Accounting MCQ: Practice Quiz Questions!

25 Questions | Total Attempts: 388

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Accounting MCQ: Practice Quiz Questions! - Quiz

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Questions and Answers
  • 1. 
    The analysis of the relationship between what a company buys an item for and the level of sales and their impact on income is known as:
    • A. 

      Cost-volume-loss analysis

    • B. 

      Cost-sales-expense analysis

    • C. 

      Cost-volume-profit analysis

    • D. 

      Expense-sales-volume analysis

  • 2. 
    The level of sales necessary to cover all the costs incurred by the firm is known as the:
    • A. 

      Optimum gross margin

    • B. 

      Contribution margin

    • C. 

      Contribution margin ratio

    • D. 

      Break-even point

  • 3. 
    Using the information in Table M6-1, the cost of goods sold per pound is:
    • A. 

      $1.20

    • B. 

      $7.86

    • C. 

      $11.00

    • D. 

      $8.00

  • 4. 
    Using the information in Table M6-1, the total fixed administrative cost is:
    • A. 

      $6,000

    • B. 

      $2,100

    • C. 

      $3,900

    • D. 

      $2,400

  • 5. 
    The income statement that classifies cost by their behavior is called the:
    • A. 

      Cash-basis income statement

    • B. 

      Single-step income statement

    • C. 

      Contribution income statement

    • D. 

      Functional income statement

  • 6. 
    When the costs for the period are broken into variable and fixed categories on the income statement, it is known as the:
    • A. 

      Contribution income statement

    • B. 

      Full-costing income statement

    • C. 

      Absorption income statement

    • D. 

      Functional income statement

  • 7. 
    Using the information in Table M6-1, the total contribution margin for Jackson’s for the month of June is:
    • A. 

      $10,100

    • B. 

      $9,700

    • C. 

      $14,700

    • D. 

      $20,000

  • 8. 
    Using the information found in Table M6-1, the total variable cost for Jackson for the month of June is:
    • A. 

      $45,300

    • B. 

      $35,000

    • C. 

      $5,500

    • D. 

      $39,900

  • 9. 
    Which one of the following is an assumption made regarding CVP analysis?
    • A. 

      Variable cost per unit changes as activity changes within the relevant range.

    • B. 

      Total fixed costs change in the relevant range.

    • C. 

      All costs can be classified as either fixed or variable.

    • D. 

      Fixed cost per unit is constant within the relevant range.

  • 10. 
    Using the information in Table M6-2, the variable cost per coin is:
    • A. 

      $4.69

    • B. 

      $3.90

    • C. 

      $1.11

    • D. 

      $3.06

  • 11. 
    There are several variations of the cost-volume-profit formula. One determines the required sales in dollars, while the other determines sales in units. The formula which determines required sales in dollars uses the:
    • A. 

      Contribution margin per unit

    • B. 

      Break-even point in units

    • C. 

      Contribution margin ratio

    • D. 

      Gross profit point

  • 12. 
    The main difference between a contribution income statement and a functional income statement is that the functional income statement does not classify costs as:
    • A. 

      Product and mixed

    • B. 

      Period and fixed

    • C. 

      Product and period

    • D. 

      Fixed and variable

  • 13. 
    Hemingway’s Hot Dogs sell for $2.00 each. The hot dogs cost Hemingway $0.95 and commissions are $0.15 per hot dog. How many hot dogs must Hemingway sell if his fixed costs for the stand and rent are $3,500?
    • A. 

      3,889

    • B. 

      1,750

    • C. 

      3,182

    • D. 

      2,500

  • 14. 
    ______________ occurs when a company generates neither a profit nor a loss.
    • A. 

      Balanced CVP

    • B. 

      Normal sales volume

    • C. 

      A net balance

    • D. 

      Break-even

  • 15. 
    The formula to project the number of units to sell to achieve a specific target profit is:
    • A. 

      Contribution Margin + Fixed Costs/Target Profit

    • B. 

      Total Fixed Costs + Target Profit/Contribution Margin per Unit

    • C. 

      Contribution Margin + Fixed Costs/Target Profit

    • D. 

      Total Contribution Margin/Total Fixed Costs + Target Profit

  • 16. 
    The type of income statement not allowed for external use under GAAP is known as the:
    • A. 

      Contribution income statement

    • B. 

      Absorption income statement

    • C. 

      Full-costing income statement

    • D. 

      Functional income statement

  • 17. 
    Based on the information in Table M6-4 for Mel’s Music Shop, the average unit sales price was:
    • A. 

      $42.50

    • B. 

      $85.00

    • C. 

      $4.55

    • D. 

      $9.10

  • 18. 
    Tim’s Taco Stand sells tacos for $0.95 each. The cost to make each taco is $0.55.  If the fixed costs are $600 per month, what are the total sales he needs to break even?
    • A. 

      $1,425

    • B. 

      $2,000

    • C. 

      $1,000

    • D. 

      $800

  • 19. 
    Based on the information in Table M6-1, the number of units that Jackson must sell to earn income of $10,000 is (rounded up to the nearest whole unit):
    • A. 

      6,361

    • B. 

      3,794

    • C. 

      833

    • D. 

      5,982

  • 20. 
    Arlene’s Art Supplies is trying to determine how much each folio board contributes toward fixed costs. The boards sell for $9.00 each and Arlene pays $4.75 for each board. Arlene pays her employees a commission of 10% and the administrative costs are 5% of sales. What is the contribution margin for each folio board?
    • A. 

      $5.20

    • B. 

      $2.90

    • C. 

      $2.80

    • D. 

      $3.40

  • 21. 
    Refer to the information in Table M6-3 for Carol Ann’s Shoe Store. The number of pairs of shoes that must be sold to break even is (rounded up to the next whole unit):
    • A. 

      4,500

    • B. 

      3,652

    • C. 

      4,596

    • D. 

      3,350

  • 22. 
    Hemingway’s Hot Dogs sell for $2.00 each. The hot dogs cost Hemingway $0.95 and commissions are $0.15 per hot dog. What total sales dollars must Hemingway sell if his fixed costs for the stand and rent are $3,500 and he wants to earn a profit of $2,000?
    • A. 

      $9,000

    • B. 

      $12,222

    • C. 

      $10,000

    • D. 

      $5,500

  • 23. 
    Based on information from Table M6-1, the variable administrative cost for each pound of cheese is:
    • A. 

      $1.20

    • B. 

      $0.42

    • C. 

      $0.21

    • D. 

      $0.48

  • 24. 
    Using the information in Table M6-1, the variable cost per pound for selling expenses is:
    • A. 

      $0.56

    • B. 

      $0.64

    • C. 

      $2.00

    • D. 

      $0.53

  • 25. 
    Using the information in Table M6-3, the total selling costs for the period are:
    • A. 

      $23,000

    • B. 

      $10,500

    • C. 

      $7,500

    • D. 

      $4,500

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