Q. If a company has 100 units at $20 and 200 units at $25, and sells 150 units using FIFO, what is the cost of goods sold?
A.
$3,000
B.
$3,250
C.
$3,500
D.
$3,750
Show solution
Solution
Under FIFO, the cost of goods sold for the first 150 units sold is (100 * $20) + (50 * $25) = $2,000 + $1,250 = $3,250.
Correct Answer:
B
— $3,250
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Q. If a company has 100 units of inventory purchased at $10 each and 100 units purchased at $15 each, what is the cost of goods sold using LIFO if 150 units are sold?
A.
$1,500
B.
$1,750
C.
$1,600
D.
$1,650
Show solution
Solution
Using LIFO, the last 100 units sold are at $15 each and the next 50 units are at $10 each, resulting in a cost of goods sold of (100 * $15) + (50 * $10) = $1,750.
Correct Answer:
B
— $1,750
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Q. If a company has 100 units of inventory purchased at $10 each and 50 units purchased at $15 each, what is the value of inventory under FIFO if 75 units are sold?
A.
$1,000
B.
$1,125
C.
$1,250
D.
$1,500
Show solution
Solution
Under FIFO, the first 75 units sold would be from the first purchase, totaling $1,000 (100 units at $10) + $125 (25 units at $15).
Correct Answer:
B
— $1,125
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Q. If a company has a break-even point of 1,000 units and sells each unit for $50, what is the total revenue at the break-even point?
A.
$50,000
B.
$25,000
C.
$100,000
D.
$75,000
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Solution
Total revenue at the break-even point is calculated as Break-even Units (1,000) multiplied by Selling Price per Unit ($50), resulting in $50,000.
Correct Answer:
A
— $50,000
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Q. If a company has a budgeted contribution margin of $200,000 and an actual contribution margin of $180,000, what is the contribution margin variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$40,000 Favorable
D.
$40,000 Unfavorable
Show solution
Solution
Contribution Margin Variance = Actual Contribution Margin - Budgeted Contribution Margin = $180,000 - $200,000 = -$20,000 (Unfavorable)
Correct Answer:
B
— $20,000 Unfavorable
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Q. If a company has a budgeted cost of $100,000 and an actual cost of $90,000, what is the cost variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$90,000 Favorable
D.
$90,000 Unfavorable
Show solution
Solution
Cost Variance = Actual Cost - Budgeted Cost = $90,000 - $100,000 = $10,000 Favorable.
Correct Answer:
A
— $10,000 Favorable
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Q. If a company has a budgeted overhead of $100,000 and actual overhead of $120,000, what is the overhead variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$100,000 Favorable
D.
$100,000 Unfavorable
Show solution
Solution
Overhead variance = Actual Overhead - Budgeted Overhead = $120,000 - $100,000 = $20,000 Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If a company has a budgeted overhead of $60,000 and actual overhead of $70,000, what is the overhead variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$20,000 Favorable
D.
$20,000 Unfavorable
Show solution
Solution
Overhead variance = Actual Overhead - Budgeted Overhead = $70,000 - $60,000 = $10,000 Unfavorable.
Correct Answer:
B
— $10,000 Unfavorable
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Q. If a company has a budgeted production cost of $150,000 and actual production cost of $180,000, what is the cost variance?
A.
$30,000 Favorable
B.
$30,000 Unfavorable
C.
$20,000 Favorable
D.
$20,000 Unfavorable
Show solution
Solution
Cost Variance = Actual Cost - Budgeted Cost = $180,000 - $150,000 = $30,000 Unfavorable.
Correct Answer:
B
— $30,000 Unfavorable
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Q. If a company has a budgeted production cost of $150,000 and actual production cost of $160,000, what is the cost variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$5,000 Favorable
D.
$5,000 Unfavorable
Show solution
Solution
Cost Variance = Actual Cost - Budgeted Cost = $160,000 - $150,000 = $10,000 Unfavorable.
Correct Answer:
B
— $10,000 Unfavorable
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Q. If a company has a budgeted production of 1,000 units and actual production of 1,200 units, what is the variance in fixed overhead costs if the budgeted fixed overhead is $5,000?
A.
$0
B.
$500
C.
$1,000
D.
$1,200
Show solution
Solution
Fixed overhead costs remain the same regardless of production levels, so the variance is $0.
Correct Answer:
A
— $0
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Q. If a company has a budgeted production of 1,000 units and actual production of 1,200 units, what type of variance is this?
A.
Favorable Variance
B.
Unfavorable Variance
C.
Volume Variance
D.
Price Variance
Show solution
Solution
This is a volume variance as it reflects the difference between budgeted and actual production levels.
Correct Answer:
C
— Volume Variance
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Q. If a company has a budgeted profit of $100,000 and an actual profit of $80,000, what is the profit variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$30,000 Favorable
D.
$30,000 Unfavorable
Show solution
Solution
Profit variance = Actual Profit - Budgeted Profit = $80,000 - $100,000 = -$20,000, which is Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If a company has a budgeted profit of $100,000 and an actual profit of $90,000, what is the profit variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$20,000 Favorable
D.
$20,000 Unfavorable
Show solution
Solution
Profit variance = Actual Profit - Budgeted Profit = $90,000 - $100,000 = -$10,000, which is unfavorable.
Correct Answer:
B
— $10,000 Unfavorable
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Q. If a company has a budgeted profit of $30,000 and actual profit of $25,000, what is the profit variance?
