Question 1

The break-even point is that level of activity where:

Accepted Answer

A) variable cost equals fixed cost. 
B) contribution margin equals fixed cost. 
C) total contribution margin equals the sum of variable cost plus fixed cost. 
D) sales revenue equals total variable cost. 
E) sales revenue equals fixed cost. 
A) variable cost equals fixed cost. 
B) contribution margin equals fixed cost. 
C) total contribution margin equals the sum of variable cost plus fixed cost. 
D) sales revenue equals total variable cost. 
E) sales revenue equals fixed cost.

Question 2

Assuming that the sales mix remains constant,the number of units of Plain that Jamal must sell to break even is:

Accepted Answer

A) 2,000. 
B) 3,000. 
C) 3,375. 
D) 5,000. 
E) 5,625. 
A) 2,000. 
B) 3,000. 
C) 3,375. 
D) 5,000. 
E) 5,625.

Question 3

Brooklyn sells a single product to wholesalers.The company's budget for the upcoming year revealed anticipated unit sales of 31,600,a selling price of $20,variable cost per unit of $8,and total fixed costs of $360,000.If Brooklyn's unit sales are 300 units more than anticipated,its break-even point will:

Accepted Answer

A) increase by $12 per unit sold. 
B) decrease by $12 per unit sold. 
C) increase by $8 per unit sold. 
D) decrease by $8 per unit solD. 
E) not changE. 
A) increase by $12 per unit sold. 
B) decrease by $12 per unit sold. 
C) increase by $8 per unit sold. 
D) decrease by $8 per unit solD. 
E) not changE.

Question 4

Barrey,Inc.is subject to a 40% income tax rate.The following data pertain to the period just ended when the company produced and sold 45,000 units:  
How many units must Barrey sell to earn an after-tax profit of $180,000?

Accepted Answer

A) 42,000. 
B) 45,000. 
C) 51,000. 
D) 61,000. 
E) An amount other than those abovE. 
A) 42,000. 
B) 45,000. 
C) 51,000. 
D) 61,000. 
E) An amount other than those abovE.

Question 5

The break-even point is that level of activity where total revenue equals total cost.

Accepted Answer

A) True 
 B)False

Question 6

The weighted-average unit contribution margin is:

Accepted Answer

A) $4.80. 
B) $9.00. 
C) $9.25. 
D) $17.00. 
E) an amount other than those abovE. 
A) $4.80. 
B) $9.00. 
C) $9.25. 
D) $17.00. 
E) an amount other than those abovE.

Question 7

O'Dale sells three products: R,S,and T.Budgeted information for the upcoming accounting period follows.  
The company's weighted-average unit contribution margin is:

Accepted Answer

A) $3.00. 
B) $3.55. 
C) $4.00. 
D) $19.35. 
E) an amount other than those abovE. 
A) $3.00. 
B) $3.55. 
C) $4.00. 
D) $19.35. 
E) an amount other than those abovE.

Question 8

Orion recently reported sales revenues of $800,000,a total contribution margin of $300,000,and fixed costs of $180,000.If sales volume amounted to 10,000 units,the company's variable cost per unit must have been:

Accepted Answer

A) $12. 
B) $32. 
C) $50. 
D) $92. 
E) an amount other than those abovE. 
A) $12. 
B) $32. 
C) $50. 
D) $92. 
E) an amount other than those abovE.

Question 9

The contribution-margin ratio is:

Accepted Answer

A) the difference between the selling price and the variable cost per unit. 
B) fixed cost per unit divided by variable cost per unit. 
C) variable cost per unit divided by the selling price. 
D) unit contribution margin divided by the selling price. 
E) unit contribution margin divided by fixed cost per unit. 
A) the difference between the selling price and the variable cost per unit. 
B) fixed cost per unit divided by variable cost per unit. 
C) variable cost per unit divided by the selling price. 
D) unit contribution margin divided by the selling price. 
E) unit contribution margin divided by fixed cost per unit.

