CBA UOS] 4) A single indirect-cost rate may distort product costs because a. the

Question

CBA UOS] 4) A single indirect-cost rate may distort product costs because a. there is an assumption that all support activities affect all products. b. it recognizes specific activities t c. costs are not consistently recorded. d. it fails to measure the correct amount of total costs. that are required to produce a product 5) Which of the following is NOT an assumption of CVP analysis? a. Costs may be separated into separate fixed and variable components. b. Total revenues and total costs are linear in relation to output units are known and remain constant. d. Proportion of different products will remain constant when multiple products are sold. 6) The account analysis method estimates cost functions a. by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis. b. using time-and-motion studies. c. at a high cost, which is therefore seldom used. d. in a manner that cannot be usefully combined with any other cost estimation methods. but total 7) As the sales volume increases in the relevant range, variable costs per unit variable costs - a. do not change; increase b. do not change; decrease c. increase; do not change d. decrease; do not change 8) Mercy Hospital has total variable costs of 80% of total revenues and fixed costs of $20 million per year. There are 70,000 estimated patient-days for next year. What is the break-even point expressed in total revenue? a. $10 million b. $12.5 million c. $20 million d. $100 million 9) Marketable securities that the investor company buys only with the intent to resell them shortly are called- a. available-for-sale securities b. underpriced securities c. trading securities d options 10) An investor in trading securities has the following information available at December 31, 2012: $10,000 9,000 Market value of trading securities Acquisition cost of trading securities How does the investor report the change in market value on the trading securities at December 31, 2012? unrealized loss of $1,000 on income statement a. b. unrealized gain of $1,000 on income statement $1,000 is added to other comprehensive income account on the balance sheet $1,000 is subtracted from the other comprehensive income account on the balance sheet c. d.

Explanation / Answer

Answers

4. A, There is an assumption that all support activities affect all products.

5. D, Proportion of different products will remain constant when multiple products are sold.

6. answer is A because, The account analysis method estimates cost functions by classifying cost accounts in the subsidiary ledger as variable, fixed, or mixed with respect to the identified level of activity. Typically, managers use qualitative, analysis when making these cost classification decisions.

7. Answer is A, because Variable cost per unit is always remains constant independent of units sold, but total variable cost may increase due increase in selling cost as a result of more units sold.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.