operating leverage is 3. Warren’s earnings would go up (or down) by
________ as much as Miller’s with an equal increase (or decrease) in
sales. 2 times 4.5 times 1.5 times 1/2 times 7 What is the primary
difference between a static budget and a flexible budget? The static
budget contains only fixed costs, while the flexible budget contains
only variable costs. The static budget is prepared only for units
produced, while a flexible budget reflects the number of units sold.
The static budget is constructed using input from only upper level
management, while a flexible budget obtains input from all levels of
management. The static budget is prepared for a single level of
activity, while a flexible budget is adjusted for different activity
levels. 8 Ben Gordon, Inc. manufactures 2 products, wheels and seats.
The company has estimated its overhead in the assembling
department to be $660,000. The company produces 300,000 wheels
and 600,000 seats each year. Each wheel uses 2 parts, and each seat
uses 3 parts. How much of the assembly overhead should be allocated
to wheels? $165,000 $220,000 $264,000 $282,856 9 Financial and
managerial accounting are similar in that both: produce general-
purpose reports. deal with the economic events of an enterprise. have
reports that are prepared quarterly and annually. have the same
primary users. 10 It costs Garner Company $12 of variable and $5 of
fixed costs to produce one bathroom scale which normally sells for
$35. A foreign wholesaler offers to purchase 3,000 scales at $15 each.
Garner would incur special shipping costs of $1 per scale if the order
were accepted. Garner has sufficient unused capacity to produce the
3,000 scales. If the special order is accepted, what will be the effect
on net income? $6,000 decrease $9,000 decrease $6,000 increase
$45,000 increase 11 Which one of the following is an example of a
period cost? A manager’s salary for work that is done in the corporate
head office. A box cost associated with computers. A change in
benefits for the union workers who work in the New York plant of a
Fortune 1000 manufacturer. Workers’ compensation insurance on
factory workers’ wages allocated to the factory. 12 The Mac