Question 1

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.

Accepted Answer

A) True 
 B)False

Question 2

Break-even analysis is a type of cost-volume-profit analysis.

Accepted Answer

A) True 
 B)False

Question 3

Rouney Co.has budgeted that factory supervisors' salary will increase by 10%.If selling prices and all other cost relationships are held constant, next year's break-even point would:

Accepted Answer

A)  decrease by 10%. 
B)  increase by 10%. 
C)  remain constant. 
D)  increase at a rate greater than 10%. 
A)  decrease by 10%. 
B)  increase by 10%. 
C)  remain constant. 
D)  increase at a rate greater than 10%.

Question 4

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Accepted Answer

A)  Number of cooks scheduled to work 
B)  Number of x-rays taken 
C)  Number of patients who are admitted in the hospital 
D)  Number of scheduled surgeries 
A)  Number of cooks scheduled to work 
B)  Number of x-rays taken 
C)  Number of patients who are admitted in the hospital 
D)  Number of scheduled surgeries

Question 5

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume graph.

Accepted Answer

A) True 
 B)False

Question 6

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

Accepted Answer

A) True 
 B)False

Question 7

Calculate break-even sales (in units) when fixed cost is $216,000, unit selling price is $120, and unit variable cost is $60.

Accepted Answer

A)  4,100 units 
B)  2,300 units 
C)  3,400 units 
D)  3,600 units 
A)  4,100 units 
B)  2,300 units 
C)  3,400 units 
D)  3,600 units

Question 8

If the unit selling price is $50, the volume of sales is $450,000, sales at the break-even point amount to $375,000, and the maximum possible sales are $550,000, the margin of safety will be 2,000 units.

Accepted Answer

A) True 
 B)False

Question 9

A company operated at 82% of its capacity for the past year.Fixed costs during this time were $152,000, variable costs were 60% of sales, and sales were $790,000.Calculate the company's operating profit.

Accepted Answer

A)  $97,000 
B)  $185,000 
C)  $56,000 
D)  $164,000 
A)  $97,000 
B)  $185,000 
C)  $56,000 
D)  $164,000

Question 10

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

A)  Decrease in total fixed costs 
B)  Increase in unit selling price 
C)  Decrease in unit variable cost 
D)  Increase in unit variable cost 
A)  Decrease in total fixed costs 
B)  Increase in unit selling price 
C)  Decrease in unit variable cost 
D)  Increase in unit variable cost

Question 11

The break-even point (in units) is calculated by dividing the total estimated fixed costs by the net sales of a period.

Accepted Answer

A) True 
 B)False

Question 12

If sales total $5,000,000, fixed costs total $400,000, and variable costs are 2,750,000, the contribution margin ratio is 45%.

Accepted Answer

A) True 
 B)False

Question 13

Foggy Co.has the following operating data for its manufacturing operations: $$\begin{array} { l r } 
\text { Unit selling price } & \$ 250 \
\text { Unit variable cost } & \$ 100 \
\text { Total fixed costs } & \$ 840,000
\end{array}$$ ? The company has decided to increase the wages of hourly workers, which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant, the break-even point for Foggy Co.will:

Accepted Answer

A)  increase by 400 units. 
B)  increase by 640 units. 
C)  decrease by 640 units. 
D)  increase by 800 units. 
A)  increase by 400 units. 
B)  increase by 640 units. 
C)  decrease by 640 units. 
D)  increase by 800 units.

Question 14

Which of the following is true of a variable cost?

Accepted Answer

A)  Total variable cost remains constant with changes in the number of goods sold. 
B)  Unit variable cost decreases with an increase in production. 
C)  Unit variable cost remains constant with changes in production. 
D)  Total variable cost decreases with an increase in the number of goods sold. 
A)  Total variable cost remains constant with changes in the number of goods sold. 
B)  Unit variable cost decreases with an increase in production. 
C)  Unit variable cost remains constant with changes in production. 
D)  Total variable cost decreases with an increase in the number of goods sold.

Question 15

The following information is given for the maintenance department of Goldenrod Co.Calculate the variable costs per unit using the high-low method. ? $$\begin{array} { l c c } 
& \text { Cost } & \text { Production in units } \
\text { July } & \$ 2,100 & 14,000 \
\text { August } & 1,000 & 9,000 \
\text { September } & 1,800 & 10,000 \
\text { October } & 4,000 & 21,000
\end{array}$$

Accepted Answer

A)  $0.17 
B)  $0.11 
C)  $0.25 
D)  $0.08 
A)  $0.17 
B)  $0.11 
C)  $0.25 
D)  $0.08

Question 16

ABC Co.manufactures pens.During the most productive month of the year, 3,650 pens were manufactured at a total cost of $84,550.During its slowest month, the company made 1,250 pens at a cost of $46,150.Calculate the total fixed cost using the high-low method of cost estimation.

