86. A common finding in many studies is that a high percentage of operating income is a. contributed by a small number of customers. b. contributed to evenly by most customers. c. the result of high discounting. d. the result of cooperative efforts by many low-volume customers. 87. Loss-causing customers a. should be eliminated. b. should be evaluated for ways to become profitable customers. c. should be retained because each customer adds to long-run profitability. d. do not exist because additional customer sales always increase profits. 88. Customers are more valuable when they are all EXCEPT a. well known in the community. b. expected to continue to do business with a company. c. in an industry with high-growth potential. d. require special attention on a regular basis. 89. Dropping an unprofitable customer will a. eliminate long-run costs assigned to that customer. b. eliminate most short-run costs assigned to that customer. c. decrease long-run profitability. d. increase the potential to cross-sell other products that are more desirable. 90. More insight into the static-budget variance can be gained by subdividing it into a. the sales-mix variance and the sales-quantity variance. b. the market-share variance and the market-size variance. c. the flexible-budget variance and the sales-volume variance. d. a cost hierarchy. 91. The static-budget variance will be favorable when a. actual unit sales are less than budgeted unit sales. b. the actual contribution margin is greater than the static-budget contribution margin. c. the actual sales mix shifts toward the less profitable units. d. the composite unit for the actual mix is greater than for the budgeted mix. 92. More insight into the sales-volume variance can be gained by subdividing it into a. the sales-mix variance and the sales-quantity variance. b. the market-share variance and the market-size variance. c. the flexible-budget variance and the market-size variance. d. a cost hierarchy. 93. The budgeted contribution margin per composite unit for the budgeted mix can be computed by a. dividing the total budgeted contribution margin by the actual total units. b. dividing the total budgeted contribution margin by the total budgeted units. c. dividing the actual total contribution margin by the total actual total units d. dividing the actual total contribution margin by the total budgeted units. 94. The sales-mix variance results from a difference between the a. actual market share and the budgeted market share. b. actual contribution margin and the budgeted contribution margin. c. budgeted contribution margin per composite unit for the actual mix and the budgeted contribution margin per composite unit for the budgeted mix. d. actual market size in units and the budgeted market size in units. 95. The sales-mix variance will be unfavorable when a. the actual sales mix shifts toward the less profitable units. b. the composite unit for the actual mix is greater than for the budgeted mix. c. actual unit sales are less than budgeted unit sales. d. the actual contribution margin is greater than the static-budget contribution margin. 96. The sales-mix variance will be favorable when a. the actual contribution margin is greater than the static-budget contribution margin. b. actual unit sales are less than budgeted unit sales. c. the actual sales mix shifts toward the less profitable units. d. the composite unit for the actual mix is greater than for the budgeted mix. 97. An unfavorable sales-mix variance would MOST likely be caused by a. a new competitor providing better service in the high-margin product sector. b. a competitor having distribution problems with high-margin products. c. the company offering low-margin products at a higher price. d. the company experiencing quality-control problems that get negative media coverage of low-margin products. 98. A shift towards a mix of products with a lower contribution-margin per unit will MOST likely result in a. an unfavorable sales-mix variance. b. an unfavorable sales-quantity variance. c. a favorable sales-mix variance. d. a favorable sales-quantity variance. 99. The sales-quantity variance will be unfavorable when a. the composite unit for the actual mix is greater than for the budgeted mix. b. actual unit sales are less than budgeted unit sales. c. the actual contribution margin is greater than the static-budget contribution margin. d. the actual sales mix shifts toward the less profitable units. 100. A favorable sales-quantity variance would MOST likely be caused by a. a new competitor providing better service in the high-margin product sector. b. a competitor having distribution problems with high-margin products. c. the company offering low-margin products at a higher price. d. the company experiencing quality-control problems that get negative media coverage of low-margin products. 101. (Actual sales quantity in units – Static budget sales quantity in units) x Budgeted contribution margin per unit = a. the sales-volume variance. b. the sales-mix variance. c. the sales-quantity variance. d. the market-share variance. 102. The sales-quantity variance results from a difference between a. the actual sales mix and the budgeted sales mix. b. the actual quantity of units sold and the budgeted quantity of unit sales in the static budget. c. actual contribution margin and the budgeted contribution margin. d. actual market size in units and the budgeted market size in units. : 103. What is the actual contribution margin for the month? a. $3,750 b. $4,400 c. $4,250 d. $3,450 104. What is the contribution margin for the flexible budget? a. $3,750 b. $4,400 c. $4,250 d. $3,450 105. For the contribution margin, what is the total static-budget variance? a. $300 favorable b. $950 unfavorable c. $500 favorable d. $800 unfavorable 106. For the contribution margin, what is the total flexible-budget variance? a. $300 favorable b. $950 unfavorable c. $500 favorable d. $800 unfavorable 107. What is the budgeted contribution margin per composite unit for the actual mix? a. $13.80 b. $14.00 c. $14.36 d. $14.80 108. What is the budgeted contribution margin per composite unit for the budgeted mix? a. $13.80 b. $14.00 c. $14.36 d. $14.80 109. For May, Edna will report a. a favorable sales-mix variance. b. an unfavorable sales-mix variance. c. a favorable sales-volume variance. d. an unfavorable sales-volume variance. 110. What is the budgeted contribution margin per composite unit for the actual mix? a. $8.00 b. $8.60 c. $9.00 d. $9.60 111. What is the budgeted contribution margin per composite unit for the budgeted mix? a. $8.00 b. $8.60 c. $9.00 d. $9.60 112. For May, Edna will report a. a favorable sales-mix variance. b. an unfavorable sales-mix variance. c. a favorable sales-volume variance. d. an unfavorable sales-volume variance. 113. What is the budgeted sales-mix percentage for the Standard and the Super vacuum cleaners, respectively? a. 0.80 and 0.20 b. 0.70 and 0.30 c. 0.20 and 0.80 d. 0.30 and 0.70 114. What is the total sales-volume variance in terms of the contribution margin? a. $108,000 unfavorable b. $108,000 favorable c. $278,000 favorable d. $448,000 favorable 115. What is the total sales-quantity variance in terms of the contribution margin? a. $110,000 favorable b. $170,000 favorable c. $278,000 favorable d. $448,000 favorable 116. What is the total sales-mix variance in terms of the contribution margin? a. $110,000 favorable b. $170,000 favorable c. $278,000 favorable d. $448,000 favorable 117. More insight into the sales-quantity variance can be gained by subdividing it into a. the sales-mix variance and the sales-volume variance. b. the market-share variance and the market-size variance. c. the flexible-budget variance and the sales-volume variance. d. a cost hierarchy. 118. The market-share variance results from a difference between the a. actual market share and the budgeted market share. b. actual contribution margin and the budgeted contribution margin. c. budgeted contribution margin per composite unit for the actual mix and the budgeted contribution margin per composite unit for the budgeted mix. d. actual market size in units and the budgeted market size in units. 119. The market-share variance will be favorable when a. the flexible-budget contribution margin is greater than the static-budget contribution margin. b. the actual market share is greater than the budgeted market share. c. actual market size in units is less than budgeted market size in units. d. actual unit sales are less than budgeted unit sales. 120. The market-share variance is MOST influenced by a. economic downturns in the economy. b. how well managers perform relative to their peers. c. shifts in consumer preferences that are outside of the manager’s control. d. rates of inflation.

