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CVP
ABC
Overhead
Managerial Terms
C is for Costing
100
A company's only product sells for $150 per unit. Its variable costs are $90/unit and its fixed costs total $80,000. What is its contribution margin per unit?
What is $60
100
Harris Corp has identified the following data in its two production departments: Manufacturing $400,000 and packaging $800,000. What is the company's single plantwide overhead rate if the total direct labor hours were 40,000 during the period?
What is $30/DLH
100
The traditional costing approach assigns all manufacturing costs to products. TRUE / FALSE
What is TRUE
100
A _____ cost remains unchanged in total amount regardless of output levels.
What is fixed
100
The premise of ______ is that it takes activities to make products and provide services and these activities drive costs.
What is ABC
200
A company's only product sells for $150 per unit. Its variable costs are $90/unit and its fixed costs total $96,000. What is its contribution margin ratio?
What is 40%
200
Harris Corp has identified the following data in its two production departments: Manufacturing $400,000 and packaging $800,000. What is the company's departmental overhead rate for MANUFACTURING if the total direct labor hours were 20,000 DLH in the manufacturing department and 30,000 DLH in the packaging department.
What is $20/DLH
200
The use of absorption costing can result in misleading product cost information. TRUE / FALSE
What is TRUE
200
A ______ cost per unit changes with the changes in production level.
What is variable
200
________ assumes that products absorb all costs incurred to produce them.
What is absorption costing
300
Horizon phones sells its phones for $100 per unit. Fixed costs are $210,000 and variable costs are $40 per unit. What is the break even point in units?
What is 3,500
300
_______ costing method assumes all products use overhead costs in the same proportions.
What is plantwide overhead rate method
300
If a firm's forecasted sales are $250,000 and its break-even sales are $190,000, the margin of safety (in dollars) is:
What is $60,000
300
When output volume increases, variable costs per unit ________
What is increase
300
The _________ is a way to estimate the cost equation by graphically connecting the two cost amounts at the highest and lowest unit volumes.
What is high low method
400
A company's only product sells for $150 per unit. Its variable costs are $90/unit and its fixed costs total $96,000. What is its break even point in units?
What is 1600 units
400
What is an advantage of using the single plantwide overhead rate? What is a disadvantage?
What is advantage is simplicity and disadvantage is not always accurate
400
During a given year, if a company produces more units than it sells, then ending inventory units will be less than beginning inventory units. TRUE / FALSE
What is FALSE
400
The excess of expected sales over the break-even sales is called a company's ________.
What is Margin of safety
400
Kinetic Company estimates that overhead costs for the next year will be $1,600,000 for indirect labor and $400,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 50,000 direct labor hours are planned for this next year, then the plantwide overhead rate is
What is $40/DLH
500
IF the contribution margin ratio decreases from 50% to 25% - unit sales would have to _______.
What is double
500
Activity based costing is only useful for manufacturing costing is only useful for manufacturing companies. True or False
What is FALSE - think trip example
500
A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?
What is 6,500
500
________ is the amount by which a product's unit selling price exceeds its total variable cost per unit.
What is contribution margin per unit
500
Direct labor $3.50 per unit Direct materials $1.25 per unit Overhead Total variable overhead $41,400 Total fixed overhead $150,000 Expected units to be produced 18,000 units What is total product cost per unit under VARIABLE COSTING?
What is 7.05