A306 Exam 1 Questions and Answers Already Passed Latest Update 2025
Which of the following statements is false?
a. Creditors would be a user of financial accounting
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required - Answers c.
Financial accounting information emphasizes decisions for the future
Which best describes management accounting
a. it is mainly focused on past results
b. the reports are rules based using GAAP
c. the main users of management accounting information are outside the firm
d. the reports are prepared following the national management accounting standards (NMAS)
e. management accounting is primarily used for decision making - Answers e. management accounting is
primarily used for decision making
Which of the following statements is false?
a. prime costs are always direct costs
b. manufacturing costs can be direct or indirect
c. selling and admin costs are only indirect
d. direct labor is both a prime cost and a conversion cost - Answers c. selling and admin costs are only
indirect
Prime costs are ________ and conversion costs are ________.
a. materials and labor, labor and overhead
b. labor and overhead, materials and labor - Answers a. materials and labor, labor and overhead
prime costs help set selling price
conversion costs gauge efficiency the production
Direct labor is
,a. a prime cost
b. a conversion cost
c. can be both a prime and a conversion cost - Answers c. can be either a prime or a conversion cost
balance sheet reports
-product costs
-period costs
-both - Answers product costs (inventory)
income statement reports
-product costs
-period costs
-both - Answers both
During March, DM costs were $10k which was 50% of prime cost. If total manufacturing costs during
March were 68k, the manufacturing overhead was
52k
22k
48k
6k - Answers 48k
Prime=DM+DL
68-(10*2)=48
If the selling price per unit and unit variable cost both increase by 10% and fixed costs decrease 5% and
the volume sold does not change, what is the change to the Contribution Margin Ratio?
CMR does not change
CMR will decrease by 10%
CMR will decrease by 5%
CMR will increase by 5% - Answers CMR does not change
, Unit Contribution Margin is defined as
total revenue dollars less total variable expense dollars
total net operating income dollars less total fixed expense dollars
selling price per unit less unit variable cost
selling price per unit less unit fixed cost
total revenue dollars less total fixed expense dollars - Answers selling price per unit less unit variable
cost
Toy company wants to know what its breakeven units are. they are currently pricing its toys at $30/unit
with variable costs at $10/unit. Fixed are 50,000. How many units to breakeven? - Answers 2500 units
(50,000+0)/20
Ballpark sells hotdogs for $6. total revenue one game was 750k. variable costs were 500k, fixed are
100k. determine breakeven in units and in sales - Answers 50k hotdogs, $300k
electronics store at its current sales level of 2k units have a net income of 10k. they sell TVs for 200 and
variable costs are 80% of sales. fixed costs are 70k. how many more units need to be sold to get a net
income of $25k? how much more revenue needs to be generated to get net income of 25k? - Answers
375 units, $75k
var: 80% of price (200*.8=160)
ucm=200-160=40
25k-10k=15k= change in net income
CNI/UCM= 15k/40=375 units
375(200)=75k
motor company makes and sells cars. estimate they will sell 400 cars this year. each car sells for 20k and
variable cost is 45% of price. fixed costs are associated with manufacturing are 2.5M. what is margin of
safety in units? what is margin of safety as a percent? - Answers 172, 43%?
UCM=20k-9k=11k
BE/unit= (fix +0)/UCM
Which of the following statements is false?
a. Creditors would be a user of financial accounting
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required - Answers c.
Financial accounting information emphasizes decisions for the future
Which best describes management accounting
a. it is mainly focused on past results
b. the reports are rules based using GAAP
c. the main users of management accounting information are outside the firm
d. the reports are prepared following the national management accounting standards (NMAS)
e. management accounting is primarily used for decision making - Answers e. management accounting is
primarily used for decision making
Which of the following statements is false?
a. prime costs are always direct costs
b. manufacturing costs can be direct or indirect
c. selling and admin costs are only indirect
d. direct labor is both a prime cost and a conversion cost - Answers c. selling and admin costs are only
indirect
Prime costs are ________ and conversion costs are ________.
a. materials and labor, labor and overhead
b. labor and overhead, materials and labor - Answers a. materials and labor, labor and overhead
prime costs help set selling price
conversion costs gauge efficiency the production
Direct labor is
,a. a prime cost
b. a conversion cost
c. can be both a prime and a conversion cost - Answers c. can be either a prime or a conversion cost
balance sheet reports
-product costs
-period costs
-both - Answers product costs (inventory)
income statement reports
-product costs
-period costs
-both - Answers both
During March, DM costs were $10k which was 50% of prime cost. If total manufacturing costs during
March were 68k, the manufacturing overhead was
52k
22k
48k
6k - Answers 48k
Prime=DM+DL
68-(10*2)=48
If the selling price per unit and unit variable cost both increase by 10% and fixed costs decrease 5% and
the volume sold does not change, what is the change to the Contribution Margin Ratio?
CMR does not change
CMR will decrease by 10%
CMR will decrease by 5%
CMR will increase by 5% - Answers CMR does not change
, Unit Contribution Margin is defined as
total revenue dollars less total variable expense dollars
total net operating income dollars less total fixed expense dollars
selling price per unit less unit variable cost
selling price per unit less unit fixed cost
total revenue dollars less total fixed expense dollars - Answers selling price per unit less unit variable
cost
Toy company wants to know what its breakeven units are. they are currently pricing its toys at $30/unit
with variable costs at $10/unit. Fixed are 50,000. How many units to breakeven? - Answers 2500 units
(50,000+0)/20
Ballpark sells hotdogs for $6. total revenue one game was 750k. variable costs were 500k, fixed are
100k. determine breakeven in units and in sales - Answers 50k hotdogs, $300k
electronics store at its current sales level of 2k units have a net income of 10k. they sell TVs for 200 and
variable costs are 80% of sales. fixed costs are 70k. how many more units need to be sold to get a net
income of $25k? how much more revenue needs to be generated to get net income of 25k? - Answers
375 units, $75k
var: 80% of price (200*.8=160)
ucm=200-160=40
25k-10k=15k= change in net income
CNI/UCM= 15k/40=375 units
375(200)=75k
motor company makes and sells cars. estimate they will sell 400 cars this year. each car sells for 20k and
variable cost is 45% of price. fixed costs are associated with manufacturing are 2.5M. what is margin of
safety in units? what is margin of safety as a percent? - Answers 172, 43%?
UCM=20k-9k=11k
BE/unit= (fix +0)/UCM