86. A common
finding in many studies is that a high percentage of operating income is
a. contributed by a small number of
customers.
b. contributed to evenly by most customers.
c. the result of high discounting.
d. the result of cooperative efforts by many
low-volume customers.

87. Loss-causing
customers
a. should be eliminated.
b. should be evaluated for ways to become
profitable customers.
c. should be retained because each customer
adds to long-run profitability.
d. do not exist because additional customer
sales always increase profits.

88. Customers
are more valuable when they are all EXCEPT
a. well known in the community.
b. expected to continue to do business with a
company.
c. in an industry with high-growth potential.
d. require special attention on a regular
basis.

89. Dropping
an unprofitable customer will
a. eliminate long-run costs assigned to that
customer.
b. eliminate most short-run costs assigned to
that customer.
c. decrease long-run profitability.
d. increase the potential to cross-sell other
products that are more desirable.

90. More
insight into the static-budget variance can be gained by subdividing it into
a. the sales-mix variance and the
sales-quantity variance.
b. the market-share variance and the
market-size variance.
c. the flexible-budget variance and the
sales-volume variance.
d. a cost hierarchy.

91. The
static-budget variance will be favorable when
a. actual unit sales are less than budgeted
unit sales.
b. the actual contribution margin is greater
than the static-budget contribution margin.
c. the actual sales mix shifts toward the
less profitable units.
d. the composite unit for the actual mix is
greater than for the budgeted mix.

92. More
insight into the sales-volume variance can be gained by subdividing it into
a. the sales-mix variance and the
sales-quantity variance.
b. the market-share variance and the market-size
variance.
c. the flexible-budget variance and the
market-size variance.
d. a cost hierarchy.

93. The
budgeted contribution margin per composite unit for the budgeted mix can be
computed by
a. dividing the total budgeted contribution
margin by the actual total units.
b. dividing the total budgeted contribution
margin by the total budgeted units.
c. dividing the actual total contribution margin by the total actual total
units
d. dividing the actual total contribution
margin by the total budgeted units.

94. The
sales-mix variance results from a difference between the
a. actual market share and the budgeted
market share.
b. actual contribution margin and the budgeted
contribution margin.
c. budgeted contribution margin per composite
unit for the actual mix and the budgeted contribution margin per composite unit
for the budgeted mix.
d. actual market size in units and the
budgeted market size in units.

95. The
sales-mix variance will be unfavorable when
a. the actual sales mix shifts toward the
less profitable units.
b. the composite unit for the actual mix is
greater than for the budgeted mix.
c. actual unit sales are less than budgeted
unit sales.
d. the actual contribution margin is greater
than the static-budget contribution margin.

96. The
sales-mix variance will be favorable when
a. the actual contribution margin is greater
than the static-budget contribution margin.
b. actual unit sales are less than budgeted
unit sales.
c. the actual sales mix shifts toward the
less profitable units.
d. the composite unit for the actual mix is
greater than for the budgeted mix.

