Exam 5: Cost-Volume-Profit

Sweet Manufacturing is planning to sell 400,000 hammers for $6 per unit. The contribution margin ratio is 20%. If Sweet will break even at this level of sales, what are the fixed costs?

Variable costs for Abbey, Inc. are 25% of sales. Its selling price is $100 per unit. If Abbey sells one unit more than break-even units, how much will profit increase?

If volume increases, all costs will increase.

Ponszko Nursery used high-low data from June and July to determine its variable cost of $12 per unit. Additional information follows Month Units produced Total costs June 2,000 \ 32,000 July 1,000 20,000 If Ponszko's produces 2,300 units in August, how much is its total cost expected to be?

Which of the following is not a fixed cost?

Gribble Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $156,000 in May and $60,000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units.

At the break-even point of 2,000 units, variable costs are $165,000, and fixed costs are $96,000. How much is the selling price per unit?

Fixed costs normally will not include

The contribution margin ratio is calculated by multiplying the unit contribution margin by the unit sales price.

Frazier Manufacturing Company collected the following production data for the past month: Units Produced Total Cost 1,600 \ 66,000 1,300 57,000 1,500 67,500 1,100 49,500 If the high-low method is used, what is the monthly total cost equation?

Which of the following is not a mixed cost?

CVP analysis is not important in

Contribution margin is the amount of revenues remaining after deducting cost of goods sold.