Exam 7: Cost-Volume-Profit Analysis

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $45 per unit with variable costs of $30 per unit. Plaid models sell for $50 per unit with variable costs of $25 per unit. Total fixed costs for the company are $19,950. Mayfield Company typically sells two Blue models for every three Plaid models. What is the breakeven point in total units?

Spice Company has a product which sells for $150 and has a unit contribution margin of $75. It has fixed costs of $35/unit at the current production volume. Spice Company's contribution margin ratio is

A company that sells one product would be more likely to calculate breakeven in terms of sales units, rather than sales revenue.

If the selling price per unit is $10, the unit contribution margin is $5, and total fixed expenses are $15,000, what are the breakeven sales in units?

Assume the following amounts: If sales revenue per unit increases to $22 and 12,000 units are sold, what is the operating income?

A company's margin of safety is computed as

Given breakeven sales in units of 45,000 and a unit contribution margin of $4, how many units must be sold to reach a target operating income of $18,000?

All else being equal, a company earns more income by selling high-contribution margin products than by selling an equal number of low-contribution margin products.

The selling price of a particular product is $85.00 per unit, the variable expense is $49.00 per unit, and the breakeven sales in dollars is $340,000, what are total fixed expenses?

Moe's Pizza Shop sells a large pizza for $11.50. Unit variable expenses total $5.50. The breakeven sales in units is 5,000 and budgeted sales in units is 9,500. What is the margin of safety in dollars?

Matthew's Fish Fry has a monthly target operating income of $7,200. Variable expenses are 60% of sales and monthly fixed expenses are $1,800. What is the monthly margin of safety as a percentage of target sales in dollars?

Given breakeven sales in units of 34,000 and a unit contribution margin of $5, how many units must be sold to reach a target operating income of $8,000?

Gabe Industries sells two products, Basic models and Deluxe models. Basic models sell for $42 per unit with variable costs of $30 per unit. Deluxe models sell for $50 per unit with variable costs of $40 per unit. Total fixed costs for the company are $75,400. Gabe Industries typically sells four Basic models for every Deluxe model. What is the breakeven point in total units?

Washington Bottling Company provides the following information about its single product. What is the breakeven point in units?

The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. What are breakeven sales in dollars?

Moe's Garage management has budgeted the following amounts for its next fiscal year: If Moe's can reduce fixed expenses by $20,000, by how much can variable expenses per unit increase and still allow the company to maintain the original breakeven sales in units?

The unit contribution margin is computed by

If the variable cost per unit decreases while the sales price per unit and total fixed costs remain constant, which of the following statements is true?

Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $3.75, variable costs are $1.25 per dozen, and total fixed costs are $750.00. What are breakeven sales in dollars?

The sales mix cannot significantly affect CVP relationships.