A standard cost:a. is the "true" cost of a unit of production.b. is a budget for the production of one unit of a product or service.c. can be useful in calculating equivalent units.d. is normally the average cost within an industry.e. is almost always the actual cost from previous years.

Option a: This option is incorrect because standard cost is not a true cost of production. The…

Answered: A standard cost: a. is the "true" cost…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 5DQ

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1. Which of the following is TRUE about contribution margin? Select one: A. The amount remaining after cost of goods sold has been deducted from sales revenues. B. The amount remaining fixed costs have been deducted from sales revenue. C. The amount remaining after fixed costs have been deducted from variable costs. D. The amount remaining after variable costs have been deducted from sales revenue. 2. Which of the following financial statements reports information as of a specific date? Select one: A. Statement of Changes in Equity. B. Statement of Profit or Loss and other Comprehensive Income. C. Statement of Cash Flows. D. Statement of Financial Position. 3. The following are objectives of budgeting EXCEPT: Select one: A. Compare organisational actual achievement with planned goals. B. Ensuring departments within an organisation operate as a team. C. Establishing and communicating organisational goals. D. Developing appropriate high technology information system for an…
25. A standard cost Multiple Choice a)is the average cost within an industry b)is useful in calculating equivalent units c)is a budget for the production of one unit of a product d)incorporates the opportunity cost of a unit of production e)shows the actual cost from previous years
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Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…
Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Cost Product B Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 160,000 108 142 2,160 2,840 42 38 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor.
1. Match each of the following terms with the appropriate definition. The difference between actual and budgeted revenue or cost caused by the difference between the actual number of units sold or used and the budgeted number of units. A budget prepared after an operating period is complete in order to help managers evaluate past performance; uses fixed and variable costs in determining total costs. The costs that should be incurred under normal conditions to produce a specific product or to perform a specific service. The difference between 1. Cost Variance total overhead cost that would have been expected if the actual operating 2. Volume Variance volume had been accurately predicted and 3. Price Variance the amount of overhead cost that was allocated to products using the predetermined standard overhead rate. 4. Quantity Variance 5. Standard Costs A planning budget based on a single predicted amount 6. Fixed Budget of sales or production volume; unsuitable for 7. Flexible Budget…
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When preparing a forecasted contribution margin income statement and you are given the units produced, how do you compute dollars per unit?
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A standard cost: a. is the "true" cost of a unit of production. b. is a budget for the production of one unit of a product or service. c. can be useful in calculating equivalent units. d. is normally the average cost within an industry. e. is almost always the actual cost from previous years.