The DesMaris Company had the following income statement for the month of November 2018: $\begin{array}{c} \text { DesMaris Company}\\ \text { Income Statement}\\ \text { For the Month of November 2018}\\ \begin{array}{llcc} \text { Sales \( (\$ 60 \times 10,000) $} &&\$600,000\\ \text { Cost of goods sold: }\\ \text { Direct material $ \mathrm{s}(\$ 12 \times 10,000) $} &\$120,000\\ \text {Direct labor $ (\$ 9 \times 10,000) $ } &\$90,000\\ \text { Variable factory overhead $ (\$ 7.50 \times 10,000) $ } &75,000\\ \text {Fixed factory overhead } &120,000&405,000\\ \text { Gross profit } &&\$195,000\\ \text { Selling and administrative expenses: } &&\$195,000\\ \text { Variable $ (\$ 1.50 \times 10,000) $ } &\$15,000\\ \text {Fixed } & \underline{90,000}& \underline{105,000}\\ \text {Operating income } && \underline{\$90,000}\\ \end{array} \end{array}\) If the monthly sales volume increases by 450 units, DesMaris Company's monthly profits will increase by

A) $13,500.00. B) $1,282.50. C) $9,450.00. D) $14,175.00. A) $13,500.00. B) $1,282.50. C) $9,450.00. D) $14,175.00.

The Cumberland Company provides the following information: $\begin{array} { l } \text {Sales (250,000 units) }&\$625,000\\ \text {Manufacturing costs: }&\\ \text {Variable }&212,500\\ \text { Fixed}&37,500\\ \text {Selling and administrative costs: }&\\ \text {Variable }&100,000\\ \text { Fixed}&25,000\\ \end{array}$ What is the break-even point in units for Cumberland?

A) 41,668 units B) 50,000 units C) 125,000 units D) 250,000 units A) 41,668 units B) 50,000 units C) 125,000 units D) 250,000 units

Fantasmas Incorporated had the following information: $\begin{array}{lrr} \text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\ \text { Units sold } & \$ 20&-- \\ \text { Setups } & 1,200 &60\\ \text { Engineering hours } & 52&1,500\\\\ \text { Other data: }\\ \text { Total fixed costs (traditional) } & \$ 600,000 \\ \text { Total fixed costs }(A B C) & \$ 360,000 \\ \text { Unit selling price } & \$60 \end{array}$ How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

A) 8,350 units B) 12,800 units C) 15,580 units D) 14,750 units A) 8,350 units B) 12,800 units C) 15,580 units D) 14,750 units

Summersville Production Company had the following projected information for the current year: \[\begin{array} { l l r } \text { Selling price per unit } & \$ 150 \\ \text { Variable cost per unit } & \$ 90 \\ \text { Total fixed costs } & \$ 300,000 \end{array}\] What is the profit when one unit more than the break-even point is sold?

A) $60 B) $150 C) $1,500,150 D) $600,060 A) $60 B) $150 C) $1,500,150 D) $600,060

The DesMaris Company had the following income statement for the month of November 2018: $\begin{array}{c} \text { DesMaris Company}\\ \text { Income Statement}\\ \text { For the Month of November 2018}\\ \begin{array}{llcc} \text { Sales \( (\$ 60 \times 10,000) $} &&\$600,000\\ \text { Cost of goods sold: }\\ \text { Direct material $ \mathrm{s}(\$ 12 \times 10,000) $} &\$120,000\\ \text {Direct labor $ (\$ 9 \times 10,000) $ } &\$90,000\\ \text { Variable factory overhead $ (\$ 7.50 \times 10,000) $ } &75,000\\ \text {Fixed factory overhead } &120,000&405,000\\ \text { Gross profit } &&\$195,000\\ \text { Selling and administrative expenses: } &&\$195,000\\ \text { Variable $ (\$ 1.50 \times 10,000) $ } &\$15,000\\ \text {Fixed } & \underline{90,000}& \underline{105,000}\\ \text {Operating income } && \underline{\$90,000}\\ \end{array} \end{array}\) DesMaris Company's break-even sales volume is

A) 7,000 units. B) 20,000 units. C) 11,211 units. D) 10,000 units. A) 7,000 units. B) 20,000 units. C) 11,211 units. D) 10,000 units.

The Cumberland Company provides the following information: $\begin{array} { l } \text {Sales (250,000 units) }&\$625,000\\ \text {Manufacturing costs: }&\\ \text {Variable }&212,500\\ \text { Fixed}&37,500\\ \text {Selling and administrative costs: }&\\ \text {Variable }&100,000\\ \text { Fixed}&25,000\\ \end{array}$ What is the break-even point in sales dollars for Cumberland?

A) $125,000 B) $100,000 C) $37,500 D) $300,000 A) $125,000 B) $100,000 C) $37,500 D) $300,000

Jamie Quinn, a sole proprietor, has the following projected figures for next year: $\begin{array} { l } \text { Selling price per unit}&\$150.00\\ \text { Contribution margin per unit}&\$45.00\\ \text {Total fixed costs }&\$630,000\\ \end{array}$ What is the contribution margin ratio?

