Question 1

The degree of operating leverage for July is:

Accepted Answer

A)  the same as that for June. 
B)  higher than that for June. 
C)  lower than that for June. 
D)  not determinable. 
A)  the same as that for June. 
B)  higher than that for June. 
C)  lower than that for June. 
D)  not determinable.

Question 2

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

Accepted Answer

A)  $100,000. 
B)  $250,000. 
C)  $600,000. 
D)  $1,500,000. 
A)  $100,000. 
B)  $250,000. 
C)  $600,000. 
D)  $1,500,000.

Question 3

The following is last month's contribution format income statement:   What is the company's degree of operating leverage?

Accepted Answer

A)  0.125. 
B)  0.333. 
C)  3.000. 
D)  8.000. 
A)  0.125. 
B)  0.333. 
C)  3.000. 
D)  8.000.

Question 4

Green Company's variable expenses are 75% of sales.At a sales level of $400,000,the company's degree of operating leverage is 8.At this sales level,fixed expenses equal?

Accepted Answer

A)  $50,000. 
B)  $75,000. 
C)  $87,500. 
D)  $100,000. 
A)  $50,000. 
B)  $75,000. 
C)  $87,500. 
D)  $100,000.

Question 5

Once the break-even point is reached,which of the following statements is true?

Accepted Answer

A)  The total contribution margin changes from negative to positive. 
B)  Net income will increase by the unit contribution margin for each additional item sold. 
C)  Variable expenses will remain constant in total. 
D)  The contribution margin ratio begins to decrease. 
A)  The total contribution margin changes from negative to positive. 
B)  Net income will increase by the unit contribution margin for each additional item sold. 
C)  Variable expenses will remain constant in total. 
D)  The contribution margin ratio begins to decrease.

Question 6

The operating leverage is:

Accepted Answer

A)  0.33. 
B)  3.00. 
C)  5.00. 
D)  8.00. 
A)  0.33. 
B)  3.00. 
C)  5.00. 
D)  8.00.

Question 7

Austin Manufacturing had the following operating data for the year just ended.   Management plans to improve the quality of its only product by: (1)replacing a component that costs $3.50 with a higher-grade component that costs $5.50 and (2)renting a packing machine for $18,000 a year.If the desired target profit is $288,000,how many units must the company sell?

Accepted Answer

A)  19,300 units. 
B)  20,842 units. 
C)  21,316 units. 
D)  22,500 units. 
A)  19,300 units. 
B)  20,842 units. 
C)  21,316 units. 
D)  22,500 units.

Question 8

The break-even point in sales dollars for Rice Company is $360,000 and the company's contribution margin ratio is 30%.If Rice Company desires an income of $84,000,sales would have to total?

Accepted Answer

A)  $280,000. 
B)  $480,000. 
C)  $560,000. 
D)  $640,000. 
A)  $280,000. 
B)  $480,000. 
C)  $560,000. 
D)  $640,000.

Question 9

The unit contribution margin per book is:

Accepted Answer

A)  $8.30. 
B)  $10.30. 
C)  $10.80. 
D)  $14.30. 
A)  $8.30. 
B)  $10.30. 
C)  $10.80. 
D)  $14.30.

Question 10

Tanner Company's most recent contribution format income statement is presented below:

Accepted Answer

@#IMG-DLM& 
The company sells its only product for

Question 11

The following data pertain to last month's operations:   The break-even point in dollars is:

Accepted Answer

A)  $6,000. 
B)  $7,500. 
C)  $11,250. 
D)  $18,000. 
A)  $6,000. 
B)  $7,500. 
C)  $11,250. 
D)  $18,000.

Question 12

A shift in the sales mix from products with a low contribution margin ratio toward products with a high contribution margin ratio will lower the break-even point in the company as a whole.

Accepted Answer

A) True 
 B)False

Question 13

Goodman Company has sales of 3,000 units at $80 per unit.Variable costs are 35% of the sales price.If total fixed costs are $66,000,the degree of operating leverage is? (Round final your answer to two decimal places. )

Accepted Answer

A)  0.79. 
B)  0.93. 
C)  1.73. 
D)  2.67. 
A)  0.79. 
B)  0.93. 
C)  1.73. 
D)  2.67.

Question 14

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will tend to be lower in the company with a higher proportion of fixed expenses in its cost structure.

Accepted Answer

A) True 
 B)False

Question 15

What was the division's total contribution margin?

