Question 1

For planning purposes, mixed costs are generally grouped with fixed costs.

Accepted Answer

A) True 
 B)False

Question 2

If graphed, fixed costs that behave in a curvilinear fashion resemble a(n)

Accepted Answer

A)  S-curve. 
B)  inverted S-curve. 
C)  straight line. 
D)  stair-step pattern. 
A)  S-curve. 
B)  inverted S-curve. 
C)  straight line. 
D)  stair-step pattern.

Question 3

A CVP graph does not include a

Accepted Answer

A)  variable cost line. 
B)  fixed cost line. 
C)  sales line. 
D)  total cost line. 
A)  variable cost line. 
B)  fixed cost line. 
C)  sales line. 
D)  total cost line.

Question 4

Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions.

Accepted Answer

A) True 
 B)False

Question 5

A mixed cost has both selling and administrative cost elements.

Accepted Answer

A) True 
 B)False

Question 6

The amount by which actual or expected sales exceeds break-even sales is referred to as

Accepted Answer

A)  contribution margin. 
B)  unanticipated profit. 
C)  margin of safety. 
D)  target net income. 
A)  contribution margin. 
B)  unanticipated profit. 
C)  margin of safety. 
D)  target net income.

Question 7

Reliable Manufacturing wants to sell a sufficient quantity of products to earn a profit of $100,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $200,000, how many units must be sold to earn income of $100,000?

Accepted Answer

A)  150,000 units 
B)  100,000 units 
C)  37,500 units 
D)  1,500,000 units 
A)  150,000 units 
B)  100,000 units 
C)  37,500 units 
D)  1,500,000 units

Question 8

The fixed cost element of a mixed cost is the cost of having a service available.

Accepted Answer

A) True 
 B)False

Question 9

A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $240,000. The number of units the company must sell to break even is

Accepted Answer

A)  120,000 units. 
B)  48,000 units. 
C)  480,000 units. 
D)  80,000 units. 
A)  120,000 units. 
B)  48,000 units. 
C)  480,000 units. 
D)  80,000 units.

Question 10

The break-even point is where total sales equal total variable costs.

Accepted Answer

A) True 
 B)False

Question 11

The break-even point is equal to the fixed costs plus net income.

Accepted Answer

A) True 
 B)False

Question 12

The contribution margin ratio increases when

Accepted Answer

A)  fixed costs increase. 
B)  fixed costs decrease. 
C)  variable costs as a percentage of sales decrease. 
D)  variable costs as a percentage of sales increase. 
A)  fixed costs increase. 
B)  fixed costs decrease. 
C)  variable costs as a percentage of sales decrease. 
D)  variable costs as a percentage of sales increase.

Question 13

How much sales are required to earn a target net income of $200,000 if total fixed costs are $250,000 and the contribution margin ratio is 40%?

Accepted Answer

A)  $625,000 
B)  $1,012,500 
C)  $1,125,000 
D)  $500,000 
A)  $625,000 
B)  $1,012,500 
C)  $1,125,000 
D)  $500,000

Question 14

The trend in most companies is to have more variable costs and fewer fixed costs.

Accepted Answer

A) True 
 B)False

Question 15

At the break-even point,

Accepted Answer

A)  sales equal total variable costs. 
B)  contribution margin equals total variable costs. 
C)  contribution margin equals total fixed costs. 
D)  sales equal total fixed costs. 
A)  sales equal total variable costs. 
B)  contribution margin equals total variable costs. 
C)  contribution margin equals total fixed costs. 
D)  sales equal total fixed costs.

Question 16

The high-low method is often employed in analyzing

Accepted Answer

A)  fixed costs. 
B)  mixed costs. 
C)  variable costs. 
D)  conversion costs. 
A)  fixed costs. 
B)  mixed costs. 
C)  variable costs. 
D)  conversion costs.

Question 17

Lansbury Manufacturing produces hair brushes. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Lansbury sells 30 more units beyond breakeven, how much does profit increase as a result?

