The Accrual Basis Of Cost Volume Profit Analysis
Objective: Evaluate financial statements of nongovernment organizations.
6. The accrual basis of accounting recognizes transactions’ effects on financial statements in the period when _____. a. revenues are earned and expenses are incurred b. cash is received or disbursed c. the transaction occurs d. the accounting equation is decreased
Objective: Recognize the major aspects of the regulatory environment.
7. Limited liability means that _____. a. the corporation’s creditors have claims on only the assets of the corporation and not on the assets of the owners of the corporation b. the creditors of a corporation can receive only up to, and no more than, the amount due to them c. the company is required to pay only current liabilities in the current year and has no obligation to pay long-term liabilities in the current year d. corporations can have liabilities up to only a certain amount due to limits on the company's borrowing capability
Week Two: Apply Financial Information
Objective: Evaluate the financial condition of a …show more content…
19. Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows:
Direct materials: $195 Direct labor: $126 Variable factory overhead: $51
Total fixed costs for the period are $456,840. The contribution margin per desk is _____. a. $195 b. $108 c. $51 d. $126
Objective: Explain the components of cost–volume–profit analysis.
20. If the sales price per unit is $100, the total fixed costs are $75,000, and the break-even volume in dollar sales is $250,000, the variable cost per unit is _____. a. $70 b. $100 c. $75,000 d. $30
Objective: Use cost–volume–profit analysis and break-even analysis to make business decisions.
21. Hug Me Company produces dolls. Each doll sells for $20. Variable costs per unit total $14, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break-even volume in dollars is _____. a. $1,450,000 b. $1,023,529 c. $621,429 d. $435,000
Objective: Use cost–volume–profit analysis and break-even analysis to make business