Question 1

In an absorption costing income statement,all manufacturing costs are deducted to get to gross margin.

Accepted Answer

A) True 
 B)False

Question 2

The ratio of fixed expenses to the unit contribution margin is the:

Accepted Answer

A)  break-even point in unit sales. 
B)  profit margin. 
C)  contribution margin ratio. 
D)  margin of safety. 
A)  break-even point in unit sales. 
B)  profit margin. 
C)  contribution margin ratio. 
D)  margin of safety.

Question 3

The following is last month's contribution format income statement:   What is the company's margin of safety percentage?

Accepted Answer

A)  17%. 
B)  20%. 
C)  40%. 
D)  42%. 
A)  17%. 
B)  20%. 
C)  40%. 
D)  42%.

Question 4

A company increased the selling price for its product from $1.00 to $1.10 a unit when total fixed expenses increased from $400,000 to $480,000 and variable expense per unit remained unchanged.How would these changes affect the break-even point?

Accepted Answer

A)  The break-even point in units would increase. 
B)  The break-even point in units would decrease. 
C)  The break-even point in units would remain unchanged. 
D)  The effect cannot be determined from the information given. 
A)  The break-even point in units would increase. 
B)  The break-even point in units would decrease. 
C)  The break-even point in units would remain unchanged. 
D)  The effect cannot be determined from the information given.

Question 5

At the break-even point: Sales - Variable expenses = Fixed expenses.

Accepted Answer

A) True 
 B)False

Question 6

Oates Tannery sells boxes of leather for $160.The unit variable cost per case is $80 plus commission of 10%.Fixed manufacturing costs total $2,000 per month,while fixed selling and administrative costs total $4,016.
What is the breakeven point in boxes?

Accepted Answer

Let X = breakeven cases
$160X

Question 7

In CVP analysis there is an assumption that selling prices of products or services will change as volumes change.

Accepted Answer

A) True 
 B)False

Question 8

What is the company's break-even sales in dollars?

Accepted Answer

A)  $0. 
B)  $400,000. 
C)  $640,000. 
D)  $700,000. 
A)  $0. 
B)  $400,000. 
C)  $640,000. 
D)  $700,000.

Question 9

In the current year,the company sold 43,000 units.Due to competition,management will be forced to lower the selling price by 10% next year.How many units must be sold next year to earn the same income as was earned in the current year?

Accepted Answer

A)  50,000 units. 
B)  53,200 units. 
C)  58,800 units. 
D)  60,200 units. 
A)  50,000 units. 
B)  53,200 units. 
C)  58,800 units. 
D)  60,200 units.

Question 10

If sales increase by 100 units,by how much should net income increase?

Accepted Answer

A)  $400. 
B)  $1,500. 
C)  $2,500. 
D)  $4,800. 
A)  $400. 
B)  $1,500. 
C)  $2,500. 
D)  $4,800.

Question 11

How many units would the company have to sell to attain target profits of $150,000?

Accepted Answer

A)  22,000 units. 
B)  25,000 units. 
C)  26,667 units. 
D)  37,500 units. 
A)  22,000 units. 
B)  25,000 units. 
C)  26,667 units. 
D)  37,500 units.

Question 12

How many units would the company have to sell to attain target profits of $120,000?

Accepted Answer

A)  10,400 units. 
B)  10,800 units. 
C)  11,200 units. 
D)  12,000 units. 
A)  10,400 units. 
B)  10,800 units. 
C)  11,200 units. 
D)  12,000 units.

Question 13

If sales increase by 200 units,by how much should net income increase?

Accepted Answer

A)  $2,000. 
B)  $5,000. 
C)  $6,000. 
D)  $10,000. 
A)  $2,000. 
B)  $5,000. 
C)  $6,000. 
D)  $10,000.

Question 14

The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 15

A company with a degree of operating leverage of 4 would expect net income to increase by 200% if sales increased from $100,000 to $150,000.

Accepted Answer

A) True 
 B)False

Question 16

What is the company's degree of operating leverage? (round your final answer to two decimal places. )

Accepted Answer

A)  0.12. 
B)  0.40. 
C)  2.50. 
D)  3.30. 
A)  0.12. 
B)  0.40. 
C)  2.50. 
D)  3.30.

Question 17

In determining the selling price of a special order that can be completed using existing capacity,the fixed costs per unit should be included in the consideration of the costs of the special order.

Accepted Answer

A) True 
 B)False

Question 18

At a break-even point of 800 units sold,White Company's variable expenses are $8,000 and its fixed expenses are $4,000.What will the Company's net income be at a volume of 801 units?