Accepted Answer

A)  $360 
B)  $600 
C)  $240 
D)  $1,200 
A)  $360 
B)  $600 
C)  $240 
D)  $1,200

Question 18

How much sales are required to earn a target income of $240,000 if total fixed costs are $300,000 and the contribution margin ratio is 40%?

Accepted Answer

A)  $900,000 
B)  $600,000 
C)  $1,350,000 
D)  $990,000 
A)  $900,000 
B)  $600,000 
C)  $1,350,000 
D)  $990,000

Question 19

Which of the following costs are variable? $\begin{array}{rrr}\text { Cost }&10,000 \text { Units }& 30,000 \text { Units }\
\hline 1 . & \$ 100,000 & \$ 300,000 \
2 . & 40,000 & 240,000 \
3 . & 90,000 & 90,000 \
4 & 50,000 & 150,000
\end{array}$

Accepted Answer

A)  1 and 2 
B)  1 and 4 
C)  only 1 
D)  only 2 
A)  1 and 2 
B)  1 and 4 
C)  only 1 
D)  only 2

Question 20

Bruno & Court is a nonprofit organization that captures stray deer bewildered within residential communities. Fixed costs are $20,000. The variable cost of capturing each deer is $10 each. Bruno & Court is funded by a local philanthropy in the amount of $64,000 for 2019. How many deer can Bruno & Court capture during 2019?

Accepted Answer

A)  4,400 
B)  6,400 
C)  8,400 
D)  4,000 
A)  4,400 
B)  6,400 
C)  8,400 
D)  4,000

For planning purposes, mixed costs are generally grouped with fixed costs.

If graphed, fixed costs that behave in a curvilinear fashion resemble a(n)

A CVP graph does not include a

Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions.

A mixed cost has both selling and administrative cost elements.

The amount by which actual or expected sales exceeds break-even sales is referred to as

Reliable Manufacturing wants to sell a sufficient quantity of products to earn a profit of $100,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $200,000, how many units must be sold to earn income of $100,000?

The fixed cost element of a mixed cost is the cost of having a service available.

A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $240,000. The number of units the company must sell to break even is

The break-even point is where total sales equal total variable costs.

The break-even point is equal to the fixed costs plus net income.

The contribution margin ratio increases when

How much sales are required to earn a target net income of $200,000 if total fixed costs are $250,000 and the contribution margin ratio is 40%?

The trend in most companies is to have more variable costs and fewer fixed costs.

At the break-even point,

The high-low method is often employed in analyzing

Lansbury Manufacturing produces hair brushes. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Lansbury sells 30 more units beyond breakeven, how much does profit increase as a result?

How much sales are required to earn a target income of $240,000 if total fixed costs are $300,000 and the contribution margin ratio is 40%?

Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. \ 100,000 \ 300,000 2. 40,000 240,000 3. 90,000 90,000 4 50,000 150,000

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 5: Cost-Volume-Profit

For planning purposes, mixed costs are generally grouped with fixed costs.

If graphed, fixed costs that behave in a curvilinear fashion resemble a(n)

A CVP graph does not include a

Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions.

A mixed cost has both selling and administrative cost elements.

The amount by which actual or expected sales exceeds break-even sales is referred to as

Reliable Manufacturing wants to sell a sufficient quantity of products to earn a profit of $100,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $200,000, how many units must be sold to earn income of $100,000?

The fixed cost element of a mixed cost is the cost of having a service available.

A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $240,000. The number of units the company must sell to break even is

The break-even point is where total sales equal total variable costs.

The break-even point is equal to the fixed costs plus net income.

The contribution margin ratio increases when

How much sales are required to earn a target net income of $200,000 if total fixed costs are $250,000 and the contribution margin ratio is 40%?

The trend in most companies is to have more variable costs and fewer fixed costs.

At the break-even point,

The high-low method is often employed in analyzing

Lansbury Manufacturing produces hair brushes. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Lansbury sells 30 more units beyond breakeven, how much does profit increase as a result?

How much sales are required to earn a target income of $240,000 if total fixed costs are $300,000 and the contribution margin ratio is 40%?

Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. \ 100,000 \ 300,000 2. 40,000 240,000 3. 90,000 90,000 4 50,000 150,000

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters