Management Accounting - Study Mode

[#391] executive salaries, rent and other general administration cost in corporate costs are classified under
Correct Answer

(B) corporate administration costs

Explanation

Solution: Executive salaries, rent and other general administration cost in corporate costs are classified under corporate administration costs. Administrative expenses are costs related to the general administration of the business. This category of costs does not relate specifically to any business function such as production and sales. These costs are incurred at the corporate level, rather than by individual departments or business units.

[#392] If gross margin is $6000 and total revenue is $26000, then gross margin percentage will be
Correct Answer

(A) 23.08%

Explanation

Solution: Gross margin percentage = Gross margin ÷ Total revenue × 100 = $6000 ÷ $26000 = 23.08%

[#393] Fixed cost, and contribution margin percentage for bundle are divided to calculate
Correct Answer

(B) breakeven revenues

Explanation

Solution: Fixed cost, and contribution margin percentage for bundle are divided to calculate breakeven revenues. Break-even analysis entails the calculation and examination of the margin of safety for an entity based on the revenues collected and associated costs. Analyzing different price levels relating to various levels of demand a business uses break-even analysis to determine what level of sales are necessary to cover the company's total fixed costs.

[#394] Revenue is $11000 and all variable cost is $6000, then contribution margin would be
Correct Answer

(C) $5,000

Explanation

Solution: Contribution margin = Revenue - Variable cost = $11000 - $6000 = $5,000.

[#395] If contribution margin of bundle is $4000 and revenue of bundle is $16000, then contribution margin percentage for bundle will be
Correct Answer

(C) 25.00%

Explanation

Solution: Contribution margin percentage = Contribution margin ÷ Revenue × 100 = $4000 ÷ $16000 × 100 = 25.00%.