ACCT 526 FINAL EXAM 2026 WITH
QUESTIONS AND ANSWERS
Overhead costs are assigned to production using an overhead application rate, whereas no such
application rate is used to assign the costs of direct materials and direct labor to production. The reason
for this difference in procedures is that: - correct answer <<<<<💕💕💕✔✔overhead is an indirect
cost which cannot be traced easily and directly
to specific units of product
An advantage of using regression analysis over the high-low and scattergraph methods is that - correct
answer <<<<<💕💕💕✔✔regression analysis is a more precise approach than the high-low or
scattergraph methods
An example of a discretionary fixed cost is: - correct answer <<<<<💕💕💕✔✔management
training
Tucker, Inc collected the following production data for the past month:
Units Produced Total Cost
1,600 1,300 1,500 1,100
$22,000 19,000 22,500 16,500
If the high-low method is used, what is the monthly total cost equation? - correct answer
<<<<<💕💕💕✔✔Total cost = $4,400 + $11/unit
Roddy Company has the following cost formulas for overhead:
Cost
Indirect materials Maintenance Machine setup Utilities Depreciation
Cost Formula
$2,000 + $0.40/machine hour $1,500 + $0.60/machine hour $0.30/machine hour$200 + $0.10/machine
hour $800
, Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be: - correct
answer <<<<<💕💕💕✔✔$5,340
When comparing a traditional income statement to a contribution margin income statement: - correct
answer <<<<<💕💕💕✔✔net income will always be identical on both
Kendra Corporation sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is
$200,000. What should be reported as variable expenses in the CVP income statement? - correct
answer <<<<<💕💕💕✔✔$700,000
Snyder Corporation, which produces and sells a single product, recently experienced an increase in fixed
costs relating to depreciation on new equipment. If variable costs and sales price remain unchanged,
what will happen to contribution margin and the break-even point? - correct answer
<<<<<💕💕💕✔✔contribution margin will be unchanged and the break-even point will increase
The following is last month's contribution format (CVP) income statement:
Sales (10,000 units) Less: variable expenses Contribution margin Less: fixed expenses Net income
$1,200,000 800,000 400,000 240,000 $160,000
What is the company's break-even sales in units? - correct answer <<<<<💕💕💕✔✔6,000 units
A 45% contribution margin ratio means that: - correct answer <<<<<💕💕💕✔✔45% of the
company's revenue is available to cover fixed costs and to contribute toward operating income.
Suppose Motel 6 has annual fixed costs applicable to its rooms of $1.2 million for its 300-room motel,
average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365
days per year.
How much net income on rooms will be generated if the motel is completely full throughout the entire
year? - correct answer <<<<<💕💕💕✔✔$3,180,000
Brant Company manufactures a part for its production cycle. The costs per unit for 5,000 units of this
part are as follows:
Direct materials $3 Direct labor 5 Variable factory overhead 4 Fixed factory overhead 2 Total costs $14
The fixed factory overhead costs are unavoidable.
QUESTIONS AND ANSWERS
Overhead costs are assigned to production using an overhead application rate, whereas no such
application rate is used to assign the costs of direct materials and direct labor to production. The reason
for this difference in procedures is that: - correct answer <<<<<💕💕💕✔✔overhead is an indirect
cost which cannot be traced easily and directly
to specific units of product
An advantage of using regression analysis over the high-low and scattergraph methods is that - correct
answer <<<<<💕💕💕✔✔regression analysis is a more precise approach than the high-low or
scattergraph methods
An example of a discretionary fixed cost is: - correct answer <<<<<💕💕💕✔✔management
training
Tucker, Inc collected the following production data for the past month:
Units Produced Total Cost
1,600 1,300 1,500 1,100
$22,000 19,000 22,500 16,500
If the high-low method is used, what is the monthly total cost equation? - correct answer
<<<<<💕💕💕✔✔Total cost = $4,400 + $11/unit
Roddy Company has the following cost formulas for overhead:
Cost
Indirect materials Maintenance Machine setup Utilities Depreciation
Cost Formula
$2,000 + $0.40/machine hour $1,500 + $0.60/machine hour $0.30/machine hour$200 + $0.10/machine
hour $800
, Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be: - correct
answer <<<<<💕💕💕✔✔$5,340
When comparing a traditional income statement to a contribution margin income statement: - correct
answer <<<<<💕💕💕✔✔net income will always be identical on both
Kendra Corporation sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is
$200,000. What should be reported as variable expenses in the CVP income statement? - correct
answer <<<<<💕💕💕✔✔$700,000
Snyder Corporation, which produces and sells a single product, recently experienced an increase in fixed
costs relating to depreciation on new equipment. If variable costs and sales price remain unchanged,
what will happen to contribution margin and the break-even point? - correct answer
<<<<<💕💕💕✔✔contribution margin will be unchanged and the break-even point will increase
The following is last month's contribution format (CVP) income statement:
Sales (10,000 units) Less: variable expenses Contribution margin Less: fixed expenses Net income
$1,200,000 800,000 400,000 240,000 $160,000
What is the company's break-even sales in units? - correct answer <<<<<💕💕💕✔✔6,000 units
A 45% contribution margin ratio means that: - correct answer <<<<<💕💕💕✔✔45% of the
company's revenue is available to cover fixed costs and to contribute toward operating income.
Suppose Motel 6 has annual fixed costs applicable to its rooms of $1.2 million for its 300-room motel,
average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365
days per year.
How much net income on rooms will be generated if the motel is completely full throughout the entire
year? - correct answer <<<<<💕💕💕✔✔$3,180,000
Brant Company manufactures a part for its production cycle. The costs per unit for 5,000 units of this
part are as follows:
Direct materials $3 Direct labor 5 Variable factory overhead 4 Fixed factory overhead 2 Total costs $14
The fixed factory overhead costs are unavoidable.