Question 10

Which of the following would take place if a company increased its variable cost per unit?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E

Question 11

A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales revenue by the:

Accepted Answer

A) contribution margin. 
B) gross margin. 
C) operating leverage factor. 
D) safety margin. 
E) contribution-margin ratio. 
A) contribution margin. 
B) gross margin. 
C) operating leverage factor. 
D) safety margin. 
E) contribution-margin ratio.

Question 12

The following information relates to Paternus Company:  
If a manager at Paternus desired to determine the percentage impact on income of a given percentage change in sales,the manager would multiply the percentage increase/decrease in sales revenue by:

Accepted Answer

A) 0.25. 
B) 0.40. 
C) 2.50. 
D) 4.00. 
E) 10.00. 
A) 0.25. 
B) 0.40. 
C) 2.50. 
D) 4.00. 
E) 10.00.

Question 13

Elmton recently sold 70,000 units,generating sales revenue of $4,900,000.The company's variable cost per unit and total fixed cost amounted to $20 and $2,800,000,respectively.Management is in the process of studying the dollar impact of various transactions and events,and desires answers to the following independent cases:
Case no.1: Management wants to lower the firm's break-even point to 52,000 units.If all other costs remain constant,what must happen to fixed costs to achieve this objective?
Case no.2: The company anticipates a $2 hike in the variable cost per unit.If all other costs remain constant and management desires to maintain the firm's current break-even point,what must happen to Elmton's selling price? If selling price remains constant,what must happen to the firm's total fixed costs?
Required:
A.Answer the two cases raised by management.
A.Case no.1:
Selling price per unit: $4,900,000 / 70,000 units = $70
Unit contribution margin: $70 - $20 = $50
Current break-even point: $2,800,000 / $50 = 56,000 units
New level of fixed cost: X / $50 = 52,000 units;X = $2,600,000
Fixed costs must decrease by $200,000 ($2,800,000 - $2,600,000).
Case no.2:
To keep the same break-even point,the contribution margin must remain at $50.Thus,the selling price must increase to $72 to offset the $2 hike in variable cost.
Break-even: Fixed cost / $48 = 56,000 units;fixed cost = $2,688,000
Fixed costs must fall by $112,000 ($2,800,000 - $2,688,000)if the selling price remains constant.
B.1.Decrease
2.Increase
3.No effect
B.Determine the impact (increase,decrease,or no effect)of the following operating changes on the items cited:
1.An increase in variable selling costs on income.
2.A decrease in direct material cost on the unit contribution margin.
3.A decrease in the number of units sold on the break-even point.

Accepted Answer

A.Case no.1:
Selling price per unit:$4,9

Question 14

A recent income statement of Yang Corporation reported the following data:  
If these data are based on the sale of 5,000 units,the break-even sales would be:

Accepted Answer

A) $2,000,000. 
B) $2,206,000. 
C) $2,500,000. 
D) $10,000,000. 
E) an amount other than those abovE. 
A) $2,000,000. 
B) $2,206,000. 
C) $2,500,000. 
D) $10,000,000. 
E) an amount other than those abovE.

Question 15

If Narchie sells 24,000 units,its safety margin will be:

Accepted Answer

A) $200,000. 
B) $400,000. 
C) $1,000,000. 
D) $1,200,000. 
E) an amount other than those abovE. 
A) $200,000. 
B) $400,000. 
C) $1,000,000. 
D) $1,200,000. 
E) an amount other than those abovE.

Question 16

Refer to the figure above.The triangular area between the horizontal axis and Line A,to the right of 4,000,represents:

Accepted Answer

A) fixed cost. 
B) variable cost. 
C) profit. 
D) loss. 
E) sales revenuE. 
A) fixed cost. 
B) variable cost. 
C) profit. 
D) loss. 
E) sales revenuE.

Question 17

All other things being equal,a company that sells multiple products should attempt to structure its sales mix so the greatest portion of the mix is composed of those products with the highest:

Accepted Answer

A) selling price. 
B) variable cost. 
C) contribution margin. 
D) fixed cost. 
E) gross margin. 
A) selling price. 
B) variable cost. 
C) contribution margin. 
D) fixed cost. 
E) gross margin.

