8. In a contribution income statement,a. costs are classified as to function.b. fixed and variable manufacturing costs are combined as one level item.c. fixed costs are shown separately from variable costs.d. fixed manufacturing costs are shown separately from variable manufacturing costs, but fixed and variableoperating costs are combined as one line item.9. Sensitivity analysis, when used in cost-volume-profit analysis,a.is done through various possible scenarios and computes the impact on profit of various predictions of futureevents.b. is done through various possible scenarios and determines the effect of the cost accounting systems used ineach scenario.c. allows the decision-maker to introduce probabilities in the evaluation of decision alternatives.d. allows managers to study how total fixed costs vary withcost drivers.10. The assumptions under which CVP analysis operates primarily hinge on certainty. However, when uncertaintyenters the situation, the results may not be so clear. In this case, the MAS consultant shoulda. use a sample from the entire population of data to generate a decision model and make the decision formanagement.b. do nothing. It is not the MAS consultant's responsibility to be concerned with the uncertainty of the resultsand/or assumptions.c. ascertain the probabilities of various outcomes and work with management on understandingthose probabilities in reference to the CVP decision.d. refer the case to another consultant who is an expert in making accurate predictions.11. Which of the following statements concerning standard costs is false?a. If properly used, standards can'help motivate employees.b. All variances, whether favorable or unfavorable, should be investigated.c. Standard costs should be attainable under conditions of efficient operation.d. A standard cost system may be used with a process costing system or a job order costing system.12. Variance analysis should be useda. as the only source of information for performance evaluation.b. to understand why variances arise.c. to encourage employees to focus on meeting standards.d. to administer appropriate disciplinary action to employees that do not meet standards.13. Standard costing systems may be used witha. just-in-time systems.b. computer-integrated manufacturing systems.c. total quality managementd. all of the above.14. Standard costing is used to isolate the variances between standard costs and actual costs. Itallows management to measure performance and correct inefficiencies, thereby helping toa. allocate costs accurately.b. determine the break-even point.c. control costsd. eliminate management's need for subjective decisions.

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Description: 8. In a contribution income statement,a. costs are classified as to function.b. fixed and variable manufacturing costs are combined as one level item.c. fixed costs are shown separately from variable costs.d. fixed manufacturing costs are shown sepa

Contribution income statement shows the contribution margin by deducting variable cost from sales…

Answered: ed as one level item. sts. om variable…

Business

Accounting

ed as one level item. sts. om variable manufacturing

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 10MC: Which of the following is one of the two approaches used to analyze data in the decision to keep or...

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In the cost equation Y=a+bx, Y represents which of the following? A. fixed costs B. variable costs C. total costs D. units of production
Accumulating costs means that a. costs must be summed and entered on the income statement. b. each cost must be linked to some cost object. c. costs must be measured and tracked. d. costs must be allocated to units of production. e. costs have expired and must be transferred from the balance sheet to the income statement.
Which of the following is one of the two approaches used to analyze data in the decision to keep or discontinue a segment? A. comparing contribution margins and fixed costs B. comparing contribution margins and variable costs C. comparing gross margin and variable costs D. comparing total contribution margin under each alternative
Using the costs listed in the previous problem, classify the costs as either product costs or period costs.
Which costs are assigned using the weighted-average method?
In what way do the cost of production summaries in Chapter 6, prepared using the weighted average cost method, differ from the cost of production summaries presented in Chapter 5? What is the reason for this difference?
Explain how a contribution margin income statement can be used to determine profitability.
Explain how a scatter graph is used to identify and measure cost behavior.
.Which of the following is the format of the income statement that is MOST useful in decision-making? Select one: A.Contribution margin format B.Absorption costing format C.Single-step format D.Multiple-step format
Which of the following is the format of the income statement that is MOST useful in decision-making? Select one: A. Multiple-step format B. Absorption costing format C. Single-step format D. Contribution margin format
Which of the following statements is true? Select one: O a. The most complex of the cost estimation methods is the high-low method. O b. Engineering approach approximates cost function by classifying each account as either variable or fixed based on the analyst's knowledge of how the account behaves. C The high-low method of deriving an estimated cost line uses all the data points available. O d. In approximating the cost function, the account analysis classifies costs based upon an industrial engineer's evaluation of production methods, and material, labor, and overhead requirements. O e. The high-low method is used to derive an estimated line of cost behavior by graphically connecting the two cost amounts identified with the highest and lowest volume levels.
1. Provide examples of how cost–volume–profit analysis can be used for decision-making.2. Explain what is meant by the term ‘relevant range’. 3. Define the term ‘contribution margin’. 4. Define the term ‘profit–volume ratio’ and explain how it can be used for cost–volume–profit analysis. 5. Describe and distinguish between the three different approaches to presenting cost–volume–profit relationships in graphical format.