost remains constant; when volume
rises, the cost per unit falls. ANSWER fixed cost
The ANSWER cost equation is a mathematical formula that is only applicable
within the pertinent range and is used to forecast total cost at different volume
levels.
What is the cost equation formula? The response Y = v(x) + f
Y is the overall blended cost.
V is the variable cost per activity unit.
X is the activity volume, and F is the fixed cost for a certain time period.
There are two methods to report income to external users. 1. Income statement
in one step
2. A multi-step income statement
The ANSWER contribution margin income statement format is utilized for
internal reporting and decision-making but is not appropriate for external
reporting.
What is the contribution margin formula? The response Revenues minus
variable costs equals the contribution margin.
, How Do You Calculate Operating Income? The response Contribution Margin
minus Fixed Costs is Operating Income.
OR Sales revenue (sales price * units sold) = Operating Income Fixed costs;
variable costs (variable cost per unit * units sold)
analysis that aids managers in making critical business decisions; it examines
the connection between expenses, volume, and profit or loss; it calculates the
monthly sales required for a business to break even or cover costs. ANSWER
Analysis of Cost Volume Profit (CVP)
ANSWER breakeven point is the sales level at which operating income is zero.
Three methods for figuring the breakeven 1. The income statement method
2. Using the unit contribution margin as a shortcut
3. Using the contribution margin ratio as a shortcut
What is the Contribution Margin per unit formula? The response Contribution
Sales price per unit minus variable price per unit equals margin per unit.
What is the formula for the contribution margin ratio? The response The
contribution margin per unit divided by the sales price per unit is the
contribution margin ratio.
indicates how much of each dollar of sales can be used to fixed costs and profits
( ANSWER contribution margin per unit).
The ANSWER contribution margin ratio displays the portion of each sales
dollar that can be used to fixed costs and profits.
AND ANSWERS TO HELP YOU PASS
fluctuate proportionately to volume changes (for example, total variable cost
rises as volume rises); cost per unit stays constant - ANSWER variable cost
When volume fluctuates or rises, the total cost remains constant; when volume
rises, the cost per unit falls. ANSWER fixed cost
The ANSWER cost equation is a mathematical formula that is only applicable
within the pertinent range and is used to forecast total cost at different volume
levels.
What is the cost equation formula? The response Y = v(x) + f
Y is the overall blended cost.
V is the variable cost per activity unit.
X is the activity volume, and F is the fixed cost for a certain time period.
There are two methods to report income to external users. 1. Income statement
in one step
2. A multi-step income statement
The ANSWER contribution margin income statement format is utilized for
internal reporting and decision-making but is not appropriate for external
reporting.
What is the contribution margin formula? The response Revenues minus
variable costs equals the contribution margin.
, How Do You Calculate Operating Income? The response Contribution Margin
minus Fixed Costs is Operating Income.
OR Sales revenue (sales price * units sold) = Operating Income Fixed costs;
variable costs (variable cost per unit * units sold)
analysis that aids managers in making critical business decisions; it examines
the connection between expenses, volume, and profit or loss; it calculates the
monthly sales required for a business to break even or cover costs. ANSWER
Analysis of Cost Volume Profit (CVP)
ANSWER breakeven point is the sales level at which operating income is zero.
Three methods for figuring the breakeven 1. The income statement method
2. Using the unit contribution margin as a shortcut
3. Using the contribution margin ratio as a shortcut
What is the Contribution Margin per unit formula? The response Contribution
Sales price per unit minus variable price per unit equals margin per unit.
What is the formula for the contribution margin ratio? The response The
contribution margin per unit divided by the sales price per unit is the
contribution margin ratio.
indicates how much of each dollar of sales can be used to fixed costs and profits
( ANSWER contribution margin per unit).
The ANSWER contribution margin ratio displays the portion of each sales
dollar that can be used to fixed costs and profits.
