B. Acy Bachelor of Accountancy Cost and Managerial Accounting 2

Question 1

Break-even point in units is calculated as:

Accepted Answer

Fixed costs divided by contribution margin per unit

Answer

Break-even units = Fixed costs ÷ Contribution margin per unit, the point at which total revenue equals total costs.

Question 2

In process costing, equivalent units of production are used to:

Accepted Answer

Allocate costs to partially completed units

Answer

Equivalent units convert partially completed work-in-process into a whole-unit equivalent to allocate costs fairly.

Question 3

The margin of safety measures:

Accepted Answer

How far sales can fall before reaching break-even

Answer

Margin of safety is the excess of budgeted or actual sales over break-even sales, showing the cushion before a loss.

Question 4

Which budget is typically prepared first in the master budget process?

Accepted Answer

Sales budget

Answer

The sales budget is prepared first because all other budgets depend on projected sales volumes.

Question 5

A favorable material price variance occurs when:

Accepted Answer

Actual price paid is less than standard price

Answer

A favorable price variance results when the actual cost per unit of material is less than the standard cost.

B. Acy Bachelor of Accountancy Practice Test