97. An
unfavorable sales-mix variance would MOST likely be caused by
a. a new competitor providing better service
in the high-margin product sector.
b. a competitor having distribution problems
with high-margin products.
c. the company offering low-margin products
at a higher price.
d. the company experiencing quality-control
problems that get negative media coverage of low-margin products.

98. A
shift towards a mix of products with a lower contribution-margin per unit will
MOST likely result in
a. an unfavorable sales-mix variance.
b. an unfavorable sales-quantity variance.
c. a favorable sales-mix variance.
d. a favorable sales-quantity variance.

99. The
sales-quantity variance will be unfavorable when
a. the composite unit for the actual mix is
greater than for the budgeted mix.
b. actual unit sales are less than budgeted
unit sales.
c. the actual contribution margin is greater
than the static-budget contribution margin.
d. the actual sales mix shifts toward the
less profitable units.

100. A
favorable sales-quantity variance would MOST likely be caused by
a. a new competitor providing better service
in the high-margin product sector.
b. a competitor having distribution problems
with high-margin products.
c. the company offering low-margin products
at a higher price.
d. the company experiencing quality-control
problems that get negative media coverage of low-margin products.

101. (Actual
sales quantity in units – Static budget sales quantity in units) x Budgeted
contribution margin per unit =
a. the sales-volume variance.
b. the sales-mix variance.
c. the sales-quantity variance.
d. the market-share variance.

102. The
sales-quantity variance results from a difference between
a. the actual sales mix and the budgeted
sales mix.
b. the actual quantity of units sold and the
budgeted quantity of unit sales in the static budget.
c. actual contribution margin and the
budgeted contribution margin.
d. actual market size in units and the
budgeted market size in units.

:

103. What is
the actual contribution margin for the month?
a. $3,750
b. $4,400
c. $4,250
d. $3,450

104. What is
the contribution margin for the flexible budget?
a. $3,750
b. $4,400
c. $4,250
d. $3,450

105. For the
contribution margin, what is the total static-budget variance?
a. $300 favorable
b. $950 unfavorable
c. $500 favorable
d. $800 unfavorable

106. For the
contribution margin, what is the total flexible-budget variance?
a. $300 favorable
b. $950 unfavorable
c. $500 favorable
d. $800 unfavorable

107. What is
the budgeted contribution margin per composite unit for the actual mix?
a. $13.80
b. $14.00
c. $14.36
d. $14.80

108. What is
the budgeted contribution margin per composite unit for the budgeted mix?
a. $13.80
b. $14.00
c. $14.36
d. $14.80

109. For May,
Edna will report
a. a favorable sales-mix variance.
b. an unfavorable sales-mix variance.
c. a favorable sales-volume variance.
d. an unfavorable sales-volume variance.

110. What is
the budgeted contribution margin per composite unit for the actual mix?
a. $8.00
b. $8.60
c. $9.00
d. $9.60

111. What is
the budgeted contribution margin per composite unit for the budgeted mix?
a. $8.00
b. $8.60
c. $9.00
d. $9.60

112. For May,
Edna will report
a. a favorable sales-mix variance.
b. an unfavorable sales-mix variance.
c. a favorable sales-volume variance.
d. an unfavorable sales-volume variance.

113. What is
the budgeted sales-mix percentage for the Standard and the Super vacuum
cleaners, respectively?
a. 0.80 and 0.20
b. 0.70 and 0.30
c. 0.20 and 0.80
d. 0.30 and 0.70

114. What
is the total sales-volume variance in terms of the contribution margin?
a. $108,000 unfavorable
b. $108,000 favorable
c. $278,000 favorable
d. $448,000 favorable

115. What
is the total sales-quantity variance in terms of the contribution margin?
a. $110,000 favorable
b. $170,000 favorable
c. $278,000 favorable
d. $448,000 favorable

116. What
is the total sales-mix variance in terms of the contribution margin?
a. $110,000 favorable
b. $170,000 favorable
c. $278,000 favorable
d. $448,000 favorable

117. More
insight into the sales-quantity variance can be gained by subdividing it into
a. the sales-mix variance and the
sales-volume variance.
b. the market-share variance and the
market-size variance.
c. the flexible-budget variance and the
sales-volume variance.
d. a cost hierarchy.

118. The
market-share variance results from a difference between the
a. actual market share and the budgeted
market share.
b. actual contribution margin and the
budgeted contribution margin.
c. budgeted contribution margin per composite
unit for the actual mix and the budgeted contribution margin per composite unit
for the budgeted mix.
d. actual market size in units and the
budgeted market size in units.

119. The
market-share variance will be favorable when
a. the flexible-budget contribution margin is
greater than the static-budget contribution margin.
b. the actual market share is greater than
the budgeted market share.
c. actual market size in units is less than
budgeted market size in units.
d. actual unit sales are less than budgeted
unit sales.

120. The
market-share variance is MOST influenced by
a. economic downturns in the economy.
b. how well managers perform relative to
their peers.
c. shifts in consumer preferences that are
outside of the manager’s control.
d. rates of inflation.