IMA Shop Ltd produces three products. Cost, price, and volume data is shown below. The weighted average contribution margin per unit for chocolate ice cream, rounded to the nearest cent, is: * Total Fixed Costs: $2,400 * Tax Rate: 30% \[\begin{array} { | l | l | l | l | } \hline & \begin{array} { l } \text { Chacalate Ice } \\ \text { Cream } \end{array} & \text { Milkshake } & \text { Burger } \\ \hline \text { Narmal Valume } & 300 & 150 & 200 \\ \hline \text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \\ \hline \text { Variable cast per unit } & \$ 2 & \$ 3 & \$ 4 \\ \hline \end{array}\]

A) $3.00 B) $0.92 C) $4.15 D) $1.39 A) $3.00 B) $0.92 C) $4.15 D) $1.39

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% \[\begin{array} { | l | l | l | l | } \hline & \text { Chacolate Ice Creamn } & \text { Milkthale } & \text { Furger } \\ \hline \text { Narmal Valume } & 300 & 150 & 200 \\ \hline \text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \\ \hline \text { Var iable cast per unit } & \$ 2 & \$ 3 & \$ 4 \\ \hline \end{array}\] The weighted average contribution margin, rounded to the nearest whole dollar, is

A) $13 B) $4.16 C) $1.85 D) $4.33 A) $13 B) $4.16 C) $1.85 D) $4.33

Ichi Corp. produces a single product and projects the following costs for a normal month in which 50 units are produced and sold: \[\begin{array} { l c c } & \text { Manufacturing } & \text { Nonmanufacturing } \\ \cline { 2 - 3 } \text { Fixed costs } & \$ 8,000 & \$ 5,000 \\ \text { Total variable costs } & 7,700 & 6,050 \end{array}\] The selling price per unit is $400. What volume, in units, must Ichi sell to break even?

A) 40 B) 104 C) 53 D) 90 A) 40 B) 104 C) 53 D) 90

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% \[\begin{array} { | l | l | l | l | } \hline & \text { Chacolate Ice Creamn } & \text { Milkthale } & \text { Furger } \\ \hline \text { Narmal Valume } & 300 & 150 & 200 \\ \hline \text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \\ \hline \text { Var iable cast per unit } & \$ 2 & \$ 3 & \$ 4 \\ \hline \end{array}\] When using revenues as the measure, what proportion of the sales mix do chocolate ice creams represent? Round to the nearest whole percent.

A) 33% B) 44% C) 67% D) 23% A) 33% B) 44% C) 67% D) 23%

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% \[\begin{array} { | l | l | l | l | } \hline & \text { Chacolate Ice Creamn } & \text { Milkthale } & \text { Furger } \\ \hline \text { Narmal Valume } & 300 & 150 & 200 \\ \hline \text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \\ \hline \text { Var iable cast per unit } & \$ 2 & \$ 3 & \$ 4 \\ \hline \end{array}\] When using units as the measure, what proportion of the sales mix do milkshakes represent? Round to the nearest whole percent.

A) 23% B) 46% C) 31% D) Cannot be determined. A) 23% B) 46% C) 31% D) Cannot be determined.

Toucan Ltd sells three products and incurs $36,000 per period in fixed costs. The three products have the following characteristics: $\begin{array}{llcc} \underline{\text { Product }} & \underline{\text { Price} } & \underline{\text {Variable Cost } } &\underline{\text { Sales Mix }}\\ \text { P }&\$40& \$20&3 \text { units }\\ \text { Q }&20& 10&9\text { units }\\ \text { R }&49& 24&12 \text { units }\\ \end{array}$ How many units of Product P will be sold at the breakeven point?

A) 240 B) 960 C) 120 D) 96 A) 240 B) 960 C) 120 D) 96

Exam 4: Costvolumeprofit Cvp Analysis

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below. The weighted average contribution margin per unit for chocolate ice cream, rounded to the nearest cent, is: * Total Fixed Costs: $2,400 * Tax Rate: 30% Chacalate Ice Cream Milkshake Burger Narmal Valume 300 150 200 Price per unit \ 5 \ 7 \ 10 Variable cast per unit \ 2 \ 3 \ 4

(Multiple Choice)

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Question 21

The assumption of cost function linearity means: I Fixed costs remain fixed. II Sales mix remains constant. III The fixed cost per unit remains constant.

(Multiple Choice)

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Question 22

The margin of safety is:

(Multiple Choice)

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Question 23

Alpha New Ltd. has a contribution margin ratio of 30% and a breakeven point of $200,000 in sales. If the firm reports net profit of $50,000 after taxes of 50%, what were total sales for the year?

