Exam 5: Cost-Volume-Profit

A cost-volume-profit graph shows the amount of net income or loss at each level of sales.

Which of the following would not be an acceptable way to express contribution margin?

An example of a mixed cost is

Which of the following would be the least controllable fixed costs?

April Industries sells a product with a contribution margin of $12 per unit, fixed costs of $223,200, and sales for the current year of $300,000. How much is April's break-even point?

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $120,000. What sales are needed by Cunningham to break even?

Which of the following is not a cost classification?

O'Malley Company sells 100,000 units for $13 a unit. Fixed costs are $350,000 and net income is $250,000. What should be reported as variable expenses in the CVP income statement?

The following monthly data are available for Lumberyard Company. which produces only one product: Selling price per unit, $42; Unit variable expenses, $14; Total fixed expenses, $42,000; Actual sales for the month of June, 3,000 units. How much is the margin of safety for the company for June?

In applying the high-low method, which months are relevant? Month Miles Total Cost January 80,000 \ 192,000 February 50,000 160,000 March 70,000 188,000 April 90,000 260,000

Stephanie, Inc. sells its product for $40. The variable costs are $18 per unit. Fixed costs are $16,000. The company is considering the purchase of an automated machine that will result in a $2 reduction in unit variable costs and an increase of $5,000 in fixed costs. Which of the following is true about the break-even point in units?

When applying the high-low method, the variable cost element of a mixed cost is calculated before the fixed cost element.

In applying the high-low method, what is the fixed cost? $\begin{array}{llr}\text { Month}&\text { Miles }&\text { Total Cost }\\hline \text { January } & \overline{80,000} & \$ 192,000 \\\text { February } & 50,000 & 160,000 \\\text { March } & 70,000 & 188,000 \\\text { April } & 90,000 & 260,000\end{array}$

Required sales in dollars to meet a target net income is computed by dividing

The following information is available for Wade Corp.: Sales \ 580,000 Total fixed expenses \ 150,000 Cost of goods sold 390,000 Total variable expenses 360,000 A CVP income statement would report

In applying the high-low method, what is the unit variable cost? $\begin{array}{llr}\text { Month}&\text { Miles }&\text { Total Cost }\\hline \text { January } & \overline{80,000} & \$ 192,000 \\\text { February } & 50,000 & 160,000 \\\text { March } & 70,000 & 188,000 \\\text { April } & 90,000 & 260,000\end{array}$

A company has a unit contribution margin of $120 and a contribution margin ratio of 40%. What is the unit selling price?

Nelson Manufacturing has the following data: Variable costs are 60% of the unit selling price. The contribution margin ratio is 40%. The unit contribution margin is $500. The fixed costs are $500,000. Which of the following does not express the break-even point?

Gall Manufacturing sells a product for $50 per unit. The fixed costs are $840,000 and the variable costs are 60% of the selling price. As a result of new automated equipment, it is anticipated that fixed costs will increase by $200,000 and variable costs will be 50% of the selling price. The new break-even point in units is:

If a company had a contribution margin of $1,000,000 and a contribution margin ratio of 40%, total variable costs must have been