Question 1

If fixed costs are $750,000 and variable costs are 60% of sales, the break-even point in sales dollars is

Accepted Answer

A) $1,250,000 
B) $450,000 
C) $1,875,000 
D) $300,000 
A) $1,250,000 
B) $450,000 
C) $1,875,000 
D) $300,000

Question 2

Jacob Inc. has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20. The old and new break-even sales (units), respectively, if the unit selling price increases by $4 is

Accepted Answer

A) 7,500 units and 6,667 units 
B) 20,000 units and 30,000 units 
C) 20,000 units and 15,000 units 
D) 12,000 units and 15,000 units 
A) 7,500 units and 6,667 units 
B) 20,000 units and 30,000 units 
C) 20,000 units and 15,000 units 
D) 12,000 units and 15,000 units

Question 3

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was

Accepted Answer

A) $5,000,000 
B) $3,000,000 
C) $12,000,000 
D) $1,000,000 
A) $5,000,000 
B) $3,000,000 
C) $12,000,000 
D) $1,000,000

Question 4

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

Accepted Answer

A) True 
 B)False

Question 5

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Accepted Answer

A) True 
 B)False

Question 6

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.​

Accepted Answer

A) $10.00 
B) $0.67 
C) $0.63 
D) $0.11 
A) $10.00 
B) $0.67 
C) $0.63 
D) $0.11

Question 7

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:   ​
-Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000. The operating leverage is

Accepted Answer

A) 2.5 
B) 7.5 
C) 2.0 
D) 0 
A) 2.5 
B) 7.5 
C) 2.0 
D) 0

Question 8

If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is

Accepted Answer

A) 25,000 units 
B) 29,000 units 
C) 4,000 units 
D) 21,000 units 
A) 25,000 units 
B) 29,000 units 
C) 4,000 units 
D) 21,000 units

Question 9

Define operating leverage. Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.

Accepted Answer

Operating leverage is the relationship b

Question 10

Perfect Stampers makes and sells aftermarket hub caps. The variable cost for each hub cap is $4.75, and the hub cap sells for $9.95. Perfect Stampers has fixed costs per month of $3,120. Compute the contribution margin per unit and the break-even sales in units and in dollars for the month.

Accepted Answer

Contribution margin: $9.95 sel

Question 11

If the property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.

Accepted Answer

A) True 
 B)False

Question 12

If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, the break-even sales (units) is

Accepted Answer

A) 3,425 units 
B) 2,381 units 
C) 2,000 units 
D) 4,808 units 
A) 3,425 units 
B) 2,381 units 
C) 2,000 units 
D) 4,808 units

Question 13

Cost-volume-profit relationships in a service company are measured with respect to customers and activities, rather than units of product.

Accepted Answer

A) True 
 B)False

Question 14

For purposes of analysis, mixed costs are

Accepted Answer

A) classified as fixed costs 
B) classified as variable costs 
C) classified as period costs 
D) separated into their variable and fixed cost components 
A) classified as fixed costs 
B) classified as variable costs 
C) classified as period costs 
D) separated into their variable and fixed cost components

Question 15

The relative distribution of sales among the various products sold by a business is the

Accepted Answer

A) business's basket of goods 
B) contribution margin mix 
C) sales mix 
D) product portfolio 
A) business's basket of goods 
B) contribution margin mix 
C) sales mix 
D) product portfolio

Question 16

Match each of the following costs of producing T-shirts with the appropriate classification (a-c).
-Janitorial costs of $4,000 per month
A)Variable cost
B)Fixed cost
C)Mixed cost

Accepted Answer

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

Question 17

A mixed cost has characteristics of both a variable and a fixed cost.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an assumption underlying cost-volume-profit analysis?

Accepted Answer

A) The break-even point will be passed during the period. 
B) Total sales and total costs can be represented by straight lines. 
C) Costs can be accurately divided into fixed and variable components. 
D) The sales mix is constant. 
A) The break-even point will be passed during the period. 
B) Total sales and total costs can be represented by straight lines. 
C) Costs can be accurately divided into fixed and variable components. 
D) The sales mix is constant.

Question 19

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Accepted Answer

A) True 
 B)False

Question 20

If fixed costs increased and variable costs per unit decreased, the break-even point

Accepted Answer

A) would increase 
B) would decrease 
C) would remain the same 
D) cannot be determined from the data given 
A) would increase 
B) would decrease 
C) would remain the same 
D) cannot be determined from the data given

Exam 20: Cost-Volume-Profit Analysis

If fixed costs are $750,000 and variable costs are 60% of sales, the break-even point in sales dollars is

Jacob Inc. has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20. The old and new break-even sales (units), respectively, if the unit selling price increases by $4 is

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.​

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ​ -Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000. The operating leverage is

If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is

Define operating leverage. Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.

Perfect Stampers makes and sells aftermarket hub caps. The variable cost for each hub cap is $4.75, and the hub cap sells for $9.95. Perfect Stampers has fixed costs per month of $3,120. Compute the contribution margin per unit and the break-even sales in units and in dollars for the month.

If the property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.

If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, the break-even sales (units) is

Cost-volume-profit relationships in a service company are measured with respect to customers and activities, rather than units of product.

For purposes of analysis, mixed costs are

The relative distribution of sales among the various products sold by a business is the

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Janitorial costs of $4,000 per month A)Variable cost B)Fixed cost C)Mixed cost

A mixed cost has characteristics of both a variable and a fixed cost.

Which of the following is not an assumption underlying cost-volume-profit analysis?

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

If fixed costs increased and variable costs per unit decreased, the break-even point

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

Filters

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: -Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000. The operating leverage is