(Multiple Choice)

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Question 24

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% Chacolate Ice Creamn Milkthale Furger Narmal Valume 300 150 200 Price per unit \ 5 \ 7 \ 10 Var iable cast per unit \ 2 \ 3 \ 4 The weighted average contribution margin, rounded to the nearest whole dollar, is

(Multiple Choice)

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Question 25

Ichi Corp. produces a single product and projects the following costs for a normal month in which 50 units are produced and sold: Manufacturing Nonmanufacturing \cline 2-3 Fixed costs \ 8,000 \ 5,000 Total variable costs 7,700 6,050 The selling price per unit is $400. What volume, in units, must Ichi sell to break even?

(Multiple Choice)

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Question 26

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% Chacolate Ice Creamn Milkthale Furger Narmal Valume 300 150 200 Price per unit \ 5 \ 7 \ 10 Var iable cast per unit \ 2 \ 3 \ 4 When using revenues as the measure, what proportion of the sales mix do chocolate ice creams represent? Round to the nearest whole percent.

(Multiple Choice)

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Question 27

Penco Industries has a small margin of safety % and a high degree of operating leverage; this means it is likely that Penco has a high reliance on fixed costs.

(True/False)

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Question 28

Contribution margin provides an indication of how much revenue from each unit sold can be applied towards fixed costs.

(True/False)

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Question 29

How many units in total must be sold to earn the target profit?

(Multiple Choice)

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Question 30

Managers should always minimize the fixed costs in their organisation as fixed costs are incurred regardless of sales volume.

(True/False)

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Question 31

IMA Shop Ltd produces three products. Cost, price, and volume data is shown below: * Total Fixed Costs: $2,400 * Tax Rate: 30% Chacolate Ice Creamn Milkthale Furger Narmal Valume 300 150 200 Price per unit \ 5 \ 7 \ 10 Var iable cast per unit \ 2 \ 3 \ 4 When using units as the measure, what proportion of the sales mix do milkshakes represent? Round to the nearest whole percent.

(Multiple Choice)

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Question 32

Data extracted from the accounting information system of NYX Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The dotted line represents:

(Multiple Choice)

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Question 33

The point of indifference is the level of activity at which equal cost or profit occurs across multiple alternatives.

(True/False)

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Question 34

Toucan Ltd sells three products and incurs $36,000 per period in fixed costs. The three products have the following characteristics: P \4 0 \2 0 3 units Q 20 10 9 units R 49 24 12 units How many units of Product P will be sold at the breakeven point?

(Multiple Choice)

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Question 35

Due to the number of assumptions and limitations that CVP analysis is subject to, care should be taken when interpreting the results.

(True/False)

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Question 36

The breakeven point for a wholesaler will decrease if:

(Multiple Choice)

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Question 37

The cost function for Kat's Cosmetics is: TC = $800 + 0.375 × Revenue. If Kat expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?

(Multiple Choice)

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Question 38

The breakeven point for a retailer will increase if:

(Multiple Choice)

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Question 39

CVP analysis for organisations with multiple products should always been performed using per unit information.

(True/False)

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Question 40

The assumption of cost function linearity means: I Fixed costs remain fixed. II Sales mix remains constant. III The fixed cost per unit remains constant.

The margin of safety is:

Alpha New Ltd. has a contribution margin ratio of 30% and a breakeven point of $200,000 in sales. If the firm reports net profit of $50,000 after taxes of 50%, what were total sales for the year?

Penco Industries has a small margin of safety % and a high degree of operating leverage; this means it is likely that Penco has a high reliance on fixed costs.

Contribution margin provides an indication of how much revenue from each unit sold can be applied towards fixed costs.

How many units in total must be sold to earn the target profit?

Managers should always minimize the fixed costs in their organisation as fixed costs are incurred regardless of sales volume.

Data extracted from the accounting information system of NYX Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The dotted line represents:

The point of indifference is the level of activity at which equal cost or profit occurs across multiple alternatives.

Toucan Ltd sells three products and incurs $36,000 per period in fixed costs. The three products have the following characteristics: P \4 0 \2 0 3 units Q 20 10 9 units R 49 24 12 units How many units of Product P will be sold at the breakeven point?

Due to the number of assumptions and limitations that CVP analysis is subject to, care should be taken when interpreting the results.

The breakeven point for a wholesaler will decrease if:

The cost function for Kat's Cosmetics is: TC = $800 + 0.375 × Revenue. If Kat expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?

The breakeven point for a retailer will increase if:

CVP analysis for organisations with multiple products should always been performed using per unit information.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

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