Sean Sells Some Real Estate,conveying a Deed "To Jimmy Johnson,so

question 24

Multiple Choice

Sean sells some real estate,conveying a deed "to Jimmy Johnson,so long as the property is used as a working cattle ranch,and if not so used,the land returns to the grantor." This land is held in:

• A) fee simple absolute.
• B) fee simple defeasible.
• C) fee simple, subject to a remainder.
• D) life estate.
• E) fee simple per se.

Distinguish between direct manufacturing costs, conversion costs, and manufacturing overhead in cost accounting.

Calculate and understand the contribution margin and its significance in cost-volume-profit analysis.

Understand the calculation and components of prime costs.

Distinguish between fixed and variable costs and calculate total cost at different activity levels.

---

Definitions:

Absorption Costing

is an accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Unit Product Cost

The total cost incurred to produce, manufacture, or acquire a product, divided by the total number of units produced.

Absorption Costing

A financial recording approach that encompasses all production expenses, such as direct materials, direct labor, and overhead costs, within the price of a product.

Net Operating Income

Income from normal business operations after subtracting operating expenses but before interest and taxes.