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The Coyote Cafe had sales revenues

Price: $6.99



1. (TCO 3) Managers are often required to make decisions about the future based on all the following except:
estimated information.
financial information.
cost information.
perfect information.

2. (TCO 3) Just-in-time (JIT) methods of production are designed to:
increase sales.
reduce operating expenses.
reduce inventories.
increase product quality.

3. (TCO 3) The Coyote Cafe had sales revenues and food costs in 2007 of $800,000 and $600,000, respectively. In 2008, Coyote will be introducing a new menu item that will generate $100,000 in sales revenues and $45,000 in food costs. Assuming no changes are expected for the other food items, the differential operating profit for 2008 is:
$55,000
$100,000.
$155,000.
$200,000.

4. (TCO 1) The terms direct cost and indirect cost are commonly used in accounting. A particular cost might be considered a direct cost of a manufacturing department, but an indirect cost of the product produced in the manufacturing department. Classifying a cost as either direct or indirect depends upon:

whether an expenditure is unavoidable because it cannot be changed, regardless of any action taken.
whether the cost is expensed in the period in which it is incurred.
the behavior of the cost in response to volume changes.
the cost object to which the cost is being related.

5. (TCO 1) Which of the following is NOT a product cost under full absorption costing?
Salaries of CEOs
Raw materials used in production
Supplies used in the factory
Direct labor

6. (TCO 1) Calculate the conversion costs from the following information:
Fixed manufacturing overhead $2,000
Variable manufacturing overhead 1,500
Direct materials 3,500
Direct labor 2,500

$2,500
$3,500
$6,000
$8,500

7. (TCO 1) The excess of sales over variable costs is termed:
the net income.
the contribution margin.
the operating profit.
the gross margin.

8. (TCO 6) Western Sales has the following information concerning its one and only product:
Selling price per unit: $40
Variable cost per unit: $15
Total fixed costs: $250,000

Compute the break-even point in sales dollars.
$250,000
$1,000,000
$400,000
$666,680

9. (TCO 6) The profit equation may be expressed as:
total revenues - total costs = operating profit.
total fixed costs - total variable costs = operating profit.
price x units of output = operating profit.
revenue - contribution margin = operating profit.

10. (TCO 6) Western Sales has the following information concerning its one and only product:
Selling price per unit: $40
Variable cost per unit: $15
Total fixed costs: $250,000

Compute the break-even point in units.
6,250 units
16,667 units
9,000 units
10,000 units

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