Question 1

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

Accepted Answer

A)  45% 
B)  55% 
C)  62% 
D)  32% 
A)  45% 
B)  55% 
C)  62% 
D)  32%

Question 2

Which of the following costs is a mixed cost?

Accepted Answer

A)  salary of a factory supervisor 
B)  electricity costs of $3 per kilowatt-hour 
C)  rental costs of $10,000 per month plus $0.30 per machine hour of use 
D)  straight-line depreciation on factory equipment 
A)  salary of a factory supervisor 
B)  electricity costs of $3 per kilowatt-hour 
C)  rental costs of $10,000 per month plus $0.30 per machine hour of use 
D)  straight-line depreciation on factory equipment

Question 3

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

Accepted Answer

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

Question 4

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Accepted Answer

A) True 
 B)False

Question 5

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (units) if the variable costs are decreased by $2?

Accepted Answer

A)  2,127 
B)  1,114 
C)  2,340 
D)  1,950 
A)  2,127 
B)  1,114 
C)  2,340 
D)  1,950

Question 6

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

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 7

The Rocky Company reports the following data:  
Rocky Company's operating leverage is

Accepted Answer

A)  6.7 
B)  2.7 
C)  1.0 
D)  1.3 
A)  6.7 
B)  2.7 
C)  1.0 
D)  1.3

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and anticipated break-even 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.

Accepted Answer

(a) $60,000/($X - $7

Question 10

Global Publishers has collected the following data for recent months: 
Month                         Issues published             Total cost 
March                                 20,500                       $20,960 
April                                   21,800                         22,464 
May                                    17,750                         18,495 
June                                    21,200                         21,395 
Required: 
(a) Using the high-low method, find variable cost per unit, total fixed costs, and the total cost equation. 
(b) What is the estimated cost for a month in which 19,000 issues are published?

Accepted Answer

(a) Variable cost per unit = ($22,464 -

Question 11

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs 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 12

Given the following cost and activity observations for George Company's utilities, use the high-low method to calculate George's variable utilities costs per machine hour.

Accepted Answer

A)  $100.00 
B)  $1.00 
C)  $10.00 
D)  $0.10 
A)  $100.00 
B)  $1.00 
C)  $10.00 
D)  $0.10

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of a cost that varies in total as the number of units produced changes?

Accepted Answer

A)  salary of a production supervisor 
B)  direct materials cost 
C)  property taxes on factory buildings 
D)  straight-line depreciation on factory equipment 
A)  salary of a production supervisor 
B)  direct materials cost 
C)  property taxes on factory buildings 
D)  straight-line depreciation on factory equipment

Question 15

The contribution margin ratio is

Accepted Answer

A)  the same as the variable cost ratio 
B)  the same as profit 
C)  the portion of equity contributed by the stockholders 
D)  the same as the profit-volume ratio 
A)  the same as the variable cost ratio 
B)  the same as profit 
C)  the portion of equity contributed by the stockholders 
D)  the same as the profit-volume ratio

Question 16

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

Accepted Answer

A) True 
 B)False

Question 19

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)?

Accepted Answer

A)  12,800 units 
B)  4,571 units 
C)  16,000 units 
D)  7,111 units 
A)  12,800 units 
B)  4,571 units 
C)  16,000 units 
D)  7,111 units

Question 20

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

Accepted Answer

A)  10,545 units 
B)  19,333 units 
C)  23,200 units 
D)  25,000 units 
A)  10,545 units 
B)  19,333 units 
C)  23,200 units 
D)  25,000 units

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

Which of the following costs is a mixed cost?

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

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (units) if the variable costs are decreased by $2?

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

The Rocky Company reports the following data: Rocky Company's operating leverage is

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

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

Given the following cost and activity observations for George Company's utilities, use the high-low method to calculate George's variable utilities costs per machine hour.

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

Which of the following is an example of a cost that varies in total as the number of units produced changes?

The contribution margin ratio is

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

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

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)?

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

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

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

Statement of Cash Flows

Financial Statement Analysis

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Exam 5: Cost Volume Profit Analysis

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

Which of the following costs is a mixed cost?

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

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (units) if the variable costs are decreased by $2?

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

The Rocky Company reports the following data: Rocky Company's operating leverage is

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

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

Given the following cost and activity observations for George Company's utilities, use the high-low method to calculate George's variable utilities costs per machine hour.

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

Which of the following is an example of a cost that varies in total as the number of units produced changes?

The contribution margin ratio is

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

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

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)?

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

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

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

Statement of Cash Flows

Financial Statement Analysis

Filters