Exam 20: Cost-Volume-Profit Analysis

For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and an anticipated break-even point of 1,715 sales units. a.Compute the unit sales price. b.Compute the sales (units) required to realize an operating profit of $8,000.Round your answer to the nearest whole number.

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

Dean Company has sales of $500,000, and the break-even point in sales dollars is $300,000. Determine the company's margin of safety percentage.

Costs that remain constant in total dollar amount as the level of activity changes are called ________ costs.

If fixed costs are $850,000 and variable costs are 60% of sales, the break-even point (dollars) is

Gladstorm Enterprises sells a product for $60 per unit. The variable cost is $20 per unit, while fixed costs are $85,000. Determine the (a) break-even point in sales units and (b) break-even point in sales units if the selling price increased to $80 per unit. Round your answer to the nearest whole number.

When a business sells more than one product at varying selling prices, the business's break-even point can be determined as long as

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 60%.

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

If a business sells two products, it is not possible to estimate the break-even point.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

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. -Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Safari Co. sells two products: Orks and Zins. Last year, Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are as follows: Determine the following: a. Safari Co.'s sales mix b. Safari Co.'s unit selling price of E c. Safari Co.'s unit contribution margin of E d. Safari Co.'s break-even sales in units of E assuming that last year's fixed costs were $160,000

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Cotton and polyester cloth A)Variable cost B)Fixed cost C)Mixed cost

If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, the break-even sales (units) if fixed costs are increased by $80,000 is

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

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. -Per-unit cost of plant superintendent's salary A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Carrolton, Inc., currently sells widgets for $80 per unit. The variable cost is $30 per unit, and total fixed costs equal $240,000 per year. Sales are currently 20,000 units annually.​ The company is considering a 20% drop in selling price that it believes will raise units sold by 20%. Assuming all costs stay the same, what is the impact on income if this change is made?

A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000. a.What is the break-even point in sales dollars? b.What is the operating income? c.If neither the relationship between variable costs and sales nor the amount of fixed costs is expected to change in the next year, how much additional operating income can be earned by increasing sales by $110,000?