Question 1

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Accepted Answer

A)  decrease 
B)  increase 
C)  remain the same 
D)  increase or decrease, depending upon the percentage increase in utility rates 
A)  decrease 
B)  increase 
C)  remain the same 
D)  increase or decrease, depending upon the percentage increase in utility rates

Question 2

Which of the following statements is true regarding fixed and variable costs?

Accepted Answer

A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total, and variable costs are constant per unit. 
D)  Variable costs are constant in total, and fixed costs vary in total. 
A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total, and variable costs are constant per unit. 
D)  Variable costs are constant in total, and fixed costs vary in total.

Question 3

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 4

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:   What was Rusty Co.'s unit variable cost of E?

Accepted Answer

A)  $52.50 
B)  $70.00 
C)  $120.00 
D)  $50.00 
A)  $52.50 
B)  $70.00 
C)  $120.00 
D)  $50.00

Question 5

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

Accepted Answer

A)  66,000 
B)  70,125 
C)  74,800 
D)  60,000 
A)  66,000 
B)  70,125 
C)  74,800 
D)  60,000

Question 6

The range of activity over which changes in cost are of interest to management is called the relevant range.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

($600,000 - $400,000

Question 8

Given the following cost data, what type of cost is shown?

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 9

Match between columns
                        Premises: The relative distribution of sales among products sold by a company
Indicates the possible decrease in sales that may occur before operating loss results
Contribution margin divided by income from operations
Graphically shows costs, sales, and operating profit or loss at various levels of units sold
Plots only the difference between total sales and total costs

Accepted Answer

The Answer of Sales mix and Profit-volume chart and Operating is...

Question 10

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.   
The sales mix for product X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Accepted Answer

Unit contribution margin of sa

Question 11

Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are:   What was Carter Co.'s unit contribution margin of E?

Accepted Answer

A)  $24 
B)  $60 
C)  $92 
D)  $20 
A)  $24 
B)  $60 
C)  $92 
D)  $20

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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?

Accepted Answer

(a) Margin of safety = $1,000,000 × 25%

Question 14

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

Accepted Answer

A) True 
 B)False

Question 15

This question has been removed by Cengage as inapplicable.

Accepted Answer

A) True 
 B)False

Question 16

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Accepted Answer

A) True 
 B)False

Question 17

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

Accepted Answer

A)  $140,000 
B)  $(30,000) 
C)  $370,000 
D)  $670,000 
A)  $140,000 
B)  $(30,000) 
C)  $370,000 
D)  $670,000

Question 18

In cost-volume-profit analysis, all costs are classified into the following two categories:

Accepted Answer

A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs 
A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs

Question 19

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following describes the behavior of a variable cost per unit?

Accepted Answer

A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level 
A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Which of the following statements is true regarding fixed and variable costs?

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

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: What was Rusty Co.'s unit variable cost of E?

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

The range of activity over which changes in cost are of interest to management is called the relevant range.

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

Given the following cost data, what type of cost is shown?

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for product X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s unit contribution margin of E?

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

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

This question has been removed by Cengage as inapplicable.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

In cost-volume-profit analysis, all costs are classified into the following two categories:

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Which of the following describes the behavior of a variable cost per unit?

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 variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Which of the following statements is true regarding fixed and variable costs?

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

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: What was Rusty Co.'s unit variable cost of E?

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

The range of activity over which changes in cost are of interest to management is called the relevant range.

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

Given the following cost data, what type of cost is shown?

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for product X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s unit contribution margin of E?

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

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

This question has been removed by Cengage as inapplicable.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

In cost-volume-profit analysis, all costs are classified into the following two categories:

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Which of the following describes the behavior of a variable cost per unit?

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