Exam 2: Introduction to Cost Behavior and Cost-Volume Relationships

If the contribution?margin ratio is 0.30, targeted net income is $76,800, and targeted sales volume in dollars is $480,000, then total fixed costs are _____.

Income before income taxes = net income / marginal tax rate.

The income statement can be expressed as: Sales - Variable Expenses - Fixed Expenses = Net Income

The incremental approach means that a manager focuses on the effects of changes from the current condition.

An increase in total variable cost usually indicates _____.

Total contribution margin / total sales

Costs may behave in a linear and nonlinear way.

The level of sales at which the contribution margin equals the fixed cost

In highly leveraged companies, small changes in sales volume result in large changes in net income.

The _____ is the change in total results under a new condition, in comparison with some given or known condition.

Assume the following cost information for Janice Company: Selling price per unit \ 144 Variable costs per unit \ 80 Total fixed costs \ 80,000 Tax rate 40\% If fixed costs increased by 10% and management wanted to maintain the original break-even point, then the selling price per unit would have to be increased to _____.

If the sales price per unit is $34, the unit variable cost is $19, and the break?even point is 12,000 units, then the total fixed costs are _____.

If total fixed costs are $350,000, contribution margin per unit is $7.50, the tax rate is 30%, and the number of units to be sold is 100,000, then the after?tax net income will be _____.

The behavior of revenues and expenses on the CVP graph

Zachary Company wishes to earn after-tax net income of $18,000.Total fixed costs are $84,000, and the contribution margin per unit is $6.00.Zachary's tax rate is 40%.The number of units that must be sold to breakeven is _____.

Hot Company, a producer of salsa, has the following information: Income tax rate 30\% Selling price per unit \ 8.00 Variable cost per unit \ 3.00 Total fixed costs \ 90,000.00 The contribution margin per unit is _____.

Medina County Hospital has overall variable costs of 75% of total revenues and fixed costs of $40 million per year.There are 40,000 patient-days estimated for next year.The average daily revenue per patient necessary to breakeven is _____.

Assume the following cost information for Marie Company: Selling price per unit \ 144 Variable costs per unit \ 80 Total fixed costs \ 80,000 Tax rate 40\% _____ of sales dollars is required to earn an after?tax net income of $24,000.

Relevant range applies to _____.

Fixed costs _____.