Management Accounting Exam Study Guide
Questions And Answers Verified 100% Correct
Sam has a small watch shop selling only one type of watch which is
very popular with students as it looks fantastic.
Variable costs for each watch are $50.
Fixed costs for the shop are $3,000 per month.
Selling price is $80 per watch.
Sam wants to make a $2,700 profit per month. How many watches
does she need to sell to achieve this profit? - ANSWER -190
Bergman Ltd has the following product information available:
Sales price=$12 per unit
Variable costs=$4 per unit
Fixed costs=$15,600
Units sold=10,400
What is the break-even point in units? - ANSWER -1,950
Which of the following statements is true when making decisions
using cost-volume-profit (CVP) analysis?
Select one:
a. As long as the contribution margin is a positive number, net
income will be positive
b. As long as variable costs are more than fixed costs, net income
will be negative
, c. As long as the contribution margin is greater than fixed costs,
net income will be positive
d. As long as the sales price per unit is greater than fixed costs per
unit, net income will be positive - ANSWER -c. As long as the
contribution margin is greater than fixed costs, net income will be
positive
The Kelsey Company sells a product for $10. Budgeted sales for the
first quarter of next year are as follows:
Budgeted Sales
January=$400,000
February=$600,000
March=$700,000
The company wants to maintain an inventory of finished units equal
to 30% of the following month's sales and 12,000 units are on hand at
the beginning of the year.
Each unit requires 2 kilograms of raw material costing $1 per kg. The
company maintains a raw materials inventory equal to 10% of the
following month's production needs.
Budgeted production in units for February would be:
Select one:
a. 60,000
b. 63,000
c. 81,000
d. 99,000 - ANSWER -b. 63,000
Use the following information to ANSWER the question:
Selling price per unit=$200
Questions And Answers Verified 100% Correct
Sam has a small watch shop selling only one type of watch which is
very popular with students as it looks fantastic.
Variable costs for each watch are $50.
Fixed costs for the shop are $3,000 per month.
Selling price is $80 per watch.
Sam wants to make a $2,700 profit per month. How many watches
does she need to sell to achieve this profit? - ANSWER -190
Bergman Ltd has the following product information available:
Sales price=$12 per unit
Variable costs=$4 per unit
Fixed costs=$15,600
Units sold=10,400
What is the break-even point in units? - ANSWER -1,950
Which of the following statements is true when making decisions
using cost-volume-profit (CVP) analysis?
Select one:
a. As long as the contribution margin is a positive number, net
income will be positive
b. As long as variable costs are more than fixed costs, net income
will be negative
, c. As long as the contribution margin is greater than fixed costs,
net income will be positive
d. As long as the sales price per unit is greater than fixed costs per
unit, net income will be positive - ANSWER -c. As long as the
contribution margin is greater than fixed costs, net income will be
positive
The Kelsey Company sells a product for $10. Budgeted sales for the
first quarter of next year are as follows:
Budgeted Sales
January=$400,000
February=$600,000
March=$700,000
The company wants to maintain an inventory of finished units equal
to 30% of the following month's sales and 12,000 units are on hand at
the beginning of the year.
Each unit requires 2 kilograms of raw material costing $1 per kg. The
company maintains a raw materials inventory equal to 10% of the
following month's production needs.
Budgeted production in units for February would be:
Select one:
a. 60,000
b. 63,000
c. 81,000
d. 99,000 - ANSWER -b. 63,000
Use the following information to ANSWER the question:
Selling price per unit=$200
