Managerial accounting part vii

Question 1

Reducing reliance on human workers and instead investing heavily in computers and online
technology will

a. reduce fixed costs and increase variable costs.
b. reduce variable costs and increase fixed costs.
c. have no effect on the relative proportion of fixed and variable costs.
d. make the company less susceptible to economic swings

Answer 1

b. reduce variable costs and increase fixed costs.

Question 2

3. Advances in computerized systems, technological innovation, and automation have changed
   the manufacturing environment drastically by

a. an increasing proportion of direct labor costs and an increasing proportion of
overhead costs.
b. an increasing proportion of direct labor costs and a decreasing proportion of overhead
costs.
c. a decreasing proportion of direct labor costs and a decreasing proportion of overhead
costs.
d. a decreasing proportion of direct labor costs and an increasing proportion of overhead
costs.

Answer 2

d. a decreasing proportion of direct labor costs and an increasing proportion of overhead

Question 3

Danny’s Lawn Equipment has actual sales of $800,000 and a break-even point of
$520,000. How much is its margin of safety ratio?

A) 35%
B) 46%
C) 54%
D) 65%

Answer 3

A) 35%

Question 4

. In a CVP income statement, a selling expense is generally

A) completely a variable cost.
B) completely a fixed cost.
C) neither a variable cost nor a fixed cost.
D) partly a variable cost and partly a fixed cost.

Answer 4

D) partly a variable cost and partly a fixed cost.

Question 5

margin of safety ratio =

Answer 5

(Actual Sales - Breakeven Point) / Actual sales

Question 6

Often the most difficult part of computing accurate unit costs is determining the proper
amount of _________ to assign to each product, service, or job.

a. direct materials
b. direct labor
c. overhead
d. direct materials and direct labor

Answer 6

c. overhead