Acct 526 Study Guide Questions And Correct Answers

Costs are transferred from the balance sheet to the income statement as cost of goods sold when: {Ans: finished goods are sold}Super Tread Inc. is a large manufacturer of auto tires. Super Tread has provided the following information: Sales Revenue $55,000 Beginning Finished Goods Inventory 15,500 Cost of Goods Sold 37,500 Cost of Goods Manufactured 44,500 Calculate the amount of ending Finished Goods Inventory reported on Super Tread's balance sheet. {Ans: $22,500}Clear Springs Bottling Company produces a soft drink that is sold for a dollar. The company pays $400,000 in production costs, of which $260,000 are variable production costs. General, selling and administrative costs amount to $290,000 of which $90,000 are variable costs. Assuming production and sales of 800,000 units, what is the amount of contribution margin per unit? {Ans: 0.5625}The contribution margin per unit decreases when unit selling price remains the same and: {Ans: variable costs per unit increases}Costs that are matched with the revenue of a specific time period and charged to expense as incurred. {Ans: Period costs}CMA, Inc. produces a product that has a variable cost of $2.50 per unit. The company's fixed costs are $30,000. The product is sold for $5.00