ACCT 5312 EXAM 2 LATEST 2026 UPDATE 100
QUESTIONS AND DETAILED VERIFIED ANSWERS
FROM ACTUAL EXAMS TEST GRADE A+
1. Which of the following best describes managerial accounting?
A. External reporting focused
B. Tax compliance reporting
C. Internal decision-making support
D. Audited financial statements
Answer: C
Managerial accounting focuses on providing internal information for planning,
control, and decision-making.
2. Cost behavior that remains constant per unit but changes in total is:
A. Fixed cost
B. Variable cost
C. Mixed cost
D. Sunk cost
Answer: B
Variable costs change in total proportionally with activity level but remain
constant per unit.
3. A cost that cannot be changed once incurred is called:
A. Relevant cost
B. Opportunity cost
,C. Sunk cost
D. Differential cost
Answer: C
Sunk costs are past costs that cannot be recovered and should not influence
decisions.
4. Break-even point occurs when:
A. Revenue exceeds costs
B. Profit equals zero
C. Variable costs exceed fixed costs
D. Contribution margin is zero
Answer: B
Break-even is the point where total revenue equals total costs, resulting in zero
profit.
5. Contribution margin is calculated as:
A. Sales − Fixed costs
B. Sales − Variable costs
C. Fixed costs − Variable costs
D. Net income − Sales
Answer: B
Contribution margin is the amount available to cover fixed costs and profit after
variable costs.
6. Which cost is most relevant in decision-making?
A. Sunk cost
B. Future avoidable cost
,C. Historical cost
D. Allocated overhead
Answer: B
Relevant costs are future costs that differ among alternatives.
7. Cost-volume-profit analysis assumes all EXCEPT:
A. Selling price is constant
B. Costs are linear
C. Production equals sales
D. Multiple products exist without changes
Answer: D
CVP assumes a single product or constant sales mix.
8. Margin of safety represents:
A. Actual sales minus break-even sales
B. Fixed costs minus variable costs
C. Profit divided by sales
D. Contribution margin ratio
Answer: A
It measures how much sales can drop before reaching break-even.
9. Operating leverage measures:
A. Sales efficiency
B. Fixed cost proportion in cost structure
C. Tax burden
D. Inventory turnover
, Answer: B
Higher fixed costs increase operating leverage and profit sensitivity.
10. A cost that changes in steps is called:
A. Fixed cost
B. Step cost
C. Variable cost
D. Mixed cost
Answer: B
Step costs remain fixed within ranges and change at intervals.
11. Relevant range refers to:
A. Accounting standards
B. Range where cost behavior assumptions hold
C. Revenue limits
D. Tax regulations
Answer: B
Cost behavior assumptions are valid only within a specific activity range.
12. High-low method is used to:
A. Forecast profit
B. Separate mixed costs
C. Compute depreciation
D. Allocate overhead
Answer: B
It estimates fixed and variable components of mixed costs.
QUESTIONS AND DETAILED VERIFIED ANSWERS
FROM ACTUAL EXAMS TEST GRADE A+
1. Which of the following best describes managerial accounting?
A. External reporting focused
B. Tax compliance reporting
C. Internal decision-making support
D. Audited financial statements
Answer: C
Managerial accounting focuses on providing internal information for planning,
control, and decision-making.
2. Cost behavior that remains constant per unit but changes in total is:
A. Fixed cost
B. Variable cost
C. Mixed cost
D. Sunk cost
Answer: B
Variable costs change in total proportionally with activity level but remain
constant per unit.
3. A cost that cannot be changed once incurred is called:
A. Relevant cost
B. Opportunity cost
,C. Sunk cost
D. Differential cost
Answer: C
Sunk costs are past costs that cannot be recovered and should not influence
decisions.
4. Break-even point occurs when:
A. Revenue exceeds costs
B. Profit equals zero
C. Variable costs exceed fixed costs
D. Contribution margin is zero
Answer: B
Break-even is the point where total revenue equals total costs, resulting in zero
profit.
5. Contribution margin is calculated as:
A. Sales − Fixed costs
B. Sales − Variable costs
C. Fixed costs − Variable costs
D. Net income − Sales
Answer: B
Contribution margin is the amount available to cover fixed costs and profit after
variable costs.
6. Which cost is most relevant in decision-making?
A. Sunk cost
B. Future avoidable cost
,C. Historical cost
D. Allocated overhead
Answer: B
Relevant costs are future costs that differ among alternatives.
7. Cost-volume-profit analysis assumes all EXCEPT:
A. Selling price is constant
B. Costs are linear
C. Production equals sales
D. Multiple products exist without changes
Answer: D
CVP assumes a single product or constant sales mix.
8. Margin of safety represents:
A. Actual sales minus break-even sales
B. Fixed costs minus variable costs
C. Profit divided by sales
D. Contribution margin ratio
Answer: A
It measures how much sales can drop before reaching break-even.
9. Operating leverage measures:
A. Sales efficiency
B. Fixed cost proportion in cost structure
C. Tax burden
D. Inventory turnover
, Answer: B
Higher fixed costs increase operating leverage and profit sensitivity.
10. A cost that changes in steps is called:
A. Fixed cost
B. Step cost
C. Variable cost
D. Mixed cost
Answer: B
Step costs remain fixed within ranges and change at intervals.
11. Relevant range refers to:
A. Accounting standards
B. Range where cost behavior assumptions hold
C. Revenue limits
D. Tax regulations
Answer: B
Cost behavior assumptions are valid only within a specific activity range.
12. High-low method is used to:
A. Forecast profit
B. Separate mixed costs
C. Compute depreciation
D. Allocate overhead
Answer: B
It estimates fixed and variable components of mixed costs.