A) 0.300 B) 1.429 C) 0.429 D) 3.333 A) 0.300 B) 1.429 C) 0.429 D) 3.333

Exam 16: Cost-Volume-Profit Analysis

The DesMaris Company had the following income statement for the month of November 2018: DesMaris Company Income Statement For the Month of November 2018 Sales (\ 60 \times 10,000) \6 00,000 Cost of goods sold: Direct material (\ 12\times10,000) \1 20,000 Direct labor (\ 9\times10,000) \9 0,000 Variable factory overhead (\ 7.50\times10,000) 75,000 Fixed factory overhead 120,000 405,000 Gross profit \1 95,000 Selling and administrative expenses: \1 95,000 Variable (\ 1.50\times10,000) \1 5,000 Fixed Operating income If the monthly sales volume increases by 450 units, DesMaris Company's monthly profits will increase by

(Multiple Choice)

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Question 21

In a cost-volume-profit graph, the total revenue line rises with a slope equal to

(Multiple Choice)

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Question 22

The Cumberland Company provides the following information: Sales (250,000 units) \6 25,000 Manufacturing costs: Variable 212,500 Fixed 37,500 Selling and administrative costs: Variable 100,000 Fixed 25,000 What is the break-even point in units for Cumberland?

(Multiple Choice)

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Question 23

Which of the following formulas is used to calculate break-even point in units?

(Multiple Choice)

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Question 24

In 2018, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Samantha's to have a before-tax income of $18,000 is

(Multiple Choice)

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Question 25

The break-even point is the point where total costs equal sales revenues.

(True/False)

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Question 26

The __________ is where total revenues equal total costs.

(Short Answer)

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Question 27

Which of the following is true of a profit-volume graph?

(Multiple Choice)

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Question 28

Fantasmas Incorporated had the following information: Activity Driver Unit Variable Cost Level of Activity Drive Units sold \ 20 -- Setups 1,200 60 Engineering hours 52 1,500 Other data: Total fixed costs (traditional) \ 600,000 Total fixed costs (ABC) \ 360,000 Unit selling price \6 0 How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

(Multiple Choice)

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Question 29

The income statement for Symbiosis Manufacturing Company for 2018 is as follows: $\begin{array}{lr}\text { Sales }(10,000 \text { units) } & \$ 120,000 \\\text { Variable expenses } & 72,000\\\text { Contribution margin } & \$ 48,000 \\\text { Fixed expenses } & {36,000} \\\text { Operating income } & \${12,000}\end{array}$ What is the contribution margin ratio?

(Multiple Choice)

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Question 30

Which of the following statements is TRUE in a cost-volume-profit graph?

(Multiple Choice)

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Question 31

Assuming all other things are the same, if there was an increase in the break-even point variable cost per unit must have:

(Multiple Choice)

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Question 32

A decrease in the sales price in the basic cost-volume-profit model would

(Multiple Choice)

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Question 33

Summersville Production Company had the following projected information for the current year: Selling price per unit \ 150 Variable cost per unit \ 90 Total fixed costs \ 300,000 What is the profit when one unit more than the break-even point is sold?

(Multiple Choice)

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Question 34

Which of the following assumptions does NOT pertain to cost-profit-volume analysis?

(Multiple Choice)

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Question 35

The DesMaris Company had the following income statement for the month of November 2018: DesMaris Company Income Statement For the Month of November 2018 Sales (\ 60 \times 10,000) \6 00,000 Cost of goods sold: Direct material (\ 12\times10,000) \1 20,000 Direct labor (\ 9\times10,000) \9 0,000 Variable factory overhead (\ 7.50\times10,000) 75,000 Fixed factory overhead 120,000 405,000 Gross profit \1 95,000 Selling and administrative expenses: \1 95,000 Variable (\ 1.50\times10,000) \1 5,000 Fixed Operating income DesMaris Company's break-even sales volume is

(Multiple Choice)

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Question 36

The Cumberland Company provides the following information: Sales (250,000 units) \6 25,000 Manufacturing costs: Variable 212,500 Fixed 37,500 Selling and administrative costs: Variable 100,000 Fixed 25,000 What is the break-even point in sales dollars for Cumberland?

(Multiple Choice)

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Question 37

The __________ ratio expresses variable costs in terms of sales dollars.

(Short Answer)

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Question 38

Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit \1 50.00 Contribution margin per unit \4 5.00 Total fixed costs \6 30,000 What is the contribution margin ratio?

(Multiple Choice)

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Question 39

The following diagram is a cost-volume-profit graph for a manufacturing company: The formula to determine the Y-axis value ($) at point D on the graph is

(Multiple Choice)

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Question 40

In a cost-volume-profit graph, the total revenue line rises with a slope equal to

The Cumberland Company provides the following information: Sales (250,000 units) \6 25,000 Manufacturing costs: Variable 212,500 Fixed 37,500 Selling and administrative costs: Variable 100,000 Fixed 25,000 What is the break-even point in units for Cumberland?

Which of the following formulas is used to calculate break-even point in units?

In 2018, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Samantha's to have a before-tax income of $18,000 is

The break-even point is the point where total costs equal sales revenues.

The __________ is where total revenues equal total costs.

Which of the following is true of a profit-volume graph?

Which of the following statements is TRUE in a cost-volume-profit graph?

Assuming all other things are the same, if there was an increase in the break-even point variable cost per unit must have:

A decrease in the sales price in the basic cost-volume-profit model would

Summersville Production Company had the following projected information for the current year: Selling price per unit \ 150 Variable cost per unit \ 90 Total fixed costs \ 300,000 What is the profit when one unit more than the break-even point is sold?

Which of the following assumptions does NOT pertain to cost-profit-volume analysis?

The Cumberland Company provides the following information: Sales (250,000 units) \6 25,000 Manufacturing costs: Variable 212,500 Fixed 37,500 Selling and administrative costs: Variable 100,000 Fixed 25,000 What is the break-even point in sales dollars for Cumberland?

The __________ ratio expresses variable costs in terms of sales dollars.

Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit \1 50.00 Contribution margin per unit \4 5.00 Total fixed costs \6 30,000 What is the contribution margin ratio?

The following diagram is a cost-volume-profit graph for a manufacturing company: The formula to determine the Y-axis value ($) at point D on the graph is

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

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