Exam 21: Cost-Volume-Profit Analysis

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the contribution margin ratio.

(Multiple Choice)

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Question 21

Madison Corporation sells three products (M,N,and O)in the following mix: 3:1:2.Unit price and cost data are: Total fixed costs are $340,000.The break-even point in sales dollars for the current sales mix is (round to the nearest thousand):

(Multiple Choice)

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Question 22

One aid in measuring cost behavior involves creating a display of the data about past costs in graphical form.Such a visual display is called a ______________________.

(Essay)

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Question 23

The difference between the unit sales price and the unit variable cost of an item is defined as the _________________________.

(Essay)

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Question 24

Dividing a mixed cost into its separate fixed and variable cost components makes it more difficult to perform cost-volume-profit analysis.

(True/False)

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Question 25

A firm sells two products,Regular and Ultra.For every unit of Regular the firm sells,two units of Ultra are sold.The firm's total fixed costs are $1,612,000.Selling prices and cost information for both products follow.The contribution margin per composite unit is:

(Multiple Choice)

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Question 26

A visual line fit to points in a scatter diagram may be used to identify the approximate relation between past cost and unit data.

(True/False)

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Question 27

There are only two methods to derive an estimated line of cost behavior;the high-low method and the scatter diagram.

(True/False)

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Question 28

During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

(Multiple Choice)

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Question 29

Cost-volume-profit analysis is used to predict future costs to be incurred,volumes of activity,sales to be made,and profit to be earned.

(True/False)

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Question 30

A firm expects to sell 25,000 units of its product at $11 per unit.Pretax income is predicted to be $60,000.If the variable costs per unit are $5,total fixed costs must be:

(Multiple Choice)

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Question 31

The high-low method of deriving an estimated cost line uses all the data points available.

(True/False)

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Question 32

Least-squares regression is a statistical method for identifying cost behavior.

(True/False)

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Question 33

A cost that includes both fixed and variable cost components is called a:

(Multiple Choice)

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Question 34

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Flannigan Company management targets an annual pre-tax income of $1,125,000.Compute the dollar sales to earn the target pre-tax net income.

(Multiple Choice)

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Question 35

A company manufactures and sells a product for $120 per unit.The company's fixed costs are $68,760,and its variable costs are $90 per unit.The company's break-even point in dollars is:

(Multiple Choice)

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Question 36

If a firm's forecasted sales are $250,000 and its break-even sales are $190,000,the margin of safety in dollars is:

(Multiple Choice)

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Question 37

A graphic presentation of cost-volume-profit data is known as a ____ graph (or chart);this presentation is also sometimes called a chart. Answers must appear in this order.

(Essay)

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Question 38

Cost-volume-profit analysis cannot be used when a firm produces and sells more than one product.

(True/False)

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Question 39

There are at least three different methods to separate costs into fixed and variable.These methods are the _______,_,and _________ methods. Answers must appear in this order.

(Essay)

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Question 40

Showing 21 - 40 of 167

Exam 21: Cost-Volume-Profit Analysis

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the contribution margin ratio.

Madison Corporation sells three products (M,N,and O)in the following mix: 3:1:2.Unit price and cost data are: Total fixed costs are $340,000.The break-even point in sales dollars for the current sales mix is (round to the nearest thousand):

One aid in measuring cost behavior involves creating a display of the data about past costs in graphical form.Such a visual display is called a ______________________.

The difference between the unit sales price and the unit variable cost of an item is defined as the _________________________.

Dividing a mixed cost into its separate fixed and variable cost components makes it more difficult to perform cost-volume-profit analysis.

A firm sells two products,Regular and Ultra.For every unit of Regular the firm sells,two units of Ultra are sold.The firm's total fixed costs are $1,612,000.Selling prices and cost information for both products follow.The contribution margin per composite unit is:

A visual line fit to points in a scatter diagram may be used to identify the approximate relation between past cost and unit data.

There are only two methods to derive an estimated line of cost behavior;the high-low method and the scatter diagram.

During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

Cost-volume-profit analysis is used to predict future costs to be incurred,volumes of activity,sales to be made,and profit to be earned.

A firm expects to sell 25,000 units of its product at $11 per unit.Pretax income is predicted to be $60,000.If the variable costs per unit are $5,total fixed costs must be:

The high-low method of deriving an estimated cost line uses all the data points available.

Least-squares regression is a statistical method for identifying cost behavior.

A cost that includes both fixed and variable cost components is called a:

A company manufactures and sells a product for $120 per unit.The company's fixed costs are $68,760,and its variable costs are $90 per unit.The company's break-even point in dollars is:

If a firm's forecasted sales are $250,000 and its break-even sales are $190,000,the margin of safety in dollars is:

A graphic presentation of cost-volume-profit data is known as a __________________ graph (or chart);this presentation is also sometimes called a ______________ chart. Answers must appear in this order.

Cost-volume-profit analysis cannot be used when a firm produces and sells more than one product.

There are at least three different methods to separate costs into fixed and variable.These methods are the _______________,_______________,and _______________ methods. Answers must appear in this order.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

A graphic presentation of cost-volume-profit data is known as a ____ graph (or chart);this presentation is also sometimes called a chart. Answers must appear in this order.

There are at least three different methods to separate costs into fixed and variable.These methods are the _______,_,and _________ methods. Answers must appear in this order.