Accepted Answer

A)  $60,000. 
B)  $150,000. 
C)  $180,000. 
D)  $250,000. 
A)  $60,000. 
B)  $150,000. 
C)  $180,000. 
D)  $250,000.

Question 16

For a given level of sales,a low contribution margin ratio will produce less net income than a high contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 17

The break-even point in unit sales increases when variable expenses:

Accepted Answer

A)  increase and the selling price remains unchanged. 
B)  decrease and the selling price remains unchanged. 
C)  decrease and the selling price increases. 
D)  remain unchanged and the selling price increases. 
A)  increase and the selling price remains unchanged. 
B)  decrease and the selling price remains unchanged. 
C)  decrease and the selling price increases. 
D)  remain unchanged and the selling price increases.

Question 18

If total units sold remain unchanged,but the sales mix shifts more heavily toward Product C,one would expect the overall contribution margin ratio to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  none of these. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  none of these.

Question 19

The formula for the break-even point is the same as the formula to attain a given target profit for the special case where the target profit is zero.

Accepted Answer

A) True 
 B)False

Question 20

In a CVP graph,the break-even point is determined as the point that the total revenue line intersects with the total fixed expenses line.

Accepted Answer

A) True 
 B)False

The degree of operating leverage for July is:

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

The following is last month's contribution format income statement: What is the company's degree of operating leverage?

Green Company's variable expenses are 75% of sales.At a sales level of $400,000,the company's degree of operating leverage is 8.At this sales level,fixed expenses equal?

Once the break-even point is reached,which of the following statements is true?

The operating leverage is:

The break-even point in sales dollars for Rice Company is $360,000 and the company's contribution margin ratio is 30%.If Rice Company desires an income of $84,000,sales would have to total?

The unit contribution margin per book is:

Tanner Company's most recent contribution format income statement is presented below:

The following data pertain to last month's operations: The break-even point in dollars is:

A shift in the sales mix from products with a low contribution margin ratio toward products with a high contribution margin ratio will lower the break-even point in the company as a whole.

Goodman Company has sales of 3,000 units at $80 per unit.Variable costs are 35% of the sales price.If total fixed costs are $66,000,the degree of operating leverage is? (Round final your answer to two decimal places. )

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will tend to be lower in the company with a higher proportion of fixed expenses in its cost structure.

What was the division's total contribution margin?

For a given level of sales,a low contribution margin ratio will produce less net income than a high contribution margin ratio.

The break-even point in unit sales increases when variable expenses:

If total units sold remain unchanged,but the sales mix shifts more heavily toward Product C,one would expect the overall contribution margin ratio to:

The formula for the break-even point is the same as the formula to attain a given target profit for the special case where the target profit is zero.

In a CVP graph,the break-even point is determined as the point that the total revenue line intersects with the total fixed expenses line.

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

The degree of operating leverage for July is:

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

The following is last month's contribution format income statement: What is the company's degree of operating leverage?

Green Company's variable expenses are 75% of sales.At a sales level of $400,000,the company's degree of operating leverage is 8.At this sales level,fixed expenses equal?

Once the break-even point is reached,which of the following statements is true?

The operating leverage is:

The break-even point in sales dollars for Rice Company is $360,000 and the company's contribution margin ratio is 30%.If Rice Company desires an income of $84,000,sales would have to total?

The unit contribution margin per book is:

Tanner Company's most recent contribution format income statement is presented below:

The following data pertain to last month's operations: The break-even point in dollars is:

A shift in the sales mix from products with a low contribution margin ratio toward products with a high contribution margin ratio will lower the break-even point in the company as a whole.

Goodman Company has sales of 3,000 units at $80 per unit.Variable costs are 35% of the sales price.If total fixed costs are $66,000,the degree of operating leverage is? (Round final your answer to two decimal places. )

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will tend to be lower in the company with a higher proportion of fixed expenses in its cost structure.

What was the division's total contribution margin?

For a given level of sales,a low contribution margin ratio will produce less net income than a high contribution margin ratio.

The break-even point in unit sales increases when variable expenses:

If total units sold remain unchanged,but the sales mix shifts more heavily toward Product C,one would expect the overall contribution margin ratio to:

The formula for the break-even point is the same as the formula to attain a given target profit for the special case where the target profit is zero.

In a CVP graph,the break-even point is determined as the point that the total revenue line intersects with the total fixed expenses line.

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