A.
$5,000 Favorable
B.
$5,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Profit variance = Actual Profit - Budgeted Profit = $25,000 - $30,000 = -$5,000, which is unfavorable.
Correct Answer:
B
— $5,000 Unfavorable
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Q. If a company has a budgeted profit of $50,000 and actual profit of $45,000, what is the profit variance?
A.
$5,000 Favorable
B.
$5,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Profit Variance = Actual Profit - Budgeted Profit = $45,000 - $50,000 = -$5,000, which is Unfavorable.
Correct Answer:
B
— $5,000 Unfavorable
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Q. If a company has a budgeted profit of $50,000 and an actual profit of $30,000, what is the profit variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Profit variance = Actual Profit - Budgeted Profit = $30,000 - $50,000 = -$20,000, which is Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If a company has a budgeted profit of $50,000 and an actual profit of $40,000, what is the profit variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$20,000 Favorable
D.
$20,000 Unfavorable
Show solution
Solution
Profit Variance = Actual Profit - Budgeted Profit = $40,000 - $50,000 = -$10,000 (Unfavorable)
Correct Answer:
B
— $10,000 Unfavorable
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Q. If a company has a budgeted sales of $500,000 and actual sales of $450,000, what is the sales variance?
A.
$50,000 Favorable
B.
$50,000 Unfavorable
C.
$100,000 Favorable
D.
$100,000 Unfavorable
Show solution
Solution
Sales variance = Actual Sales - Budgeted Sales = $450,000 - $500,000 = -$50,000, which is Unfavorable.
Correct Answer:
B
— $50,000 Unfavorable
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Q. If a company has a budgeted sales revenue of $200,000 and actual sales revenue of $180,000, what is the sales variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Sales Variance = Actual Sales - Budgeted Sales = $180,000 - $200,000 = -$20,000, which is Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If a company has a budgeted sales volume of 1,000 units and a budgeted variable cost of $20 per unit, what is the total budgeted variable cost?
A.
$20,000
B.
$15,000
C.
$25,000
D.
$30,000
Show solution
Solution
Total budgeted variable cost = Budgeted sales volume * Budgeted variable cost per unit = 1,000 * $20 = $20,000.
Correct Answer:
A
— $20,000
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Q. If a company has a contribution margin of $15 per unit and sells 2,000 units, what is the total contribution?
A.
$30,000
B.
$15,000
C.
$45,000
D.
$60,000
Show solution
Solution
Total contribution = Contribution Margin * Quantity = $15 * 2,000 = $30,000.
Correct Answer:
A
— $30,000
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Q. If a company has a contribution margin of $15 per unit and sells 2,000 units, what is the total contribution margin?
A.
$30,000
B.
$25,000
C.
$20,000
D.
$15,000
Show solution
Solution
Total contribution margin = Contribution margin per unit * Number of units = $15 * 2,000 = $30,000
Correct Answer:
A
— $30,000
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Q. If a company has a contribution margin of $15,000 and fixed costs of $10,000, what is the net profit?
A.
$5,000
B.
$15,000
C.
$10,000
D.
$0
Show solution
Solution
Net Profit = Contribution Margin - Fixed Costs = $15,000 - $10,000 = $5,000.
Correct Answer:
A
— $5,000
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Q. If a company has a contribution margin of $200,000 and fixed costs of $150,000, what is the net profit?
A.
$50,000
B.
$200,000
C.
$150,000
D.
$350,000
Show solution
Solution
Net profit = Contribution Margin - Fixed Costs = 200000 - 150000 = $50,000.
Correct Answer:
A
— $50,000
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Q. If a company has a contribution margin of $25 per unit and sells 1,200 units, what is the total contribution?
A.
$30,000
B.
$25,000
C.
$20,000
D.
$15,000
Show solution
Solution
Total Contribution = Contribution Margin per Unit * Number of Units = $25 * 1,200 = $30,000.
Correct Answer:
A
— $30,000
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Q. If a company has a contribution margin of $30 and sells 1,000 units, what is the total contribution?
A.
$20,000
B.
$25,000
C.
$30,000
D.
$35,000
Show solution
Solution
Total Contribution = Contribution per unit * Number of units = $30 * 1,000 = $30,000.
Correct Answer:
C
— $30,000
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Q. If a company has a contribution margin of $30 per unit and fixed costs of $12,000, how many units must be sold to achieve a target profit of $3,000?
A.
500 units
B.
600 units
C.
400 units
D.
700 units
Show solution
Solution
Required Sales = (Fixed Costs + Target Profit) / Contribution Margin per Unit = ($12,000 + $3,000) / $30 = 500 units.
Correct Answer:
B
— 600 units
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Q. If a company has a contribution margin of $30 per unit and fixed costs of $150,000, how many units must be sold to break even?
A.
5,000 units
B.
4,000 units
C.
3,000 units
D.
6,000 units
Show solution
Solution
Break-even point in units = Fixed Costs / Contribution Margin per unit = $150,000 / $30 = 5,000 units.
Correct Answer:
A
— 5,000 units
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Q. If a company has a contribution margin of $30 per unit and fixed costs of $150,000, how many units must it sell to break even?
A.
5,000 units
B.
10,000 units
C.
15,000 units
D.
20,000 units
Show solution
Solution
Break-even point (units) = Fixed Costs / Contribution Margin = $150,000 / $30 = 5,000 units.
Correct Answer:
B
— 10,000 units
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