Exam 2 Flashcards
(27 cards)
On a CVP graph, the breakeven point is:
A. The intersection of the total revenue line and fixed expense line.
B. The intersection of the total revenue line and the total expense line.
C. The area between the variable expense line and the fixed expense line.
D. The area between the total revenue line and the total expense line.
B. The intersection of the total revenue line and total expense line.
Cash Disbursement for Selling & Admin =
Fixed Expense + Variable Expense - Depreciation
Margin of Safety in Dollars =
Sales - Breakeven Sales
Breakeven Sales $ = Fixed Cost/CM Ratio
CM Ratio = Contribution Margin/Sales
What are the steps to determine how much cash a company will need to borrow?
Cash Balance +
Cash Receipt +
Cash Spent -
= New Cash Balance
Minimum Requirement +
New Cash Balance -
= Amount Borrow
Cash Disbursement for Manufacturing Overhead =
Variable Overhead (DLH x OH Rate) + Fixed Overhead + = Total Overhead Depreciation - = Cash Disbursement
Variable Overhead Rate Variance =
(Standard Rate - Actual Rate) Actual Hours = Variable Overhead Rate Variance
Actual Rate =
Total Overhead Cost/Total Hours Worked
Degree of Operation Leverage =
Contribution Margin/Profit
The difference between the static-budget and the flexible budget amounts is called?
Sale Volume Variance
Breakeven Point in Units =
Fixed Costs/Contribution Margin per Unit
or
Breakeven in Dollars/Sales Price per Unit
Which of the following is an assumption underlying standard CVP analysis?
A. In multiproduct companies, the sales mix is constant.
B. In manufacturing companies, inventories always change.
C. The price of a product or service is expected to change as volume changes.
D. Fixed expenses will change as volume increases.
A. In multiproduct companies, the sales mix is constant.
Units Produced =
Ending Inventory + Units Sold - Beginning Inventory
Planning Budget for Flights =
Total Cost + (Flight Cost X Flights) + (Passenger Cost X Passengers)
Labor Rate Variance =
(Standard Rate - Actual Rate) x Actual Hours
Labor Quantity Variance =
(Actual Hours X Standard Rate) - (Standard Hours X Standard Rate) = Labor Quantity Variance
When calculating the material quantity variance, which of the following is used?
A. The actual material used
B. The standard materials used
C. The standard price
D. All of the above
D. All of the above
Standard Price (Standard Quantity - Actual Quantity)
A static planning budget is:
A. Used when the mix of products does not change
B. A budget that ignores inflation
C. A budget for a single level of activity
D. Used only for fixed costs
C. A budget for a single level activity
Units to Target Profit =
Target Profit + Fixed Expenses/ Contribution Margin per unit
Which of the following alternatives reflects the proper order of preparing components of the master budget?
- Production Budget
- Sales Budget
- Direct Materials Budget
A. 2, 3, 1
B. 1, 3, 2
C. 3, 1, 2
D. 2, 1, 3
- Sales Budget
- Production Budget
- Direct Materials Budget
D. 2, 1, 3.
Loyal Pet Company expects to sell 3,000 beefy dog treats in January and 7,000 in February for $3.00 each. What will be the total sales revenue reflected in the sales budget for those months?
A. January $2,333; February $1,000
B. Janaury $1,000; February $2,333
C. Janaury $9,000; February $21,000
D. Janaury $21,000; February $9,000
C. January $9,000; February $21,000
The variable overhead rate variance can be defined as which of the following?
A. Standard hour allowed x (Actual rate – Standard rate)
B. Standard rate x (Actual hours – Standard hour allowed)
C. Actual rate x (Actual hours – Standard hours allowed)
D. Actual hours x (Actual rate – Standard rate)
D. Actual Hour x (Actual Rate - Standard Rate)
The contribution margin ratio is equal to:
A. 1 – (Gross Margin/Sales)
B. 1 – (Contribution Margin/Sales)
C. (Sales – Variable Expenses)/Sales
D. Total Manufacturing Expenses/Sales
C. (Sales - Variable Expenses)/Sales
The direct labor budget is based on:
A. The desired ending inventory of finished goods
B. The beginning inventory of finished goods
C. The required production for the period
D. The required materials purchases for the period
C. The required production for the period.
Accounts receivable written off during the year totaled $61,500 while the beginning and ending balance of Allowance for Doubtful Account were $51,300 and $55,700, respectively. The amount of uncollectible accounts expenses for the period was:
A. $57,100
B. $65,900
C. $61,500
D. Cannot be determined from the information given.
B. $65,900
61,500 + (55,700-51,300) = 65,900
Total Accounts Receiveable + (Ending - Beginning) = Uncollectable Accounts for Period