Accepted Answer

A)  $25,650 
B)  $28,300 
C)  $26,150 
D)  $27,800 
A)  $25,650 
B)  $28,300 
C)  $26,150 
D)  $27,800

Question 17

Which of the following graphs illustrates the behavior of a total fixed cost within the specified relevant range? ​   ​

Accepted Answer

A)  Graph 2 
B)  Graph 3 
C)  Graph 4 
D)  Graph 1 
A)  Graph 2 
B)  Graph 3 
C)  Graph 4 
D)  Graph 1

Question 18

Omega Inc.is expecting a reduction of $25,000 in fixed costs of $725,000.What will be the change in break-even sales (in units), if selling price per unit is $50 and the unit variable cost is $35?

Accepted Answer

A)  48,333 units 
B)  46,667 units 
C)  1,667 units 
D)  2,500 units 
A)  48,333 units 
B)  46,667 units 
C)  1,667 units 
D)  2,500 units

Question 19

Cost-volume-profit analysis can be presented in both graphically and equation form.

Accepted Answer

A) True 
 B)False

Question 20

Currently, fixed costs are $540,000, the unit selling price is $95, and the unit variable cost is $60.What would be the break-even sales (in units), if the unit selling price is increased by $10?

Accepted Answer

A)  5,294 units 
B)  9,000 units 
C)  12,857 units 
D)  12,000 units 
A)  5,294 units 
B)  9,000 units 
C)  12,857 units 
D)  12,000 units

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.

Break-even analysis is a type of cost-volume-profit analysis.

Rouney Co.has budgeted that factory supervisors' salary will increase by 10%.If selling prices and all other cost relationships are held constant, next year's break-even point would:

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume graph.

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

Calculate break-even sales (in units) when fixed cost is $216,000, unit selling price is $120, and unit variable cost is $60.

If the unit selling price is $50, the volume of sales is $450,000, sales at the break-even point amount to $375,000, and the maximum possible sales are $550,000, the margin of safety will be 2,000 units.

A company operated at 82% of its capacity for the past year.Fixed costs during this time were $152,000, variable costs were 60% of sales, and sales were $790,000.Calculate the company's operating profit.

Which of the following conditions would cause the break-even point to increase?

The break-even point (in units) is calculated by dividing the total estimated fixed costs by the net sales of a period.

If sales total $5,000,000, fixed costs total $400,000, and variable costs are 2,750,000, the contribution margin ratio is 45%.

Which of the following is true of a variable cost?

The following information is given for the maintenance department of Goldenrod Co.Calculate the variable costs per unit using the high-low method. ? Cost Production in units July \ 2,100 14,000 August 1,000 9,000 September 1,800 10,000 October 4,000 21,000

ABC Co.manufactures pens.During the most productive month of the year, 3,650 pens were manufactured at a total cost of $84,550.During its slowest month, the company made 1,250 pens at a cost of $46,150.Calculate the total fixed cost using the high-low method of cost estimation.

Which of the following graphs illustrates the behavior of a total fixed cost within the specified relevant range?

Omega Inc.is expecting a reduction of $25,000 in fixed costs of $725,000.What will be the change in break-even sales (in units), if selling price per unit is $50 and the unit variable cost is $35?

Cost-volume-profit analysis can be presented in both graphically and equation form.

Currently, fixed costs are $540,000, the unit selling price is $95, and the unit variable cost is $60.What would be the break-even sales (in units), if the unit selling price is increased by $10?

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 11: Cost-Volume-Profit Analysis

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.

Break-even analysis is a type of cost-volume-profit analysis.

Rouney Co.has budgeted that factory supervisors' salary will increase by 10%.If selling prices and all other cost relationships are held constant, next year's break-even point would:

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume graph.

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

Calculate break-even sales (in units) when fixed cost is $216,000, unit selling price is $120, and unit variable cost is $60.

If the unit selling price is $50, the volume of sales is $450,000, sales at the break-even point amount to $375,000, and the maximum possible sales are $550,000, the margin of safety will be 2,000 units.

A company operated at 82% of its capacity for the past year.Fixed costs during this time were $152,000, variable costs were 60% of sales, and sales were $790,000.Calculate the company's operating profit.

Which of the following conditions would cause the break-even point to increase?

The break-even point (in units) is calculated by dividing the total estimated fixed costs by the net sales of a period.

If sales total $5,000,000, fixed costs total $400,000, and variable costs are 2,750,000, the contribution margin ratio is 45%.

Which of the following is true of a variable cost?

The following information is given for the maintenance department of Goldenrod Co.Calculate the variable costs per unit using the high-low method. ? Cost Production in units July \ 2,100 14,000 August 1,000 9,000 September 1,800 10,000 October 4,000 21,000

ABC Co.manufactures pens.During the most productive month of the year, 3,650 pens were manufactured at a total cost of $84,550.During its slowest month, the company made 1,250 pens at a cost of $46,150.Calculate the total fixed cost using the high-low method of cost estimation.

Which of the following graphs illustrates the behavior of a total fixed cost within the specified relevant range? ​ ​

Omega Inc.is expecting a reduction of $25,000 in fixed costs of $725,000.What will be the change in break-even sales (in units), if selling price per unit is $50 and the unit variable cost is $35?

Cost-volume-profit analysis can be presented in both graphically and equation form.

Currently, fixed costs are $540,000, the unit selling price is $95, and the unit variable cost is $60.What would be the break-even sales (in units), if the unit selling price is increased by $10?

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Which of the following graphs illustrates the behavior of a total fixed cost within the specified relevant range?