____ 1.
Managerial accounting
information is “restricted” by which of the following authorities/limitations?

A) Financial Accounting Standards Board (FASB)
regulation

B) Generally Accepted Accounting Principles (GAAP)
regulation

C) Value Added Principle

D) International Accounting Standards Board
(IASB) regulation

____
2. Which of the following is a feature of financial
(NOT managerial) accounting:

A) Information includes economic and
non-financial data as well as financial data.

B) Information is historically based and
reported annually.

C) Information is provided primarily to insiders
such as managers.

D) Information is reported continuously with a
present or future orientation.

____ 3. How can accountants justify
calculating cost per unit as an average?

A) Determining the exact cost of a product is
virtually impossible.

B) Some manufacturing-related costs cannot be cost-effectively
traced to specific units of product.

C) Even when producing multiple units of the
same product, normal variations occur in the amount of materials and labor
used.

D) All of the above are justifications for
computing average unit costs.

____ 4. Select the incorrect statement regarding costs and
expenses.

A) Some costs are initially recorded as expenses
while others are initially recorded as assets.

B) Expenses are incurred when manufactured goods
aresold.

C) Manufacturing-related production costs are
initially recorded as expenses.

D) Non-manufacturing costs should be expensed in
the period in which they are incurred.

____5. Falcon
Company’s accountant mistakenly classified some of the company’s periodcosts
as product costs. After
review of page 18/19 of the text and the page 54 homework assign, which of the

following
indicateshow thiserror affects the company’sfinancial statements,
assuming the number of units produced exceededthenumber
of units soldduring the period?
A) Reported
Cost of Goods sold is too high.
B) Reported
Gross Margin (i.e. Gross Profit) is too low.

C) Reported overall expense (total of product and
period costs)on the income statement is too low.
D) All
of the above would occur based upon this error.

____6. Bennett
&Hyre, Inc.makes donuts for discriminating students. Variable cost
of production is

$3.50 per dozen and fixed production costs are $46,000 per
year. The company plans to doubledonut production, but this
volume increase will still be within the company’s current “relevantrange” of production. How
will this change impact the cost of producing a single donut?

A)
The unit cost of producing a donut will stay the same within the relevant
range.

B)
The unit cost of producing a donut will go up within the relevant range.

C)
The unit cost of producing a donut will go down within the relevant
range.

D)
The unit cost of producing a donut will go down and then up quickly in the
relevant range.

Use the fact pattern below for Chp 1
related questions 7through 9:

____ 7. During its first
year of operations, Critchfield & Furukawa, Inc. paid $40,000 for direct
material and $10,000 in wages for production workers. Lease payments and
utilities on the production facilities amounted to $9,000. General, selling,
and administrative expenses (i.e. S,G&A costs) were $21,000. The company
produced 5,000 units and sold 4,000 units at a price of $30/unit. Based upon the facts presented, and after
reviewing Chapter 1 regarding product vs. period costs, what is the average
production cost that would be used to value company inventory on a per unit
basis?

A) $9.80 B)
$10.00 C) $11.80 D) $13.30 E)
$16.00

____ 8. The Ending Inventory amount, as
reported on the Balance Sheet, would be:

A) Higher than the reported Cost of Goods
Sold.

B) $4,800

C) $7,840

D) $9,120

E) None of the above.

____ 9. Total “Cost of Goods Sold” expense, to
be shown on the income statement, would be:

A) $ 39,200
B) $ 40,000 C) $ 45,600
D) $ 53,200 E) $ 64,000

10. Create a “CM template” (as used in class) to
confirm the missing elements & relationships below.

Selling Price/Unit	VC per Unit	CM%	Total FC	Net Profit	Units Sold
$40/Unit	??	25%	$75,000	$400,000	??
		Unit Basis	Percentages	Total Dollars
	SP
	VC
	CM
	FC
	NI

10a. The firm’s “cost
structure”for the above question is primarily (circle one): VARIABLE
FIXED

11.
Create a “CM template” (as used in class) to confirm the missing elements &
relationships below.

Selling Price/Unit	VC %	Total CM in $$	Total FC	Net Loss	Units Sold
??	30%	$210,000	??	$(30,000)	3,000
		Unit Basis	Percentages	Total Dollars
	SP
	VC
	CM
	FC
	Net LOSS

11a. The firm’s “cost
structure” for the above question is primarily (circle one): VARIABLE FIXED

Use the
following information from Thien & Baxter, Inc. to answer questions 12 – 14:

Selling Price	$25/Case
Expected Sales Level	40,000 Cases
Total Fixed Costs	$60,000
Variable Costs	$23/Case

12. What is the expected
profit for the period? Create an Income
Stmt using the full CM format (ignore taxes).

	Unit Basis	Percentages	Total Dollars
SP
VC
CM
FC
NI

13. Based on the above Income Statement prepared,
what is the current “Operating Leverage” andwhat dollar

amount and
percentageincrease in profits would be expected with say… a 10% increase in unit sales?

