Management Accounting

The potential benefit that may be obtained from following an alternative course of action is called

In a make or by decision, the relevant costs include each of the following except the 

The CVP income statement classifies costs as variable or fixed and computes a contribution margin

Sales mix is the relative percentage in which each product is sold when a company sells more than one product.

Contribution margin per unit of limited resource is obtained by dividing the contribution margin per unit of each product by the number of units of the limited resources required for each product.

companies that have higher fixed costs relative to variable costs have higher operating leverage 

Fixed manufacturing costs are a product cost under absorption costing but are a period cost under variable costing

Equivalent units of production equals units completed and transferred out + units in beginning work in process.

The first step in preparing a production cost report is to compute the equivalent units of production.

For a company selling multiple products, the break-even point in dollars is computed by dividing fixed costs by the 

In order to maximize net income a company should produce and sell the product with the highest

Operating leverage refers to the extent to which a company's net income reacts to a given change in 

Under variable costing, all of the following are considered product costs except 

All of the following are potential advantages of variable costing except that 

The range over which a company is expected to operate is called the relevant range of the activity index.

Variable costs are costs that remain the same per unit at every level of acitivity

If revenue = $80 and variable cost = 40% of revenue, then the contribution margin = $48

Sales mix is the perventage that each product represents of total sales

If the unit contribution margin is $300 and fixed costs are $240,000 then the break-even point would be 800 units

In a CVP income statement, contribution margin is reported in the body of the statement

Units in work in process at the beginning of the period are included in units “started and completed” under the FIFO method. 

In the first stage of acitivty-based costing, overhead is assigned to products using cost drivers.

Before costs are allocated to the cost pools, the cost drivers for each cost pool must be identified. 

Which of the following is a false statement regarding assumptions of CVP analysis?

Mixed costs may be seperated into fixed costs and variable costs by using

If the unit selling price is $500, the unit variable cost is $300, and the total monthly fixed costs are $300,000, then the constribution margin ratio is

If activity level increases 25% and a specific cost increases from $40'000 to $50'000, this cost would be classified as a

If total fixed costs are $900,000 and variable costs as a percentage of unit selling price are 40%, then the break-even point in dollars is 

Even in today's automated environment, direct labor is sometimes the appropriate basis for assigning overhead cost to products

The first step in activity-based costing is to identify and classify the major activities involved in the manufacture of specific products, and allocate manufactrung overhead to the appropriate cost pools

Under ABC, overhead costs are shifted from the high-volume product to the low-volume product.

Activity-based costing does not change the amount of overhead costs, but it does allocate those costs in a more accurate manner

Value-added acitivities increase the worth of a product or service to customers and involve resource usage that customers are willing to pay for

Just-in-time processing strives to eliminate inventories by using a "pull approach" in manufacturing.

Overhead costs are not allocated by means of arbitrary volume-based cost drivers under ABC.

Product-Level activities in ABC are required to support or sustain an entire production process.

The last step in activitiy-based costing is to

Machine hours would be an accurate cost driver for

All of the following are benefits of ABC except it leads to 

The level of ABC activities performed in support of an entire product line are classified as