ACC 561 Final Exam Guide New
1. The investigation of materials price variance usually begins in the:
controller’s office.
accounts payable department.
first production department.
purchasing department
2. Hollis Industries produces flash drives for computers, which it sells for $20 each. Each
flash drive costs $13 of variable costs to make. During April, 1,000 drives were sold. Fixed
costs for March were $2 per unit for a total of $1,000 for the month. How much is the
contribution margin ratio?
35%
25%
75%
65%
Revenue = 20000
Variable Expenses = 13000
Contribution Margin = 7000
(20000-13000)/20000 = 0.35
Hollis Industries Contribution Margin Ratio is 35%
3. Which of the following statements is not true?
When a company’s sales revenue is decreasing, high operating leverage is good because it
means that profits will decrease at a slower pace than revenues decrease.
1. The investigation of materials price variance usually begins in the:
controller’s office.
accounts payable department.
first production department.
purchasing department
2. Hollis Industries produces flash drives for computers, which it sells for $20 each. Each
flash drive costs $13 of variable costs to make. During April, 1,000 drives were sold. Fixed
costs for March were $2 per unit for a total of $1,000 for the month. How much is the
contribution margin ratio?
35%
25%
75%
65%
Revenue = 20000
Variable Expenses = 13000
Contribution Margin = 7000
(20000-13000)/20000 = 0.35
Hollis Industries Contribution Margin Ratio is 35%
3. Which of the following statements is not true?
When a company’s sales revenue is decreasing, high operating leverage is good because it
means that profits will decrease at a slower pace than revenues decrease.
