Exam 12: Budgetary Planning

O'Malley Company sells 100000 units for $13 a unit.Fixed costs are $350000 and net income is $250000.What should be reported as variable expenses in the CVP income statement?

The following monthly data are available for Lumberyard Company which produces only one product: Selling price per unit $42; Unit variable expenses $14; Total fixed expenses $42000; Actual sales for the month of June 3000 units.How much is the margin of safety for the company for June?

For purposes of CVP analysis mixed costs must be classified into their fixed and variable elements.

An activity index identifies the activity that has a causal relationship with a particular cost.

A fixed cost is a cost which

Gribble Company's high and low level of activity last year was 60000 units of product produced in May and 20000 units produced in November.Machine maintenance costs were $156000 in May and $60000 in November.Using the high-low method determine an estimate of total maintenance cost for a month in which production is expected to be 45000 units.

If the unit contribution margin is $1 and unit sales are 10000 units above the break-even volume then net income will be $10000.

The high-low method is used in classifying a mixed cost into its variable and fixed elements.

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

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

Cost behavior analysis is a study of how a firm's costs

Hayduke Corporation reported the following results from the sale of 5000 units in May: sales $300000 variable costs $180000 fixed costs $90000 and net income $30000.Assume that Hayduke increases the selling price by 5% on June 1.How many units will have to be sold in June to maintain the same level of net income?

The relevant range of activity is the activity level where the firm will earn income.

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 $4800.If Lansbury sells 30 more units beyond breakeven how much does profit increase as a result?

Which of the following would be the least controllable fixed costs?

For an activity base to be useful in cost behavior analysis

Required sales in dollars to meet a target net income is computed by dividing

Nelson Manufacturing has the following data: Variable costs are 60% of the unit selling price. The contribution margin ratio is 40%. The unit contribution margin is $500. The fixed costs are $500000. Which of the following does not express the break-even point?

A mixed cost has both selling and administrative cost elements.

Weatherspoon Company has a product with a selling price per unit of $200 the unit variable cost is $110 and the total monthly fixed costs are $300000.How much is Weatherspoon's contribution margin ratio?