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TRUE Trafford FALSE 1. The relevant range is useful for analyzing cost behavior for management decision-making purposes. 2. Variable costs are costs that remain constant in total dollar amount as the level of activity changes. 3. Unit variable cost does not change as the number of units of activity changes. 4. A rental cost of $20,000 plus $.70 per machine hour of use is an example of a mixed cost. 5. The point in operations at which revenues and expired costs are exactly equal is called the break-even point. 6. A low operating leverage is normal for highly automated industries. 7. In determining cost of goods sold, two alternate costing concepts can be used: direct costing and variable costing. 8. Fixed factory overhead costs are included as part of the cost of products manufactured under the absorption costing concept. 9. In the absorption costing income statement, deduction of the cost of goods sold from sales yields gross profit. 10. In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin. 11. Under absorption costing, increases or decreases in income from operations due to changes in inventory levels could be misinterpreted to be the result of operating efficiencies or inefficiencies. 12. In the short run, the selling price of a product should normally not be less than the variable costs and expenses of making and selling it. 13. If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the lowest contribution margin. 14. If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the highest contribution margin. 15. In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer. 16. In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the unit price or unit cost factor. 17. In contribution margin analysis, the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost. 18. In contribution margin analysis, the unit price or unit cost factor is computed as the difference between actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost. 19. The budget procedure that requires all levels of management to start from zero in estimating sales, production, and other operating data is called zero-based budgeting. 20. The budget procedure that requires all levels of management to start from zero in estimating sales, production, and other operating data is called continuous budgeting. 21. After the sales budget is prepared, the capital expenditures budget is normally prepared next. 22. The sales budget is the starting point for preparation of the direct labor cost budget. 23. Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget. 24. The cash budget summarizes future plans for acquisition of fixed assets. 25. The task of preparing a budget should be the sole task of the most important department in an organization.
1) T 2) F 3) T 4) T 5) If expired costs means costs that are used like VC and FC, then True. 6) F - lots of fixed costs like factories. 7) Not sure what this question means. 8) T 9) T 10) F 11) ----- 12) T 13) F 14) T 15) Taking a chance on this one and saying, net sales because they might buy and immediately return. So false 16) Haven't heard of this 17) T 18) 19) Haven't heard of this term 20) Haven't heard of this term 21) F 22) F 23) F - Overhead budget 24) F - More for use of looking at where cash is going, balances, and your working capital cycle 25) Uhh not sure about this. It's subjective. But I'm guessing since budgets are a HUGE part of management accounting then, probably you would. So True. If you need help with management accounting, I make a tonne of videos to teach students quickly all facets of managerial/management accounting. I also take questions from subscibers. Check it out if your interested! :)
1.FALSE 2.TRUE 3.TRUE 4.FALSE 5.FALSE 6.TRUE 7.FOB? 8.FOB? 9.TRUE 10.FALSE HOW DID I GET ON?
All true and you'll probably get 50%.