Variable Cost and Contribution Margin
Name: __________________________ Date: _____________
1. | Which of the following is not another name for the term manufacturing overhead? | A) | Factory overhead | B) | Pervasive costs | C) | Burden | D) | Indirect manufacturing costs |
2. | Which one of the following is an example of a period cost? | A) | A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer. | B) | Workers' compensation insurance on factory workers' wages allocated to the factory. | C) | A box cost associated with computers. | D) | A manager's salary for work that is done in the corporate head office. |
3. | Given the following information: Raw materials inventory, January 1 | $ 30,000 | Raw materials inventory, December 31 | 60,000 | Work in process, January 1 | 27,000 | Work in process, December 31 | 18,000 | Finished goods, January 1 | 60,000 | Finished goods, December 31 | 48,000 | Raw materials purchases | 1,500,000 | Direct labor | 690,000 | Factory utilities | 225,000 | Indirect labor | 75,000 | Factory depreciation | 600,000 | Selling and administrative expenses | 630,000 | Direct materials used is | A) | $1,590,000. | B) | $1,530,000. | C) | $1,500,000. | D) | $1,470,000. |
4. | If the cost of goods manufactured is less than the cost of goods sold, which of the following is correct? | A) | Finished Goods Inventory has increased. | B) | Work in Process Inventory has increased. | C) | Finished Goods Inventory has decreased. | D) | Work in Process Inventory has decreased. |
5. | Sales are $500,000 and variable costs are $350,000. What is the contribution margin ratio? | A) | 43%. | B) | 30%. | C) | 70%. | D) | Cannot be determined because amounts are not expressed per unit. |
6. | Barcelona Bagpipes produces two models: Model 24 has sales of 500 units with a contribution margin of $40 each; Model 26 has sales of 350 units with a contribution margin
1. | Which of the following is not another name for the term manufacturing overhead? | A) | Factory overhead | B) | Pervasive costs | C) | Burden | D) | Indirect manufacturing costs |
2. | Which one of the following is an example of a period cost? | A) | A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer. | B) | Workers' compensation insurance on factory workers' wages allocated to the factory. | C) | A box cost associated with computers. | D) | A manager's salary for work that is done in the corporate head office. |
3. | Given the following information: Raw materials inventory, January 1 | $ 30,000 | Raw materials inventory, December 31 | 60,000 | Work in process, January 1 | 27,000 | Work in process, December 31 | 18,000 | Finished goods, January 1 | 60,000 | Finished goods, December 31 | 48,000 | Raw materials purchases | 1,500,000 | Direct labor | 690,000 | Factory utilities | 225,000 | Indirect labor | 75,000 | Factory depreciation | 600,000 | Selling and administrative expenses | 630,000 | Direct materials used is | A) | $1,590,000. | B) | $1,530,000. | C) | $1,500,000. | D) | $1,470,000. |
4. | If the cost of goods manufactured is less than the cost of goods sold, which of the following is correct? | A) | Finished Goods Inventory has increased. | B) | Work in Process Inventory has increased. | C) | Finished Goods Inventory has decreased. | D) | Work in Process Inventory has decreased. |
5. | Sales are $500,000 and variable costs are $350,000. What is the contribution margin ratio? | A) | 43%. | B) | 30%. | C) | 70%. | D) | Cannot be determined because amounts are not expressed per unit. |
6. | Barcelona Bagpipes produces two models: Model 24 has sales of 500 units with a contribution margin of $40 each; Model 26 has sales of 350 units with a contribution margin