ACCT 526 Mid-Term Exam.

Question 1 Correct Mark 3.00 out of 3.00 Question 2 Correct Mark 3.00 out of 3.00 Started on Monday, 18 September 2017, 9:40 PM State Finished Completed on Monday, 18 September 2017, 10:40 PM Time taken 59 mins 59 secs Grade 75.00 out of 120.00 (63%) All public companies that are traded on a stock exchange and governed by the Securities and Exchange Commission (SEC) must prepare financial statements following Select one: a. generally accepted accounting principles b. accounting principles set by the Federal Trade Commission c. standards set by the Accounting Principles Board d. generally appropriate accounting standards Your answer is correct. The correct answer is: generally accepted accounting principles In defining a cost as fixed, the accountant must consider Select one: a. the contribution margin b. projected sales revenue c. the variable costs d. the relevant range Your answer is correct. The correct answer is: the relevant range ACCT526-850_010- Question 3 Incorrect Mark 0.00 out of 3.00 Question 4 Correct Mark 3.00 out of 3.00 There is an important relationship between contribution margin and profit. Which of the following statements is NOT true? Select one: a. as the number of units sold increases, total contribution margin and fixed costs increase b. as the number of units sold rises, profit increases by the additional contribution margin per unit c. as the number of units sold decreases, total contribution margin decreases, but fixed costs remain the same d. as the number of units sold increases, total contribution margin increases, but fixed costs remain the same Your answer is incorrect. The correct answer is: as the number of units sold increases, total contribution margin and fixed costs increase An example of a discretionary fixed cost is: Select one: a. management training b. depreciation of buildings and equipment c. insurance d. taxes on real estate Your answer is correct. The correct answer is: management training Question 5 Correct Mark 3.00 out of 3.00 Question 6 Incorrect Mark 0.00 out of 3.00 The following data pertain to activity and costs for two recent months: Activity level in units October 5,000 November 10,000 Variable costs $10,000 ? Fixed costs 30,000 ? Mixed costs 20,000 ? Total costs $60,000 $75,000 Assuming that these activity levels are within the relevant range, the mixed costs for November were: Select one: a. $20,000 b. $25,000 c. $35,000 d. $40,000 Your answer is correct. The correct answer is: $25,000 A limitation of using the scattergraph method to estimate the cost components of total cost is Select one: a. the scattergraph method requires the use of statistical software b. the choice of the line used to estimate the cost components is subjective c. the scattergraph method is not an accepted method for many companies d. the scattergraph method is complex and costly to use Your answer is incorrect. The correct answer is: the choice of the line used to estimate the cost components is subjective