The Laser Co. produces a single product. Its cost structure is: $\begin{array}{lll}&&\text { Variable Cost }\\ &\text { Fixed Cost }&\text { Per Unit }\\ \text { Manufacturing costs } & \$ 35,000 & \$ 15 \\ \text { Non-manufacturing costs } & 60,000 & 10 \end{array}$ If the firm sells 5,000 units per period, what price should be charged to earn $35,000?

A) $44 B) $45 C) $50 D) $51 A) $44 B) $45 C) $50 D) $51

PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: $\begin{array}{lr} \text { Total Fixed costs } & \$ 2,400 \\ \text { Tax rate } & 40 \% \end{array}$ $\begin{array}{lrrr}&\text { Picture } & \text { Candle } & \text { CD } \\ &\text { Holders } & \text { Holders } & \text { Holders } \\ \hline \text { Normal volume } & 300 & 150 & 200 \\ \text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \\ \text { Variable cost per unit } & 2 & 3 & 4 \end{array}$ The weighted average contribution margin ratio, rounded to the nearest whole percent, is:

A) 57% B) 59% C) 60% D) Some other number A) 57% B) 59% C) 60% D) Some other number

The Pantene Company is subject to income taxes of 20% on income through $25,000 and 40% on income in excess of $25,000. Projected information for next year follows: \[\begin{array} { l l } \text { Selling price per unit } & \$ 40 \\ \text { Variable costs per unit } & \$ 15 \\ \text { Fixed costs } & \$ 400,000 \\ \text { Sales in units } & 20,000 \end{array}\] What is Pantene's projected after-tax profit?

A) $65,000 B) $60,000 C) $70,000 D) $75,000 A) $65,000 B) $60,000 C) $70,000 D) $75,000

Exam 3: Cost-Volume-Profit Analysis

Ruben, Inc. is a management consulting firm specializing in pension plans. Its billing rate to clients is $120 per hour, and variable costs average $80 per hour. Fixed costs are $24,000 per month. The income tax rate is 20%. If variable costs increase by 10% and management increases its billing rate by 10%, what is the effect on the breakeven point, in billable hours?

(Multiple Choice)

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Question 101

Susan Co. has total variable costs equal to 40% of sales. Fixed costs are $120,000. What is the breakeven point in revenues?

(Multiple Choice)

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Question 102

When the assumption of linearity is applied to revenue in CVP analysis:

(Multiple Choice)

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Question 103

The Laser Co. produces a single product. Its cost structure is: Variable Cost Fixed Cost Per Unit Manufacturing costs \ 35,000 \ 15 Non-manufacturing costs 60,000 10 If the firm sells 5,000 units per period, what price should be charged to earn $35,000?

(Multiple Choice)

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Question 104

PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: Total Fixed costs \ 2,400 Tax rate 40\% Picture Candle CD Holders Holders Holders Normal volume 300 150 200 Price per unit \ 5 \ 7 \ 10 Variable cost per unit 2 3 4 The weighted average contribution margin ratio, rounded to the nearest whole percent, is:

(Multiple Choice)

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Question 105

A CVP analysis indicates that the breakeven point for Rebo Company is 2,000 units. If the company sells 2,350 units, then it will be guaranteed to earn a profit.

(True/False)

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Question 106

A larger margin of safety gives managers greater confidence in making plans such as incurring additional fixed costs.

(True/False)

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Question 107

The breakeven sales volume of the Fraser Co. is $800,000. If the variable cost per unit increases next year, then the new breakeven point will be:

(Multiple Choice)

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Question 108

CVP analysis can assist in budgeting for discretionary expenditures, such as fixed costs for advertising.

(True/False)

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Question 109

The breakeven point is often expressed as a cost per unit.

(True/False)

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Question 110

Assumptions and limitations are irrelevant when using CVP analysis.

(True/False)

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Question 111

The breakeven point can be expressed as a number of units or as total amount of revenue.

(True/False)

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Question 112

At the breakeven point:

(Multiple Choice)

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Question 113

At a breakeven point of 300 units, the variable costs were $600 and the fixed costs were $300. What will the next (i.e., 401st) unit sold contribute to profit before income taxes?

(Multiple Choice)

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Question 114

Managers should consider which of the following in CVP analysis? I. Assumptions II. Uncertainties III. Biases

(Multiple Choice)

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Question 115

The Pantene Company is subject to income taxes of 20% on income through $25,000 and 40% on income in excess of $25,000. Projected information for next year follows: Selling price per unit \ 40 Variable costs per unit \ 15 Fixed costs \ 400,000 Sales in units 20,000 What is Pantene's projected after-tax profit?

(Multiple Choice)

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Question 116

When an organization produces and sells a number of different products or services, the weighted average contribution margin per unit is used to determine the breakeven point or target profit in units.

(True/False)

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Question 117

Old MacDonald had a farm with expected fixed costs for next year of $91,000. The projected selling price per bushel is $12, with variable costs of $5 per bushel. How much revenue past the breakeven point does MacDonald have to earn to realize a pre-tax profit of $36,000 if variable costs drop to $3 per bushel?

(Multiple Choice)

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Question 118

BETA sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Which of the following actions will move Point A to the right on the x axis?

(Multiple Choice)

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Question 119

Which of the following techniques examine changes in profits in response to changes in volume, costs, and prices?

(Multiple Choice)

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Question 120

Showing 101 - 120 of 147

Susan Co. has total variable costs equal to 40% of sales. Fixed costs are $120,000. What is the breakeven point in revenues?

When the assumption of linearity is applied to revenue in CVP analysis:

The Laser Co. produces a single product. Its cost structure is: Variable Cost Fixed Cost Per Unit Manufacturing costs \ 35,000 \ 15 Non-manufacturing costs 60,000 10 If the firm sells 5,000 units per period, what price should be charged to earn $35,000?

A CVP analysis indicates that the breakeven point for Rebo Company is 2,000 units. If the company sells 2,350 units, then it will be guaranteed to earn a profit.

A larger margin of safety gives managers greater confidence in making plans such as incurring additional fixed costs.

The breakeven sales volume of the Fraser Co. is $800,000. If the variable cost per unit increases next year, then the new breakeven point will be:

CVP analysis can assist in budgeting for discretionary expenditures, such as fixed costs for advertising.

The breakeven point is often expressed as a cost per unit.

Assumptions and limitations are irrelevant when using CVP analysis.

The breakeven point can be expressed as a number of units or as total amount of revenue.

At the breakeven point:

At a breakeven point of 300 units, the variable costs were $600 and the fixed costs were $300. What will the next (i.e., 401st) unit sold contribute to profit before income taxes?

Managers should consider which of the following in CVP analysis? I. Assumptions II. Uncertainties III. Biases

When an organization produces and sells a number of different products or services, the weighted average contribution margin per unit is used to determine the breakeven point or target profit in units.

BETA sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Which of the following actions will move Point A to the right on the x axis?

Which of the following techniques examine changes in profits in response to changes in volume, costs, and prices?

The Role of Accounting Information in Ethical Management Decision Making

Cost Concepts, Behaviour, and Estimation

Relevant Information for Decision Making

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Pricing Decisions

Strategic Management of Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

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