Accepted Answer

A)  $5. 
B)  $10. 
C)  $15. 
D)  $20. 
A)  $5. 
B)  $10. 
C)  $15. 
D)  $20.

Question 19

Using variable costing,what is the contribution margin per unit for January?

Accepted Answer

A)  $33.50. 
B)  $38.50. 
C)  $41.00. 
D)  $42.00. 
A)  $33.50. 
B)  $38.50. 
C)  $41.00. 
D)  $42.00.

Question 20

The break-even point in annual sales dollars is:

Accepted Answer

A)  $350,000. 
B)  $400,000. 
C)  $460,000. 
D)  $530,000. 
A)  $350,000. 
B)  $400,000. 
C)  $460,000. 
D)  $530,000.

In an absorption costing income statement,all manufacturing costs are deducted to get to gross margin.

The ratio of fixed expenses to the unit contribution margin is the:

The following is last month's contribution format income statement: What is the company's margin of safety percentage?

A company increased the selling price for its product from $1.00 to $1.10 a unit when total fixed expenses increased from $400,000 to $480,000 and variable expense per unit remained unchanged.How would these changes affect the break-even point?

At the break-even point: Sales - Variable expenses = Fixed expenses.

Oates Tannery sells boxes of leather for $160.The unit variable cost per case is $80 plus commission of 10%.Fixed manufacturing costs total $2,000 per month,while fixed selling and administrative costs total $4,016. What is the breakeven point in boxes?

In CVP analysis there is an assumption that selling prices of products or services will change as volumes change.

What is the company's break-even sales in dollars?

In the current year,the company sold 43,000 units.Due to competition,management will be forced to lower the selling price by 10% next year.How many units must be sold next year to earn the same income as was earned in the current year?

If sales increase by 100 units,by how much should net income increase?

How many units would the company have to sell to attain target profits of $150,000?

How many units would the company have to sell to attain target profits of $120,000?

If sales increase by 200 units,by how much should net income increase?

The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin ratio.

A company with a degree of operating leverage of 4 would expect net income to increase by 200% if sales increased from $100,000 to $150,000.

What is the company's degree of operating leverage? (round your final answer to two decimal places. )

In determining the selling price of a special order that can be completed using existing capacity,the fixed costs per unit should be included in the consideration of the costs of the special order.

At a break-even point of 800 units sold,White Company's variable expenses are $8,000 and its fixed expenses are $4,000.What will the Company's net income be at a volume of 801 units?

Using variable costing,what is the contribution margin per unit for January?

The break-even point in annual sales dollars is:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

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Exam 8: Standard Costs

In an absorption costing income statement,all manufacturing costs are deducted to get to gross margin.

The ratio of fixed expenses to the unit contribution margin is the:

The following is last month's contribution format income statement: What is the company's margin of safety percentage?

A company increased the selling price for its product from $1.00 to $1.10 a unit when total fixed expenses increased from $400,000 to $480,000 and variable expense per unit remained unchanged.How would these changes affect the break-even point?

At the break-even point: Sales - Variable expenses = Fixed expenses.

Oates Tannery sells boxes of leather for $160.The unit variable cost per case is $80 plus commission of 10%.Fixed manufacturing costs total $2,000 per month,while fixed selling and administrative costs total $4,016. What is the breakeven point in boxes?

In CVP analysis there is an assumption that selling prices of products or services will change as volumes change.

What is the company's break-even sales in dollars?

In the current year,the company sold 43,000 units.Due to competition,management will be forced to lower the selling price by 10% next year.How many units must be sold next year to earn the same income as was earned in the current year?

If sales increase by 100 units,by how much should net income increase?

How many units would the company have to sell to attain target profits of $150,000?

How many units would the company have to sell to attain target profits of $120,000?

If sales increase by 200 units,by how much should net income increase?

The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin ratio.

A company with a degree of operating leverage of 4 would expect net income to increase by 200% if sales increased from $100,000 to $150,000.

What is the company's degree of operating leverage? (round your final answer to two decimal places. )

In determining the selling price of a special order that can be completed using existing capacity,the fixed costs per unit should be included in the consideration of the costs of the special order.

At a break-even point of 800 units sold,White Company's variable expenses are $8,000 and its fixed expenses are $4,000.What will the Company's net income be at a volume of 801 units?

Using variable costing,what is the contribution margin per unit for January?

The break-even point in annual sales dollars is:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Cost-Volume-Profit Relationships

Profit Planning

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Filters