All All s. For the following, Indicate on your Scantron TRUE (A) or FALSE (B) ?1
ID: 2437645 • Letter: A
Question
All All s. For the following, Indicate on your Scantron TRUE (A) or FALSE (B) ?1. When activity increases, a variable cost stays the same perunir. .-2. The prime costs of manufacturing are direct labor and direct material 3. Fixed costs per unit increase as volume increases 4. The relevant range is the span of activity in which a fixed cost will stay constant. Es. A mixed cost cannot be a selling expense. 6. It is possible to increase net income by lowering the sales price of a product 7 Depreciation would be added back to net income in the cash flow operating section. 8. If accounts receivable increased from the beginning to the end of the year, it would be indicative not all of this year's credit sales were collected. 9 The principal focus of managerial accounting is to provide financial information Tto. Preferred stock will receive a dividend before common stock 11. Earnings per share (EPS) are required to be shown on the income statement. for decision-making by external users. _12. Generally preferred stock has a fixed dividend rate. breakeven point is where revenue equals total cost 14. Contribution margin is the excess of sales over the excess of sales over the cost of merchandise 1 15. A company's production is l limited to 4,000 units per week. This is a constraint. 16. A firm had $100,000 of net income in 2010. Depreciation was $20,000 and accounts receivable increased by $10,000. The net cash flow from operations was: a. $ 70,000 b. $ 90,000. c. $110,000. d. $130,000.Explanation / Answer
Solution 15:
1. True, when activitiy increases, variable cost stays the same per unit.
2. True, prime cost is direct labor and direct material
3. False, fixed cost per unit decreases as volume increases
4. True, The relevant range is span of activity in which a fixed cost will stay constant.
5. False, selling expense could be a mixed cost/
6. True, it is possible to increase net income by lowering sales price of product.
7. True, depreciation is added back to net income in cash flow operating section.
8. True
9. False, The principal focus of managerial accounting is to provide financial information for decision making by internal users.
10. True, preferred stock will receive a dividend before common stock.
11. True, Earning per share are required to be shown on the income statement.
12. True, preferred stock generally has a fixed dividend rate.
13. True, breakeven point is where revenue equals total cost.
14. False, contribution margin is excess of sales over variable cost.
15. True
Solution 16:
Cash flow from operationg = Net Income + Depreciation - Increase in accounts receivables
= $100,000 + $20,000 - $10,000 = $110,000
Hence option c is correct.
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