Show your work and prepare a new CM
template below to confirm (prove) your answer.

____ 14.
Considering the formula for Operating Leverage, if no fixed costs
had existed in the above fact

pattern, operating leverage would have
been (i.e. would always be):

a. Negative b. Zero c. 1.0 d. > 1.0

————————————————————————————————————————————–

____ 15. If the level of activity (X) increases,
within the relevant range of activity (i.e. class pizza example):

a.
Variable cost per unit will increase

b.Total
fixed costs will increase

c.Total
costs will actually decrease

d.Fixed cost per unit will increase

e. Total
variable costs will increase

16. Select the term from the numerical list provided that
best matches each of the following descriptions.
Note: If six or more (of the
ten) matches is correct, 1pt (full credit) is earned

List #	Description	List of terms
7	A. Costs composed of both fixed and variable components.	1. Activity level
	B. A cost that remains constant in total when total volume changes.	2. Contribution Margin
	C. The factor that causes (or drives) changes in costs.	3. Cost behavior
	D. A cost that changes in total in direct proportion to changes in volume.	4. Cost structure
	E. The way a cost reacts (changes) relative to changes in a measure of activity.	5. Fixed cost
	F. A condition in which a percentage change in revenue will produce a larger percentage change in net income or loss.	6. High-low method
	G. A method of estimating the fixed and variable components of a mixed cost where data are plotted on a graph and a line is visually fit to the data.	7. Mixed costs
	H. The difference between a company’s sales revenue and its variable costs.	8. Operating leverage
	I. A company’s cost mix or relative proportion of variable and fixed costs to total costs.	9. Scattergraph method
	J. A method of estimating the fixed and variable components of a mixed cost using two data observations.	10. Variable cost

Use the
following information to answer question 17 through 19:

____17. Kyle & Potter Outdoor, Inc. produces bookbags
for fashion-conscious students. In 2015,
its highest and

lowest production levels
occurred in June and October, respectively.
In June, it produced 5,000 bookbags

at a total cost of $105,000. In October, it produced 3,500 bookbags at a
total cost of $87,000. Using the

high/lowmethod of estimating
costs, the average variable cost of producing a bookbag would be:

a. $12.00

b. $27.50

c. $30.38

d. $31.25

e. None
of the above. The correct answer is: ____________

18. Based upon
the high-low analysis above, and after determining the expected fixed cost
associated with this fact pattern, the cost formula (expressed as Y = A + bX ) to be used would be (show all
work below):

Total Cost
(Y) =

19. If the
company planned production of 4,200 units for next month, total expected cost would be:

Total Cost
(Y) =

Question #20 Facts: Falcon Productions manufacturers a
unique study guide for discriminating students.
The company normally produces and sells between 4,000 and 8,000 guides
per year. The following cost data is
provided:

Number of Units	4,000	5,000	6,000	7,000
Total costs incurred:
Fixed	$48,000
Variable	48,000
Total costs	$96,000
Cost per unit:
Fixed	$ 12.00
Variable	12.00
Total cost per unit	$24.00

_____ 20.
Assuming consistent cost behavior, what would be the expected “Total
Cost Per Unit” if 7,000 units
are produced and sold? Be sure to
complete all elements of the preceding table as you determine your answer.

a. $48.00 b. $24.00 c. $21.93 d. $20.72 e. $18.86

Use the
following information for questions 21 – 23:

Brousseau & Graham, Inc.
producesacademicChess sets for office-hours competition. The company expects the following sales and
expenses for the year for its top of the line “ExcellentStudent” (ES) brand of
gold-plated sets.

Sales
(400 sets) $ 200,000 Expected Income Tax Rate: 20%

Variable
expenses $ 80,000

Fixed
expenses $ 60,000

21.Set up a CM template, use the
equation method, and determine how many units
(sets) must be sold to break-even.

22.What sales dollar amount of Excellent Student series sets must be
sold to earn a pre-tax profit of $30,000?

23.What sales dollar amount of ExcellentStudent series sets must be
sold to earn an after-tax profit of $30,000?