University of Louisiana, Lafayette. ACCT 526 Midterm Exam. Started on Monday, 18 September 2017, 9:40 PM
State Finished
Completed on Monday, 18
... [Show More] September 2017, 10:40 PM
Time taken 59 mins 59 secs
Grade 75.00 out of 120.00 (63%)
All public companies that are traded on a stock exchange and governed by the Securities and
Exchange Commission (SEC) must prepare financial statements following
Select one:
a. generally accepted accounting principles
b. accounting principles set by the Federal Trade Commission
c. standards set by the Accounting Principles Board
d. generally appropriate accounting standards
Your answer is correct.
The correct answer is: generally accepted accounting principles
In defining a cost as fixed, the accountant must consider
Select one:
a. the contribution margin
b. projected sales revenue
c. the variable costs
d. the relevant range
Your answer is correct.
The correct answer is: the relevant range
ACCT526-850_010-201820
Question 3
Incorrect
Mark 0.00 out of
3.00
Question 4
Correct
Mark 3.00 out of
3.00
There is an important relationship between contribution margin and profit. Which of the following
statements is NOT true?
Select one:
a. as the number of units sold increases, total contribution margin and fixed costs increase
b. as the number of units sold rises, profit increases by the additional contribution margin
per unit
c. as the number of units sold decreases, total contribution margin decreases, but fixed
costs remain the same
d. as the number of units sold increases, total contribution margin increases, but fixed costs
remain the same
Your answer is incorrect.
The correct answer is: as the number of units sold increases, total contribution margin and fixed costs increase
An example of a discretionary fixed cost is:
Select one:
a. management training
b. depreciation of buildings and equipment
c. insurance
d. taxes on real estate
Your answer is correct.
The correct answer is: management training
Question 5
Correct
Mark 3.00 out of
3.00
Question 6
Incorrect
Mark 0.00 out of
3.00
The following data pertain to activity and costs for two recent months:
Activity level in units October
5,000
November
10,000
Variable costs $10,000 ?
Fixed costs 30,000 ?
Mixed costs 20,000 ?
Total costs $60,000 $75,000
Assuming that these activity levels are within the relevant range, the mixed costs for November were:
Select one:
a. $20,000
b. $25,000
c. $35,000
d. $40,000
Your answer is correct.
The correct answer is: $25,000
A limitation of using the scattergraph method to estimate the cost components of total cost is
Select one:
a. the scattergraph method requires the use of statistical software
b. the choice of the line used to estimate the cost components is subjective
c. the scattergraph method is not an accepted method for many companies
d. the scattergraph method is complex and costly to use
Your answer is incorrect.
The correct answer is: the choice of the line used to estimate the cost components is subjective
Question 7
Correct
Mark 3.00 out of
3.00
Question 8
Correct
Mark 3.00 out of
3.00
Roddy Company has the following cost formulas for overhead:
Cost Cost Formula
Indirect materials $2,000 + $0.40/machine hour
Maintenance $1,500 + $0.60/machine hour
Machine setup $0.30/machine hour
Utilities $200 + $0.10/machine hour
Depreciation $800
Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be:
Select one:
a. $5,620
b. $5,340
c. $4,500
d. $5,200 [Show Less]