ACYMAG Unit 1 Review

If a distinction is made between cost accounting and managerial accounting, managerial accounting is more oriented toward

• valuation of inventory

• analysis of variances including spoilage

• financial reporting to third parties

• the planning and controlling aspects of the management process

The equations required for applying the least squares method in the computation of fixed and variable production costs could be expressed as

The high-low method of cost estimation may give unsatisfactory results if

• data points all fall on a line

• volume of activity is heavy

• the points are not representative

• volume of activity is light

A management's preference for a very low degree of operating leverage might indicate that

• an increase in sales volume is expected

• a decrease in sales volume is expected

• the firm is very unprofitable

• the firm has a very high fixed cost

When using regression analysis to predict mixed cost behavior, which of the following would be the dependent variable?

• highest level of activity

• lowest level of activity

• mixed cost at a given level of production

• the variable cost per unit

The manager of Naught Food Company reviewed the following data:

Fruits Meat Canned Products

CM Ratio 40% 50% 40%

Sales Mix (Php) 20% 30% 50%

Fixed cost is P 1,200,000 per month

The breakeven sales for each month is

• 1,677,000

• 3,000,000

• 4,500,000

• 6,000,000

Which of the following would not affect the breakeven point?

• Number of units sold

• variable cost per unit

• total fixed costs

• sales price per unit

Assuming a company has net income, which of the following statements is TRUE regarding the contribution margin per unit?

• It will decrease as the number of units sold increases.

• It will decrease as the number of units sold decreases

• It indicates the amount that net income will increase with the sale of each additional unit

• It indicates the amount that variable costs will decrease with the sale if each additional unit.

Introducing income taxes into CVP analysis

• raises break-even point

• lowers the break-even point

• increases unit sales needed to earn a particular target profit

• decreases the contribution margin percentage

The company sells widgets and they break-even at an annual sales volume of 75,000 units.

Actual annual sales volume was 100,000 units, and the company reports a profit of Php 200,000. The annual fixed cost for the company is:

• 800,000

• 600,000

• 200,000

• 150,000