Question 1

In CVP analysis, focusing on target net income rather than operating income ________.

Accepted Answer

A)  will increase the breakeven point 
B)  will decrease the breakeven point 
C)  will not change the breakeven point 
D)  will help managers construct a better capital policy 
A)  will increase the breakeven point 
B)  will decrease the breakeven point 
C)  will not change the breakeven point 
D)  will help managers construct a better capital policy

Question 2

Answer the following questions using the information below:
The following information is for the Jeffries Corporation:
  
-Assume the sales mix consists of three units of Product A and one unit of Product B. If the sales mix shifts to four units of Product A and one unit of Product B, then the weighted-average contribution margin will ________.

Accepted Answer

A)  increase per unit 
B)  stay the same 
C)  decrease per unit 
D)  cannot be determined from this information 
A)  increase per unit 
B)  stay the same 
C)  decrease per unit 
D)  cannot be determined from this information

Question 3

Breakeven point in units is ________.

Accepted Answer

A)  total costs divided by profit margin per unit 
B)  contribution margin per unit divided by total cost per unit 
C)  fixed costs divided by contribution margin per unit 
D)  the sum of fixed and variable costs divided by contribution margin per unit 
A)  total costs divided by profit margin per unit 
B)  contribution margin per unit divided by total cost per unit 
C)  fixed costs divided by contribution margin per unit 
D)  the sum of fixed and variable costs divided by contribution margin per unit

Question 4

Contribution margin percentage equals the unit contribution margin divided by the selling price.

Accepted Answer

A) True 
 B)False

Question 5

In 2017, Craylon Company has sales of $1,000,000, variable costs of $250,000, and fixed costs of $200,000. In 2018, the company expects annual property taxes to decrease by $15,000.
Required:
a.Calculate operating income and the breakeven point for 2017.
b.Calculate the breakeven point for 2018.

Accepted Answer

a.In 2017, operating income is $1,000,00

Question 6

If unit outputs exceed the breakeven point ________.

Accepted Answer

A)  there will be an increase in fixed costs 
B)  total sales revenue will exceed fixed costs 
C)  total sales revenue will exceed variable costs 
D)  there will be a profit 
A)  there will be an increase in fixed costs 
B)  total sales revenue will exceed fixed costs 
C)  total sales revenue will exceed variable costs 
D)  there will be a profit

Question 7

Globus Autos sells a single product. 8,000 units were sold resulting in $83,000 of sales revenue, $21,000 of variable costs, and $10,000 of fixed costs. If Globus reduces the selling price by $1.20 per unit, the new margin of safety is:

Accepted Answer

A)  6,911 units 
B)  3,042 units 
C)  4,958 units 
D)  8,000 units 
A)  6,911 units 
B)  3,042 units 
C)  4,958 units 
D)  8,000 units

Question 8

In the manufacturing sector, ________.

Accepted Answer

A)  only variable costs are subtracted to determine gross margin 
B)  fixed overhead costs are subtracted to determine gross margin 
C)  fixed overhead costs are subtracted to determine contribution margin 
D)  all operating costs are subtracted to determine contribution margin 
A)  only variable costs are subtracted to determine gross margin 
B)  fixed overhead costs are subtracted to determine gross margin 
C)  fixed overhead costs are subtracted to determine contribution margin 
D)  all operating costs are subtracted to determine contribution margin

Question 9

A revenue driver is a variable, such as volume, that causally affects revenues.

Accepted Answer

A) True 
 B)False

Question 10

Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of variable costs, and $350,000 of fixed costs. The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

Accepted Answer

A)  151 units 
B)  104 units 
C)  79 units 
D)  130 units 
A)  151 units 
B)  104 units 
C)  79 units 
D)  130 units

Question 11

Slickware sells porcelain cups. The breakeven point is 5,000 units. The variable cost per unit is $12 and the fixed costs are $20,000. What is the selling price?

Accepted Answer

A)  $16 
B)  $24 
C)  $28 
D)  $20 
A)  $16 
B)  $24 
C)  $28 
D)  $20

In CVP analysis, focusing on target net income rather than operating income ________.

Breakeven point in units is ________.

Contribution margin percentage equals the unit contribution margin divided by the selling price.

In 2017, Craylon Company has sales of $1,000,000, variable costs of $250,000, and fixed costs of $200,000. In 2018, the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2017. b.Calculate the breakeven point for 2018.

If unit outputs exceed the breakeven point ________.

Globus Autos sells a single product. 8,000 units were sold resulting in $83,000 of sales revenue, $21,000 of variable costs, and $10,000 of fixed costs. If Globus reduces the selling price by $1.20 per unit, the new margin of safety is:

In the manufacturing sector, ________.

A revenue driver is a variable, such as volume, that causally affects revenues.

Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of variable costs, and $350,000 of fixed costs. The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

Slickware sells porcelain cups. The breakeven point is 5,000 units. The variable cost per unit is $12 and the fixed costs are $20,000. What is the selling price?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 3: Cost-Volume-Profit Analysis

In CVP analysis, focusing on target net income rather than operating income ________.

Breakeven point in units is ________.

Contribution margin percentage equals the unit contribution margin divided by the selling price.

In 2017, Craylon Company has sales of $1,000,000, variable costs of $250,000, and fixed costs of $200,000. In 2018, the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2017. b.Calculate the breakeven point for 2018.

If unit outputs exceed the breakeven point ________.

Globus Autos sells a single product. 8,000 units were sold resulting in $83,000 of sales revenue, $21,000 of variable costs, and $10,000 of fixed costs. If Globus reduces the selling price by $1.20 per unit, the new margin of safety is:

In the manufacturing sector, ________.

A revenue driver is a variable, such as volume, that causally affects revenues.

Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of variable costs, and $350,000 of fixed costs. The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

Slickware sells porcelain cups. The breakeven point is 5,000 units. The variable cost per unit is $12 and the fixed costs are $20,000. What is the selling price?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters