ACCT Exam Question

1. Quick ratio is the sum of account receivables, cash over current liabilites

2. For a manufacturing company has total monthly fixed costs $100,000, variable costs per unit $10, selling price per unit $15., income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, break-even point in units is:$20,000

3. Contribution margin is the same as gross margin for generally accepted accounting principles GAAP. This is not correct

4. The contribution margin of a company during a specific month is total sales less total variable costs

5. For a manufacturing company has total monthly fixed costs of $100,000, variable costs per unit $10, selling price per unit $15., income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, if sales in units (quantities) increase, variable cost per unit remain the same **6% Giving the following data for XY Company

Year                                                                2008     2009

Total sales                                                  $145,000 $121,400

Cost of goods sold                                     $880,000  $738,400

Selling & administrative expenses             $92,500   $80,700

Assume high low method is adequate in this case, the variable costs of cost of goods sold per unit is 60%

7. Current ratio is current assets divided by current liabilities.
8. For a manufacturing company has total monthly fixed costs of $100,000, variable costs per unit $10, income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, if sales in units (quantities) increase, total variable costs in dollars will increase by amt of variable cost Giving the following data for XY Company +

Year                                                                2008     2009

Total sales                                                  $145,000 $121,400

Cost of goods sold                                     $880,000  $738,400

Selling & administrative expenses             $92,500   $80,700

Assume high low method is adequate in this case, the total fixed costs of selling and administrative expenses is $20,000

10. For ABC Company, you have given the following costs for the last year. Fixed costs = $40,000 Variable costs = 60% of total costs, find total costs. $100,000
11. For a manufacturing company has total monthly fixed costs of $100,000, variable costs per unit $10, selling price per unit $15., income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, the quantities need to reach net income is $12,500
12. You are to decide between product A and B. The following data pertains to these products: Selling price $12   $10  ****PRODUCT A
13. For a manufacturing company has total monthly fixed costs of $100,000, variable costs per unit $10, selling price per unit $15., income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, the total sales needed to reach net income is $337,500
14. For ABC Company, you are given: Last year net income = $80,000, income tax rate was 20%, find income before tax.. $100,000
15. Measurements of non-avoidable fixed costs are related to a non-discretionary issues
16. The gross margin of a company during a specific month is total sales less total cost of goods
17. For a manufacturing company has total monthly fixed costs of $100,000, variable costs per unit $10, selling price per unit $15., income tax rate of 20%, targeted net income of $10,000. Assume all other variables do not affect the cost volume profit relationship, if sales in units (quantities) increase, total costs, in dollars remains constant
18. The following data pertains to Kandy Company

Monthly fixed cost (FC)                 $200,000

Selling price(SP/u)                           $12

Variable cost per unit(VC/u)            $4

Income tax rate (t)                             20%

Find contribution margin percentage  33.33%

19. The following data pertains to Kandy Company

Monthly fixed cost (FC)                 $200,000

Selling price(SP/u)                           $12

Variable cost per unit(VC/u)            $4

Income tax rate (t)                             20%

Find contribution margin per unit  $8

20. For a manufacturing company has a total monthly costs of $100,000, variable costs per unit $10, selling price per unit of $15, income tax rate of 20%, targeted net income of $10,000.

Assume all other variables do not affect the cost volume profit relationship, if sales in units

(quantities) increase, total fixed cost in dollars: remains constant

21. For a manufacturing company has a total monthly costs of $100,000, variable costs per unit $10, selling price per unit of $15, income tax rate of 20%, targeted net income of $10,000.

Assume all other variables do not affect the cost volume profit relationship, if sales in units

(quantities) increase, fixed costs per unit: decrease

22. The following data pertains to Kandy Company

Monthly fixed cost (FC)                 $200,000

Selling price(SP/u)                           $12

Variable cost per unit(VC/u)            $4

Income tax rate (t)                             20%

Find contribution break even point 25,000

23. Giving the following data for XY Company +

Year                                                                2008     2009

Total sales                                                  $145,000 $121,400

Cost of goods sold                                     $880,000  $738,400

Selling & administrative expenses             $92,500   $80,700

Assume high low method is adequate in this case, the variable costs of selling and administrative expenses is 2.5%

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