Question 1

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

Accepted Answer

A) total fixed costs decrease 
B) unit selling price increases 
C) unit variable cost decreases 
D) unit variable cost increases 
A) total fixed costs decrease 
B) unit selling price increases 
C) unit variable cost decreases 
D) unit variable cost increases

Question 2

Tom Company reports the following data:   Determine Tom Company's operating leverage.

Accepted Answer

($600,000 - $400,000

Question 3

Match each of the following costs of producing T-shirts with the appropriate classification (a-c).
-Hourly wages of sewing machine operators
A)Variable cost
B)Fixed cost
C)Mixed cost

Accepted Answer

The answer of Match each of the following costs of...

Question 4

The point where the profit line intersects the horizontal axis on the profit-volume chart represents the

Accepted Answer

A) maximum possible operating loss 
B) maximum possible operating income 
C) total fixed costs 
D) break-even point 
A) maximum possible operating loss 
B) maximum possible operating income 
C) total fixed costs 
D) break-even point

Question 5

The three most common cost behavior classifications are

Accepted Answer

A) variable costs, product costs, and sunk costs 
B) fixed costs, variable costs, and mixed costs 
C) variable costs, period costs, and differential costs 
D) variable costs, sunk costs, and opportunity costs 
A) variable costs, product costs, and sunk costs 
B) fixed costs, variable costs, and mixed costs 
C) variable costs, period costs, and differential costs 
D) variable costs, sunk costs, and opportunity costs

Question 6

If direct materials cost per unit increases, the break-even point will increase.

Accepted Answer

A) True 
 B)False

Question 7

Cordell, Inc., has an operating leverage of 3. Sales are expected to increase by 9% next year. What is the expected change in operating income next year?

Accepted Answer

Operating income is

Question 8

If fixed costs are $600,000 and the unit contribution margin is $40, the break-even point if fixed costs are increased by $90,000 is

Accepted Answer

A) 17,250 units 
B) 15,000 units 
C) 8,333 units 
D) 9,667 units 
A) 17,250 units 
B) 15,000 units 
C) 8,333 units 
D) 9,667 units

Question 9

Match each of the following descriptions with the appropriate term (a-e).
-The point at which a business's revenues exactly equal costs
A)Relevant range
B)Break-even point
C)Contribution margin
D)Fixed costs
E)Variable costs

Accepted Answer

The answer of Match each of the following descriptions with...

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Accepted Answer

A) True 
 B)False

Question 12

Thompson Company manufactures and sells cookware. Because of current trends, it expects to increase sales by 15% next year. If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year's total amounts for the following costs?

Accepted Answer

The answer of Thompson Company manufactures and sells cookware. Because...

Question 13

Match each of the following descriptions with the appropriate term (a-e).
-Indicates the possible decrease in sales that may occur before operating loss results
A)Profit-volume chart
B)Cost-volume-profit chart
C)Sales mix
D)Operating leverage
E)Margin of safety

Accepted Answer

The answer of Match each of the following descriptions with...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The contribution margin ratio is the same as the profit-volume ratio.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following types of cost is shown in the cost data below?

Accepted Answer

A) mixed cost 
B) variable cost 
C) fixed cost 
D) period cost 
A) mixed cost 
B) variable cost 
C) fixed cost 
D) period cost

Question 17

Direct materials and direct labor costs are examples of variable costs of production.

Accepted Answer

A) True 
 B)False

Question 18

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

Accepted Answer

A) True 
 B)False

Question 19

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases.          
-Total direct materials cost
A)Graph 1
B)Graph 2
C)Graph 3
D)Graph 4
E)Graph 5

Accepted Answer

The answer of Match each of the following costs with...

Question 20

Match each of the following descriptions with the appropriate term (a-e).
-Remain(s) the same in total dollar amount as the level of activity changes
A)Relevant range
B)Break-even point
C)Contribution margin
D)Fixed costs
E)Variable costs

Accepted Answer

The answer of Match each of the following descriptions with...

Exam 20: Cost-Volume-Profit Analysis

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

Tom Company reports the following data: Determine Tom Company's operating leverage.

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Hourly wages of sewing machine operators A)Variable cost B)Fixed cost C)Mixed cost

The point where the profit line intersects the horizontal axis on the profit-volume chart represents the

The three most common cost behavior classifications are

If direct materials cost per unit increases, the break-even point will increase.

Cordell, Inc., has an operating leverage of 3. Sales are expected to increase by 9% next year. What is the expected change in operating income next year?

If fixed costs are $600,000 and the unit contribution margin is $40, the break-even point if fixed costs are increased by $90,000 is

Match each of the following descriptions with the appropriate term (a-e). -The point at which a business's revenues exactly equal costs A)Relevant range B)Break-even point C)Contribution margin D)Fixed costs E)Variable costs

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

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Thompson Company manufactures and sells cookware. Because of current trends, it expects to increase sales by 15% next year. If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year's total amounts for the following costs?

Match each of the following descriptions with the appropriate term (a-e). -Indicates the possible decrease in sales that may occur before operating loss results A)Profit-volume chart B)Cost-volume-profit chart C)Sales mix D)Operating leverage E)Margin of safety

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

The contribution margin ratio is the same as the profit-volume ratio.

Which of the following types of cost is shown in the cost data below?

Direct materials and direct labor costs are examples of variable costs of production.

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases. -Total direct materials cost A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Match each of the following descriptions with the appropriate term (a-e). -Remain(s) the same in total dollar amount as the level of activity changes A)Relevant range B)Break-even point C)Contribution margin D)Fixed costs E)Variable costs

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

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