Information about the Harmonious Company's two products includes: $\begin{array}{llr}&\text { Product } X & \text { Product } Y\\ \text { Unit selling price } & \$ 11.25 & \$ 11.25 \\ \text { Unit variable costs: } \\ \text { Manufacturing }& \$ 5.25 & \$ 6.75 \\ \text { Selling } & .75& .75 \\ \text { Total }&\$6.00 &\$7.50\\ \end{array}$ $\begin{array}{lr} \text { Monthly fixed costs are as follows: } & \\ \text { Manufacturing } & \$ 82,500 \\ \text { Selling and administrative } & 45,000 \\ \text { Total } & \$ 127,500 \end{array}$ What is the total monthly sales volume in units required to break even when the sales mix in units is 70 percent Product X and 30 percent Product Y?

A) 4,333 units B) 26,563 units C) 8,667 units D) 28,667 units A) 4,333 units B) 26,563 units C) 8,667 units D) 28,667 units

Fantasmas Incorporated had the following information: $\begin{array}{lrr} \text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\ \text { Units sold } & \$ 20&-- \\ \text { Setups } & 1,200 &60\\ \text { Engineering hours } & 52&1,500\\\\ \text { Other data: }\\ \text { Total fixed costs (traditional) } & \$ 600,000 \\ \text { Total fixed costs }(A B C) & \$ 360,000 \\ \text { Unit selling price } & \$60 \end{array}$ What is the break-even point in units using ABC?

A) 6,325 units B) 8,500 units C) 12,750 units D) 19,125 units A) 6,325 units B) 8,500 units C) 12,750 units D) 19,125 units

Fantasmas Incorporated had the following information: $\begin{array}{lrr} \text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\ \text { Units sold } & \$ 20&-- \\ \text { Setups } & 1,200 &60\\ \text { Engineering hours } & 52&1,500\\\\ \text { Other data: }\\ \text { Total fixed costs (traditional) } & \$ 600,000 \\ \text { Total fixed costs }(A B C) & \$ 360,000 \\ \text { Unit selling price } & \$60 \end{array}$ Suppose Fantasmas could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 1,400 hours. How many units must be sold to break even in this case?

A) 7,243 units B) 24,340 units C) 12,170 units D) 8,554 units A) 7,243 units B) 24,340 units C) 12,170 units D) 8,554 units

Summersville Production Company had the following projected information for the current year: $\begin{array} { l } \text { Selling price per unit}&\$150\\ \text { Variable cost per unit}&\$90,000\\ \text {Total fixed costs }&\$300,000\\ \end{array}$ What is the break-even point in units?

A) 2,000 units B) 5,000 units C) 3,333 units D) 60,000 units A) 2,000 units B) 5,000 units C) 3,333 units D) 60,000 units

Amber Company had the following information: $\begin{array}{lrr} \text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\ \text { Units sold } & \$ 30&-- \\ \text { Setups } & 1,500 &50\\ \text { Engineering hours } & 50&1,200\\\\ \text { Other data: }\\ \text { Total fixed costs (traditional) } & \$ 500,000 \\ \text { Total fixed costs (Activity-based costing) } & 200,000 \\ \text { Unit selling price } & 50 \end{array}$ How many units need to be sold to produce a before-tax profit of $100,000 using activity-based costing (ABC)?

A) 21,750 units B) 20,900 units C) 16,800 units D) 21,500 units A) 21,750 units B) 20,900 units C) 16,800 units D) 21,500 units

Exam 16: Cost-Volume-Profit Analysis

Information about the Harmonious Company's two products includes: Product X Product Y Unit selling price \ 11.25 \ 11.25 Unit variable costs: Manufacturing \ 5.25 \ 6.75 Selling .75 .75 Total \6 .00 \7 .50 Monthly fixed costs are as follows: Manufacturing \ 82,500 Selling and administrative 45,000 Total \ 127,500 What is the total monthly sales volume in units required to break even when the sales mix in units is 70 percent Product X and 30 percent Product Y?

(Multiple Choice)

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Question 121

Sensitivity analysis is a what-if technique that examines the impact of changes in assumptions.

(True/False)

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Question 122

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 What is the break-even point in units using ABC?

(Multiple Choice)

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Question 123

The operating leverage shows how far the company's actual sales or units are from the break-even point.

(True/False)

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Question 124

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 Suppose Fantasmas could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 1,400 hours. How many units must be sold to break even in this case?

(Multiple Choice)

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(86)

Question 125

Summersville Production Company had the following projected information for the current year: Selling price per unit \1 50 Variable cost per unit \9 0,000 Total fixed costs \3 00,000 What is the break-even point in units?

(Multiple Choice)

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Question 126

In cost-volume-profit analysis income taxes __________ the break even point.

(Short Answer)

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Question 127

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 sales dollars for Biscuit Company?

(Multiple Choice)

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(75)

Question 128

Amber Company had the following information: Activity Driver Unit Variable Cost Level of Activity Drive Units sold \ 30 -- Setups 1,500 50 Engineering hours 50 1,200 Other data: Total fixed costs (traditional) \ 500,000 Total fixed costs (Activity-based costing) 200,000 Unit selling price 50 How many units need to be sold to produce a before-tax profit of $100,000 using activity-based costing (ABC)?

(Multiple Choice)

4.8/5

(79)

Question 129

Sensitivity analysis is a what-if technique that examines the impact of changes in assumptions.

The operating leverage shows how far the company's actual sales or units are from the break-even point.

Summersville Production Company had the following projected information for the current year: Selling price per unit \1 50 Variable cost per unit \9 0,000 Total fixed costs \3 00,000 What is the break-even point in units?

In cost-volume-profit analysis income taxes __________ the break even point.

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 sales dollars for Biscuit Company?

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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