CFM CFM Cost Accounting & Management 2

Question 1

What is the formula for the break-even point in units?

Accepted Answer

Fixed Costs / Contribution Margin per Unit

Answer

Break-even units = Fixed Costs / Contribution Margin per Unit, where contribution margin per unit = Selling Price - Variable Cost per Unit.

Question 2

Which cost is an example of a direct material cost in manufacturing?

Accepted Answer

Steel used to produce a car frame

Answer

Direct materials are raw materials that can be directly and specifically traced to the finished product, such as steel in automobile manufacturing.

Question 3

Under absorption costing (full costing), which of the following is included in product cost?

Accepted Answer

Fixed manufacturing overhead

Answer

Absorption costing includes all manufacturing costs — direct materials, direct labor, variable and fixed manufacturing overhead — in the product cost per unit.

Question 4

What distinguishes variable costing from absorption costing?

Accepted Answer

Variable costing treats fixed manufacturing overhead as a period cost, not a product cost

Answer

Variable (direct) costing expenses fixed manufacturing overhead immediately as a period cost, whereas absorption costing includes it in inventory until goods are sold.

Question 5

A manufacturer's direct labor efficiency variance is unfavorable when:

Accepted Answer

Workers used more hours than the standard hours allowed for actual production

Answer

The labor efficiency variance = (Actual Hours - Standard Hours) × Standard Rate; it is unfavorable when actual hours exceed the hours allowed for output produced.

CFM - Certified Finance Manager Practice Test

CFM - Certified Finance Manager Practice Test

CFM CFM Cost Accounting & Management 2