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ed, hich of the following statements is true? 6. Once the break-even point is A) Variable expenses will remain constant in total. The contribution margin ratio begins to decrease. C) Operating income will increase by the unit contribution margin for each additional D) item sold. The total contribution margin changes from negative to positive.

ed, hich of the following statements is true? 6. Once the break-even point is A) Variable expenses will remain constant in total. The contribution margin ratio begins to decrease. C) Operating income will increase by the unit contribution margin for each additional D) item sold. The total contribution margin changes from negative to positive.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6. Once the break-even point is reached, which of the following statements is true? A) Variable expenses will remain constant in total. The contribution margin ratio begins to decrease. Operating income will increase by the unit contribution margin for each additional B) C) item sold. D) The total contribution margin changes from negative to positive. 7. The break-even in units sold will decrease if there is an increase in which of the following? A) Total fixed expenses. B) Selling price. C) Unit sales volume. D) Unit variable expenses. 8. Which of the following is normally included in product cost under the variable costing method? A) Prime cost and all conversion cost. B) Direct materials cost, direct labour cost, but not manufacturing overhead cost. Direct materials cost, direct labour cost, and variable manufacturing overhead cost. C) D) Prime cost but not conversion cost. 9. Regarding job-order costing and process costing: A) Job-order costing is better in the long run B) Are both suited to companies with long production runs of products that are identical C) Can both be used by the same company but in different circumstances D) Are not acceptable for external financial accounting needs 10. The term "gross margin" for a manufacturing company refers to the excess of sales over which of the following? A) Variable costs, excluding variable selling and administrative expenses. B) Cost of goods sold, including fixed manufacturing overhead. Cost of goods sold, excluding fixed manufacturing overhead. C) D) All variable costs, including variable selling and administrative expenses. 11. An allocated portion of fixed manufacturing overhead is included in product costs under which of the following? Absorption Costing A) No B) Yes C) No D) Yes Variable Costing Yes Yes OGS No No
Transcribed Image Text:6. Once the break-even point is reached, which of the following statements is true? A) Variable expenses will remain constant in total. The contribution margin ratio begins to decrease. Operating income will increase by the unit contribution margin for each additional B) C) item sold. D) The total contribution margin changes from negative to positive. 7. The break-even in units sold will decrease if there is an increase in which of the following? A) Total fixed expenses. B) Selling price. C) Unit sales volume. D) Unit variable expenses. 8. Which of the following is normally included in product cost under the variable costing method? A) Prime cost and all conversion cost. B) Direct materials cost, direct labour cost, but not manufacturing overhead cost. Direct materials cost, direct labour cost, and variable manufacturing overhead cost. C) D) Prime cost but not conversion cost. 9. Regarding job-order costing and process costing: A) Job-order costing is better in the long run B) Are both suited to companies with long production runs of products that are identical C) Can both be used by the same company but in different circumstances D) Are not acceptable for external financial accounting needs 10. The term "gross margin" for a manufacturing company refers to the excess of sales over which of the following? A) Variable costs, excluding variable selling and administrative expenses. B) Cost of goods sold, including fixed manufacturing overhead. Cost of goods sold, excluding fixed manufacturing overhead. C) D) All variable costs, including variable selling and administrative expenses. 11. An allocated portion of fixed manufacturing overhead is included in product costs under which of the following? Absorption Costing A) No B) Yes C) No D) Yes Variable Costing Yes Yes OGS No No
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