FAC FAC Managerial Accounting & Cost Concepts 1

Question 1

What is the term for costs that change in total in direct proportion to changes in the level of production activity?

Accepted Answer

Variable costs

Answer

Variable costs change in total in direct proportion to changes in activity level, such as raw materials increasing as more units are produced.

Question 2

What is the break-even point in units when fixed costs are $50,000, selling price per unit is $25, and variable cost per unit is $15?

Accepted Answer

5,000 units

Answer

Break-even units = Fixed costs ÷ Contribution margin per unit = $50,000 ÷ ($25 − $15) = 5,000 units.

Question 3

Which of the following is a period cost rather than a product cost?

Accepted Answer

Selling expenses

Answer

Selling expenses are period costs expensed in the period incurred and are not included in the cost of inventory.

Question 4

What does the contribution margin ratio represent?

Accepted Answer

Contribution margin divided by sales

Answer

The contribution margin ratio equals contribution margin divided by sales revenue, showing the percentage of each dollar that covers fixed costs and profit.

Question 5

In job order costing, which document accumulates all costs assigned to a specific production job?

Accepted Answer

Job cost sheet

Answer

A job cost sheet tracks direct materials, direct labor, and applied manufacturing overhead for each individual job.

(FAC) Finance and Accounting Certification Practice Test

(FAC) Finance and Accounting Certification Practice Test

FAC FAC Managerial Accounting & Cost Concepts 1