Lan Nguyen
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Review Test Submission: Quiz1
Review Test Submission: Quiz1
User
Lan Nguyen
Course
FA16 15W ACCT 3333.05 Cost Accounting
Test
Quiz1
Started
9/5/16 6:24 PM
Submitted 9/5/16 7:40 PM
Due Date
9/6/16 11:59 PM
Status
Completed
Attempt
Score
150 out of 150 points
Time
Elapsed
1 hour, 16 minutes out of 2 hours
Instructions
This is an open book and open notes quiz. Duration: 2 Hours for each
attempt. Attempts allowed: 2.
Each attempt must be completed in one sitting, i.e., once you start an
attempt you can not log out and come back to finish the attempt at a later
time. After the first attempt, you will see your score, correct answers, and
some explanations. Please try to understand the correct answers and note
them. In the second attempt, I expect you to answer all questions
correctly, because you’ve already seen and understood the correct
answers.
Your final score on this quiz will be an average of your 2 attempts. If you
score 100% on the first attempt, you don’t need to take the second
attempt. Your completion time is measured from when you click Begin
Assessment to when you click Finish. Select your answer, then click
"Save", and then select next question.
Results
Displayed
Submitted Answers, Correct Answers, Feedback
Question 1
10 out of 10 points
When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 16,000
units are produced, fixed costs will ________.
Selected Answer:
Increase to $20 per unit
Correct Answer:
Increase to $20 per unit
Question 2
10 out of 10 points
A company reported revenues of $375,000, cost of goods sold of $118,000, selling
expenses of $11,000, and total operating costs of $70,000. Gross margin for the year is
________.
Selected Answer:
$257,000
Correct Answer:
$257,000
Question 3
10 out of 10 points
Tally Corp. sells softwares during the recruiting seasons. During the current year,
11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of
variable costs, and $48,000 of fixed costs.
If sales increase by $60,000, operating income will increase by ________.
Selected Answer:
$45,000
Correct Answer:
$45,000
Response
Feedback:
Price = $440,000 / 11,000 = $40.00
Sales in softwares = $60,000 / $40.00 = 1,500 softwares
Contribution Margin = $40 ­ $10 = $30 per software
Operating income increase = 1,500 softwares × $30.00 per =
$45,000
Question 4
10 out of 10 points
The Marietta Company has fixed costs of $60,000 and variable costs are 75% of
the selling price. To realize profits of $10,000 from sales of 50,000 units, the selling
price per unit ________.
Selected Answer:
must be $5.60
Correct Answer:
must be $5.60
Response Feedback:
Question 5
Breakeven sales = ($60,000 + $10,000) / 0.25 = $280,000
Selling price = $280,000 / 50,000 units = $5.60 per unit
10 out of 10 points
Tony Manufacturing produces a single product that sells for $80. Variable costs
per unit equal $30. The company expects total fixed costs to be $78,000 for the
next month at the projected sales level of 2,500 units. In an attempt to improve
next month at the projected sales level of 2,500 units. In an attempt to improve
performance, management is considering a number of alternative actions. Each
situation is to be evaluated separately. Suppose that management believes that a
10% reduction in the selling price will result in a 10% increase in sales. If this
proposed reduction in selling price is implemented ________.
Selected Answer:
operating income will decrease by $9,500
Correct Answer:
operating income will decrease by $9,500
Reduction in revenues = $80 × 10% = $8 × 2,500 units = ($20,000)
Increase in contribution = 2,500 units × 10% = 250 units × ($72 −
$30) = 10,500
Change in operating income ($9,500)
Response
Feedback:
Question 6
10 out of 10 points
Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of
variable costs, and $18,000 of fixed costs. The number of units that must be sold
to achieve $40,000 of operating income is ________.
Selected Answer:
617 units
Correct Answer:
617 units
Response
Feedback:
($75,000 − $28,000) / 500 = $94
The number of units that must be sold to achieve $40,000 of
operating income = ($18,000 + $40,000) / $94 = 617 units
Question 7
10 out of 10 points
Winnz sells 8,000 units resulting in $100,000 of sales revenue, $35,000 of variable
costs, and $45,000 of fixed costs. To achieve $150,000 in operating income, sales
must total ________.
Selected Answer:
$300,000
Correct Answer:
$300,000
Response Feedback:
Question 8
($150,000 + $45,000) / 65% = $300,000 in sales
10 out of 10 points
Globus Autos sells a single product. 8,000 units were sold resulting in $80,000 of
sales revenue, $20,000 of variable costs, and $10,000 of fixed costs. If variable
costs decrease by $1 per unit, the new margin of safety is ________.
Selected Answer:
$68,235
$68,235
Correct Answer:
Response
Feedback:
Variable cost per unit = $20,000 / 8,000 = $2.50
Contribution margin percentage = [$10 − ($2.50 − $1.00)] / $10 =
85%
New breakeven point = [$10 − ($2.50 − $1.00)] / $10 = 85%;
$10,000 / 0.85 = $11,765
Old breakeven point = $10 ­ 2.50 = $7.50 / $10 = 75%; $10,000 /
0.75 = $13,333
Margin of safety = $80,000 ­ $11,765 = $68,235
Question 9
10 out of 10 points
Maize Plastics manufactures and sells 50 bottles per day. Fixed costs are $30,000 and the
variable costs for manufacturing 50 bottles are $10,000. Each bottle is sold for $1,000.
How would the daily profit be affected if the daily volume of sales drop by 10%?
Selected Answer:
Profits are reduced by $4,000
Correct Answer:
Profits are reduced by $4,000
Question 10
10 out of 10 points
How many units would have to be sold to yield a target operating income of
$23,000, assuming variable costs are $25 per unit, total fixed costs are $2,000, and
the unit selling price is $30?
Selected Answer:
5,000 units
Correct Answer:
5,000 units
Response Feedback:
Desired sales = ($2,000 + $23,000) / ($30 − $25) = 5,000 units
Question 11
10 out of 10 points
Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of
variable costs, and $18,000 of fixed costs. Breakeven point in units is ________
(approximately).
Selected Answer:
192 units
Correct Answer:
192 units
Response
Feedback:
Contribution margin per unit = ($75,000 − $28,000) / 500 = $94
Breakeven point = $18,000 / $94 = 191.49 units. Hence breakeven is
approximately 192 units.
Question 12
10 out of 10 points
If a company has a degree of operating leverage of 3.0 and sales increase by 25%,
then ________.
Selected Answer:
profit will increase by 75%
Correct Answer:
profit will increase by 75%
Response Feedback:
3.0 × 25% = 75% increase
Question 13
10 out of 10 points
When 20,000 units are produced, variable costs are $8 per unit. Therefore, when 10,000
units are produced ________.
Selected Answer:
Variable costs will remain at $8 per unit
Correct Answer:
Variable costs will remain at $8 per unit
Question 14
10 out of 10 points
The following information pertains to the Emerald Corp:
Beginning work­in­process inventory
$75,000
Ending work­in­process inventory
$85,000
Beginning finished goods inventory
$175,000
Ending finished goods inventory
$200,000
Cost of goods manufactured
$1,200,000
What is cost of goods sold?
Selected Answer:
$1,175,000
Correct Answer:
$1,175,000
Question 15
10 out of 10 points
Tally Corp. sells softwares during the recruiting seasons. During the current year,
11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of
variable costs, and $48,000 of fixed costs.
Contribution margin per software is ________.
Selected Answer:
$30.00
Correct Answer:
$30.00
Response Feedback:
($440,000 − $110,000) / 11,000 = $30 per software
Monday, September 19, 2016 10:16:14 PM CDT
← OK