# Accounting MCQ: Practice Quiz Questions!

25 Questions | Total Attempts: 388  Settings  .

• 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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