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2.8   Questions 1) Company TTT has the following information available: Total fixed costs$84,000 Targeted after-tax net income$18,000 Contribution margin per unit$6.20 Tax rate40% How many units must be sold to achieve the targeted after-tax net income? A) 14,223 B) 17,853 C) 18,387 D) 21,504 2) The Forever Memories Company has the following information available: Targeted after-tax net income$67,500 Total fixed costs$370,000 Contribution margin per unit$2 Tax rate40% How many units should be sold to achieve the targeted after-tax net income? A) 160,833 B) 167,250 C) 218,750 D) 241,250 3) The SLOW Company has the following information available: Total fixed costs$350,000 […]

11) Which of the following statements about determining the breakeven point is FALSE? A) Operating income is equal to zero. B) Contribution margin – fixed costs is equal to zero. C) Revenues equal fixed costs plus variable costs. D) Breakeven revenues equal fixed costs divided by the variable cost per unit. 12) What is the breakeven point in units, assuming a product's selling price is $100, fixed costs are $8,000, unit variable costs are $20, and operating income is $3,200? A) 100 units B) 300 units C) 400 units D) 500 units 13) If unit outputs exceed the breakeven point: […]

11) Manufacturing-sector companies report: A) only merchandise inventory B) only finished goods inventory C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts D) no inventory accounts 12) For a manufacturing company, direct material costs may be included in: A) direct materials inventory only B) merchandise inventory only C) both work-in-process inventory and finished goods inventory D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts 13) For a manufacturing company, direct labor costs may be included in: A) direct materials inventory only B) merchandise inventory only C) both work-in-process inventory and finished goods inventory D) direct materials […]

5) Product costs used for pricing and product-mix decisions generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) distribution costs only 6) Product costs used for government contracts generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) distribution costs only 7) Product costs used for external reporting generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) All of these answers are correct. 8) Inventoriable […]

11) Managers apply two criteria to obtain accurate and useful cost functions.  These criteria are ________. A) plausibility and believability B) plausibility and reliability C) reliability and validity D) believability and plausibility 12) In relation to a cost function, the term reliability means ________. A) whether the costs and activities can be easily observed B) whether the cost function conforms to a given mathematical model C) how well the cost function predicts future costs D) how well the cost function explains past cost behavior 13) A cost function is an algebraic equation used to describe the relationship between a cost […]