Scribd
Upload
906 views2 pages

Quiz 1 StratCost Answer Key

1. The document provides a strategic cost and management quiz with true/false questions and problems involving calculation of costs, break-even analysis, contribution margin, and operating leverage. 2. Questions involve concepts like direct costs, fixed costs, variable costs, gross income, contribution margin, operating leverage, and break-even point. 3. Calculations are required to determine costs per unit, break-even units, income at different sales levels, and sales levels required to achieve certain income targets.

Uploaded by

Kaith Eribal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
906 views2 pages

Quiz 1 StratCost Answer Key

1. The document provides a strategic cost and management quiz with true/false questions and problems involving calculation of costs, break-even analysis, contribution margin, and operating leverage. 2. Questions involve concepts like direct costs, fixed costs, variable costs, gross income, contribution margin, operating leverage, and break-even point. 3. Calculations are required to determine costs per unit, break-even units, income at different sales levels, and sales levels required to achieve certain income targets.

Uploaded by

Kaith Eribal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

STRATEGIC COST AND MANAGEMENT

QUIZ 1
TRUE OR FALSE 14. Period costs would include depreciation from
factory as long as it is a fixed cost. FALSE
1. Cost management information is irrelevant to not-
for-profit entities since their main objective does not 15. In the equation Y=a+bX, ‘a’ refers to the fixed
include earning revenues. FALSE production. FALSE
2. Strategic cost management information involves 16. Total fixed costs fluctuate as the total production
development of cost management information to increases. FALSE
facilitate cost accounting. FALSE
17. Total variable costs increase even if total
3. Synergy means the development and use of cost production remains constant. FALSE
management information. FALSE
18. In the equation Y=a+bX, having zero production
4. Sufficient time is employed in strategy and does would mean zero costs. FALSE
not require sudden changes in response to customer
demand changes. FALSE 19. Factory overhead costs can be a combination of
variable and fixed costs. TRUE
5. Cost management refers to the practice in which
20. Direct labor costs are always variable. TRUE
the accountant develops and uses the cost
management information- this means that for this PROBLEMS
aspect, accountant shall only use financial
information. FALSE From 21-30. ABC Company produces a product
called A001. ABC plans to sell the product at P50
6. Planning involves identifying one solution and per unit. The following initial data was presented by
focusing the course of action based on that solution. ABC regarding the price and costs of the product:
FALSE
Units Amount in
7. Management accountants focus on behavioral Pesos
considerations and not on technical considerations Production 1,200
since GAAP is not required to be adhered with. Projected sales 1,000
FALSE
DM/unit 14.75
8. Management accounting involves the application DL/unit 8.50
of appropriate techniques and concepts to economic FOH
data so as to assist management in establishing Variable/unit 4.25
plans for reasonable economic objectives. TRUE Fixed cost 60,000

9. Scorekeeping enables the internal parties to


evaluate the supplier/vendor performance or As a management accountant
position. TRUE knowledgeable with the cost concept, you were
asked to answer the following:
10. Reportorial and compliance to Financial
Accounting and Standards Board is one use of Cost 21-22. By how much would you recommend the
Management. FALSE sales price be increased/ decreased to attain a
gross income of P10,000? INCREASE BY P37.50
11. Total direct labor cost is not affected by the OR P37,500
number of produced goods since it is based on
measure of time. FALSE 23-24. How much is the total direct costs per unit?
P23.25
12. Finished goods inventory do not have direct and
indirect cost components since it is found on the 25-26. How much is the conversion cost per unit?
balance sheet. FALSE P62.75

13. An increase in the direct material will not affect 27-28. How much is the prime cost per unit?
the gross income. FALSE P23.25
29-30. How much is the total indirect cost per unit? In order to achieve a post-tax income equal of
P54.25 P146,250, how many units must be sold?
(Applicable Tax Rate is 35%) 26,000 units
31-32. The Rocky Company reports the following
data. 43-44. At breakeven point, fixed cost is P67,500
while variable cost is P22,500. If breakeven point in
Sales P 700,000
units is 45,000 units, how much is the net income
Variable costs 300,000 for the sale of 48,000 units? P4,500

Fixed costs 120,000 45-46. At breakeven point, fixed cost is P67,500


while variable cost is P22,500. If breakeven point in
Rocky Company’s operating leverage is: 1.43 units is 45,000 units, how much units must be sold
33-34. Assume that Corn Co. sold 8,000 units of to earn a pre-tax profit of P10,000? 51,667 units
Product A and 2,000 units of Product B during the 47-48. For the month of March, sale is reported at
past year. The unit contribution margins for P20,000 and expects for monthly increase of 10%
Products A and B are P30 and P60 respectively. in the next six months. If contribution margin ratio is
Corn has fixed costs of P378,000. The breakeven 30% and operating leverage is 3.00, what is the
point in units is 10,500 units income for June? P3,986
35-36. The Stone Company reports the following 49-50. A company reports an operating leverage of
data. 4.00, if sales increased to 120%, net income will
Sales P 800,000 increase by 80%. True
Variable costs 400,000
Fixed costs 80,000
Stone Company’s operating leverage is: 1.25
37-38. The Stone Company reports the following
data.

Sales P 800,000
Variable costs 400,000
Fixed costs 80,000
In order to achieve an operating leverage of 2.00.
Stone Company’s sales must be P320,000
39-40. Hunyango Company reported the following
information:
• Variable Cost Rate is 40%.
• Fixed Cost is P35,000.
• Sales Price per unit is P20.
In order to achieve a pre-tax income equal to 10%
of sales, Hunyango must sell how many units?
3,500 units
41-42. Congo Company reported the following
information:
• Variable Cost is P10 per unit.
• Fixed Cost is P35,000.
• Sales Price per unit is P20.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy