ACCT 526 STUDY SHEET 2026 UPDATED
QUESTIONS AND SOLUTIONS
◉ c. $0.5625
Contribution Margin per unit = Sales Price per unit ($1) - Variable
Price per unit [(260,000+90,000) / 800,000] = 0.4375
= 0.5625.
Answer: Clear Springs Bottling Company produces a soft drink that
is sold for a dollar. The company pays $400,000 in production costs,
of which $260,000 are variable production costs. General, selling
and administrative costs amount to $290,000 of which $90,000 are
variable costs. Assuming production and sales of 800,000 units,
what is the amount of contribution margin per unit?
a. $0.3125
b. None of these are correct
c. $0.5625
d. $0.1375
◉ a. $120,000
Sales Revenue - Variable expenses = 20,000 (10-4).
Answer: Cinder Block industries currently produces and sells 20,000
units of product at a selling price of $10. The product has variable
,costs of $4 per unit and a fixed cost of $50,000. The company
currently earns a total contribution margin of:
a. $120,000
b. $200,000
c. $50,000
d. $70,000
◉ Planning.
Answer: ___ establishes goal
◉ Describe a financial accountant..
Answer: provides historical information to external users in
accordance with GAAP
◉ Describe a managerial accountant..
Answer: - provides detailed financial information and non financial
information to internal users for decision making, planning, and
control purposes
- planning, directing, controlling
◉ Control.
Answer: ___ assesses whether goals were achieved.
,◉ Describe the hierarchy of typical organization..
Answer: Board of directors
CEO
VP and CFO
Controller, treasurer, and internal auditor
Managerial accountant, financial accountant, and tax accountant
◉ Describe IMA and ethical decision making..
Answer: Use resources provided by internal company policies
Four standards: competence, confidentiality, integrity, credibility
Yes, consult an attorney regarding your rights!
◉ Describe ERP systems..
Answer: - benefits must outweigh cost of implement
- recording, sorting, analyzing, and reporting financial information
for internal users
- instant worldwide updates
◉ Describe manufacturing costs.
Answer: costs (product costs) are classified as DM, DL or MFOH and
expensed when sold
, ◉ Describe nonmanufacturing costs..
Answer: costs (period costs) are not related to production and are
classified as selling costs or general and administrative costs and
expensed in the period in which it was incurred
◉ Describe inventory accounts..
Answer: - raw material inventory account
- work-in-process inventory account
- finished goods inventory account
- ALL asset accounts on the balance sheet
- COGS is recorded as an expense when inventory is sold and
appears on the income statement, NOT balance sheet!
◉ Describe income statement of merchandising company..
Answer: - merchandise inventory account
- use term net purchases
- include schedule of COGS in income statement
◉ Describe job costing.
Answer: used for unique products
QUESTIONS AND SOLUTIONS
◉ c. $0.5625
Contribution Margin per unit = Sales Price per unit ($1) - Variable
Price per unit [(260,000+90,000) / 800,000] = 0.4375
= 0.5625.
Answer: Clear Springs Bottling Company produces a soft drink that
is sold for a dollar. The company pays $400,000 in production costs,
of which $260,000 are variable production costs. General, selling
and administrative costs amount to $290,000 of which $90,000 are
variable costs. Assuming production and sales of 800,000 units,
what is the amount of contribution margin per unit?
a. $0.3125
b. None of these are correct
c. $0.5625
d. $0.1375
◉ a. $120,000
Sales Revenue - Variable expenses = 20,000 (10-4).
Answer: Cinder Block industries currently produces and sells 20,000
units of product at a selling price of $10. The product has variable
,costs of $4 per unit and a fixed cost of $50,000. The company
currently earns a total contribution margin of:
a. $120,000
b. $200,000
c. $50,000
d. $70,000
◉ Planning.
Answer: ___ establishes goal
◉ Describe a financial accountant..
Answer: provides historical information to external users in
accordance with GAAP
◉ Describe a managerial accountant..
Answer: - provides detailed financial information and non financial
information to internal users for decision making, planning, and
control purposes
- planning, directing, controlling
◉ Control.
Answer: ___ assesses whether goals were achieved.
,◉ Describe the hierarchy of typical organization..
Answer: Board of directors
CEO
VP and CFO
Controller, treasurer, and internal auditor
Managerial accountant, financial accountant, and tax accountant
◉ Describe IMA and ethical decision making..
Answer: Use resources provided by internal company policies
Four standards: competence, confidentiality, integrity, credibility
Yes, consult an attorney regarding your rights!
◉ Describe ERP systems..
Answer: - benefits must outweigh cost of implement
- recording, sorting, analyzing, and reporting financial information
for internal users
- instant worldwide updates
◉ Describe manufacturing costs.
Answer: costs (product costs) are classified as DM, DL or MFOH and
expensed when sold
, ◉ Describe nonmanufacturing costs..
Answer: costs (period costs) are not related to production and are
classified as selling costs or general and administrative costs and
expensed in the period in which it was incurred
◉ Describe inventory accounts..
Answer: - raw material inventory account
- work-in-process inventory account
- finished goods inventory account
- ALL asset accounts on the balance sheet
- COGS is recorded as an expense when inventory is sold and
appears on the income statement, NOT balance sheet!
◉ Describe income statement of merchandising company..
Answer: - merchandise inventory account
- use term net purchases
- include schedule of COGS in income statement
◉ Describe job costing.
Answer: used for unique products
