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Question 2

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Started on Monday, 18 September 2017, 9:40 PM

State Finished

Completed on Monday, 18 September 2017, 10:40 PM

Time taken 59 mins 59 secs

Grade 75.00 out of 120.00 (63%)

All public companies that are traded on a stock exchange and governed by the Securities and

Exchange Commission (SEC) must prepare financial statements following

Select one:

a. generally accepted accounting principles

b. accounting principles set by the Federal Trade Commission

c. standards set by the Accounting Principles Board

d. generally appropriate accounting standards

Your answer is correct.

The correct answer is: generally accepted accounting principles

In defining a cost as fixed, the accountant must consider

Select one:

a. the contribution margin

b. projected sales revenue

c. the variable costs

d. the relevant range

Your answer is correct.

The correct answer is: the relevant range

ACCT526-850_010-201820

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Question 3

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Question 4

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There is an important relationship between contribution margin and profit. Which of the following

statements is NOT true?

Select one:

a. as the number of units sold increases, total contribution margin and fixed costs increase

b. as the number of units sold rises, profit increases by the additional contribution margin

per unit

c. as the number of units sold decreases, total contribution margin decreases, but fixed

costs remain the same

d. as the number of units sold increases, total contribution margin increases, but fixed costs

remain the same

Your answer is incorrect.

The correct answer is: as the number of units sold increases, total contribution margin and fixed costs increase

An example of a discretionary fixed cost is:

Select one:

a. management training

b. depreciation of buildings and equipment

c. insurance

d. taxes on real estate

Your answer is correct.

The correct answer is: management training

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Question 5

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Question 6

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The following data pertain to activity and costs for two recent months:

Activity level in units October

5,000

 November

 10,000

Variable costs $10,000 ?

Fixed costs 30,000 ?

Mixed costs 20,000 ?

Total costs $60,000 $75,000

Assuming that these activity levels are within the relevant range, the mixed costs for November were:

Select one:

a. $20,000

b. $25,000

c. $35,000

d. $40,000

Your answer is correct.

The correct answer is: $25,000

A limitation of using the scattergraph method to estimate the cost components of total cost is

Select one:

a. the scattergraph method requires the use of statistical software

b. the choice of the line used to estimate the cost components is subjective

c. the scattergraph method is not an accepted method for many companies

d. the scattergraph method is complex and costly to use

Your answer is incorrect.

The correct answer is: the choice of the line used to estimate the cost components is subjective

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