Do all companies evaluate the profitability of products and regions?

1 2

50%50%1. Yes

2. No

Is there a difference in how large and small companies evaluate the profitability of

products and regions?

1 2

50%50%1. Yes

2. No

Is there one universally accepted method for companies such as Adobe Systems, Inc. to evaluate

the income earned in the regions they serve?

1 2

50%50%1. Yes

2. No

Do you think that managing revenue and expenses within regions for Adobe Systems,

Inc. is difficult?

1 2

50%50%1. Yes

2. No

Do you think that the effective management of controlling costs, pricing products, planning production, analyzing

market segments, and analyzing contribution margins such as Adobe Systems, Inc. does, contributes to the success of

the company?

1 2

50%50%1. Yes

2. No

In variable costing, the cost of goods manufactured is composed of both variable

and fixed manufacturing costs.

1 2

50%50%1. True

2. False

When the number of units manufactured equals the number of units sold, income from operations under the variable

costing method and the absorption costing method will be the same.

1 2

50%50%1. True

2. False

Many accountants believe that variable costing should be used for evaluating operating performance because

it encourages management to produce inventory.

1 2

50%50%1. True

2. False

For a short-term analysis, management often evaluates market segment profitability

using variable costing.

1 2

50%50%1. True

2. False

Management should focus its sales efforts on those products that will provide the maximum total contribution margin.

1 2

50%50%1. True

2. False

Service firms will never use variable costing reports for contribution margin and segment

analyses.

1 2

50%50%1. True

2. False

Managers can plan and control operations by evaluating the differences between

planned and actual contribution margins.

1 2

50%50%

1. True

2. False

All manufacturing costs get included in finished goods and remain there until the goods are sold

under which of the following methods?

1 2 3 4

25% 25%25%25%1. Variable Costing

2. Absorption Costing

3. Direct Costing

4. Controllable Costing

Under the direct costing method, which of the following costs is not included in the cost

of goods manufactured?

1 2 3 4

25% 25%25%25%

1. Direct materials

2. Direct labor

3. Fixed factory overhead

4. Variable factory overhead

Manufacturing margin is computed by deducting which of the following from sales?

1 2 3 4

25% 25%25%25%1. Variable

administrative expenses

2. Variable selling expenses

3. Fixed cost of goods sold

4. Variable cost of goods sold

When the number of units manufactured exceeds the number of units sold, the variable costing income from

operations will be _____ the absorption costing income from operations.

1 2 3 4

25% 25%25%25%

1. less than

2. greater than

3. equal to

4. undeterminable compared to the absorption costing income from operations

Costs that are controlled by a different level of management from the department are

called

1 2 3 4

25% 25%25%25%

1. controllable costs

2. noncontrollable costs

3. fixed costs

4. variable costs

The selling price of a product should at least be equal to

1 2 3 4

25% 25%25%25%1. the variable costs of

making and selling it

2. the variable and fixed costs of making and selling it

3. marginal cost of making it

4. the planned contribution margin

The portion of a business that can be analyzed using sales, costs, and expenses

to determine its profitability is called a

1 2 3 4

25% 25%25%25%

1. price factor

2. quantity factor

3. sales mix

4. market segment

The relative distribution of sales among the various products sold is called

1 2 3 4

25% 25%25%25%

1. market segment

2. breakeven analysis

3. sales mix

4. absorption costing

In performing contribution margin analysis, the difference between the actual unit price and the planned unit price (cost) multiplied by the actual

quantity sold is the

1 2 3 4

25% 25%25%25%

1. unit price factor or unit cost factor

2. quantity factor

3. contribution margin

4. manufacturing margin

A service firm will report all of the following in its variable costing reports except

1 2 3 4

25% 25%25%25%

1. variable costs

2. manufacturing margin

3. fixed costs

4. contribution margin