Question 1

A segment of a business reported a contribution margin of $33,000 and controllable fixed costs of
$14,000. If the segment is eliminated, the company-wide net income would be

Accepted Answer

A)  $14,000 higher.
B)  $33,000 lower
C)  $19,000 lower.
D)  $19,000 higher.E) B) and D)
F) None of the above

Question 2

Direct costing is the process of tracing only direct material and direct labor costs through the factory cost centers and into the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 3

Generally Accepted Accounting Principles require the use of direct costing for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 4

Direct costing is extremely useful in setting prices of products in special-order situations.

Accepted Answer

A) True 
 B)False

Question 5

A segment of a business should probably be discontinued if

Accepted Answer

A)  its common costs exceed its contribution margin.
B)  its contribution margin exceeds its controllable fixed costs and its common costs.
C)  it has a net loss.
D)  cannot produce a positive contribution margin.E) A) and D)
F) A) and C)

Question 6

Opportunity costs are calculated as the difference between two alternatives.

Accepted Answer

A) True 
 B)False

Exam 30: Cost-Revenue Analysis for Decision Making

Generally Accepted Accounting Principles require the use of direct costing for financial reporting purposes.

Correct Answer
verified

A segment of a business should probably be discontinued if

Correct Answer
verified

Opportunity costs are calculated as the difference between two alternatives.

Correct Answer
verified

A segment of a business reported a contribution margin of $33,000 and controllable fixed costs of $14,000. If the segment is eliminated, the company-wide net income would be

Correct Answer
verified

Direct costing is the process of tracing only direct material and direct labor costs through the factory cost centers and into the cost of goods sold.

Correct Answer
verified

Direct costing is extremely useful in setting prices of products in special-order situations.

Correct Answer
verified

Exam 30: Cost-Revenue Analysis for Decision Making

Generally Accepted Accounting Principles require the use of direct costing for financial reporting purposes.

Correct AnswerverifiedShow Answer

A segment of a business should probably be discontinued if

Correct AnswerverifiedShow Answer

Opportunity costs are calculated as the difference between two alternatives.

Correct AnswerverifiedShow Answer

A segment of a business reported a contribution margin of $33,000 and controllable fixed costs of $14,000. If the segment is eliminated, the company-wide net income would be

Correct AnswerverifiedShow Answer

Direct costing is the process of tracing only direct material and direct labor costs through the factory cost centers and into the cost of goods sold.

Correct AnswerverifiedShow Answer

Direct costing is extremely useful in setting prices of products in special-order situations.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified