Exam 16: Cost-Volume-Profit Analysis

The following data pertain to the three products produced by Beta Corporation: A B C Selling price per unit \ 6.00 \ 8.00 \ 9.00 Variable costs per unit 4.00 4.00 4.00 Contribution margin per unit \ 2.00 \ 4.00 \ 5.00 Fixed costs are $77,000 per month. Twenty percent of all units sold are Product A, fifty-five percent are Product B, and twenty-five percent are Product C. What is the monthly break-even point for total units?

The following diagram is a cost-volume-profit graph for a manufacturing company: The difference between line AB and line AC (area BAC) is the

Nonesuch Company sells only one product at a regular price of $7.50 per unit. Variable expenses are 60 percent of sales and fixed expenses are $30,000. Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales. What is the sales dollars level required to break even at the old price of $7.50?

Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 45 percent and total fixed costs of $6,875. What is the break-even point in units for Biscuit Company?

Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 55 percent and total fixed costs of $6,875. How many units must be sold in order to obtain a before-tax profit of $12,000?

Increases in sales of low contribution margin products decrease the break-even point.

When a company sells more units than the break-even point, the __________ are positive.

On a profit-volume graph, the profit line intersects the horizontal axis at

The Mildmanner Corporation has the following data for 2018: Selling price per unit \1 5 Variable cost per unit \ 9 Fixed costs \ 45,000 Units sold 10,000 units The margin of safety in units will be (round to the nearest whole unit)

Sales × Contribution Margin is a short-cut of what formula?

The contribution margin at the break-even point

Bronze Company had the following information: Activity Driver Unit Variable Cost Level of Activity Drive Units sold \ 30 -- Setups 1,200 60 Engineering hours 40 1,000 Other data: Total fixed costs (traditional) \ 500,000 Total fixed costs (ABC) \ 200,000 Unit selling price \5 0 What is the break-even point in units using activity-based costing (ABC)?

In multiple-product analysis, direct fixed costs are

Target after-tax profit must be converted into __________ profit to calculate units or revenue needed.

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 selling price per unit is needed to obtain a before-tax profit of $270,000 at a volume of 4,000 units?

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 operating income for Cumberland?

Which of the following equations is TRUE?

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 contribution margin ratio?

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 total contribution margin for Cumberland?

Symbiosis Company had the following information: Activity Driver Unit Variable Cost Level of Activity Drive Units sold \ 20 -- Setups 1,000 80 Engineering hours 60 2,000 Other data: Total fixed costs (traditional) \ 800,000 Total fixed costs (ABC) \ 400,000 Unit selling price \4 0 Suppose Symbiosis could reduce setup costs by $500 per setup and could reduce the number of engineering hours needed to 1,216.66 hours. How many units must be sold to break even in this case?