Question 18

If a company desires to increase its safety margin,it should:

Accepted Answer

A) increase fixed costs. 
B) decrease the contribution margin. 
C) decrease selling prices,assuming the price change will have no effect on demand. 
D) stimulate sales volume. 
E) attempt to raise the break-even point. 
A) increase fixed costs. 
B) decrease the contribution margin. 
C) decrease selling prices,assuming the price change will have no effect on demand. 
D) stimulate sales volume. 
E) attempt to raise the break-even point.

Question 19

Which of the following would take place if a company experienced an increase in fixed costs?

Accepted Answer

A) Net income would increase. 
B) The break-even point would increase. 
C) The contribution margin would increase. 
D) The contribution margin would decrease. 
E) More than one of the above events would occur. 
A) Net income would increase. 
B) The break-even point would increase. 
C) The contribution margin would increase. 
D) The contribution margin would decrease. 
E) More than one of the above events would occur.

Question 20

The unit contribution margin is calculated as the difference between:

Accepted Answer

A) selling price and fixed cost per unit. 
B) selling price and variable cost per unit. 
C) selling price and product cost per unit. 
D) fixed cost per unit and variable cost per unit. 
E) fixed cost per unit and product cost per unit. 
A) selling price and fixed cost per unit. 
B) selling price and variable cost per unit. 
C) selling price and product cost per unit. 
D) fixed cost per unit and variable cost per unit. 
E) fixed cost per unit and product cost per unit.

The break-even point is that level of activity where:

Assuming that the sales mix remains constant,the number of units of Plain that Jamal must sell to break even is:

Barrey,Inc.is subject to a 40% income tax rate.The following data pertain to the period just ended when the company produced and sold 45,000 units: How many units must Barrey sell to earn an after-tax profit of $180,000?

The break-even point is that level of activity where total revenue equals total cost.

The weighted-average unit contribution margin is:

O'Dale sells three products: R,S,and T.Budgeted information for the upcoming accounting period follows. The company's weighted-average unit contribution margin is:

Orion recently reported sales revenues of $800,000,a total contribution margin of $300,000,and fixed costs of $180,000.If sales volume amounted to 10,000 units,the company's variable cost per unit must have been:

The contribution-margin ratio is:

Which of the following would take place if a company increased its variable cost per unit?

A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales revenue by the:

The following information relates to Paternus Company: If a manager at Paternus desired to determine the percentage impact on income of a given percentage change in sales,the manager would multiply the percentage increase/decrease in sales revenue by:

A recent income statement of Yang Corporation reported the following data: If these data are based on the sale of 5,000 units,the break-even sales would be:

If Narchie sells 24,000 units,its safety margin will be:

Refer to the figure above.The triangular area between the horizontal axis and Line A,to the right of 4,000,represents:

All other things being equal,a company that sells multiple products should attempt to structure its sales mix so the greatest portion of the mix is composed of those products with the highest:

If a company desires to increase its safety margin,it should:

Which of the following would take place if a company experienced an increase in fixed costs?

The unit contribution margin is calculated as the difference between:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters

Exam 7: Cost-Volume-Profit Analysis

The break-even point is that level of activity where:

Assuming that the sales mix remains constant,the number of units of Plain that Jamal must sell to break even is:

Barrey,Inc.is subject to a 40% income tax rate.The following data pertain to the period just ended when the company produced and sold 45,000 units: How many units must Barrey sell to earn an after-tax profit of $180,000?

The break-even point is that level of activity where total revenue equals total cost.

The weighted-average unit contribution margin is:

O'Dale sells three products: R,S,and T.Budgeted information for the upcoming accounting period follows. The company's weighted-average unit contribution margin is:

Orion recently reported sales revenues of $800,000,a total contribution margin of $300,000,and fixed costs of $180,000.If sales volume amounted to 10,000 units,the company's variable cost per unit must have been:

The contribution-margin ratio is:

Which of the following would take place if a company increased its variable cost per unit?

A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales revenue by the:

The following information relates to Paternus Company: If a manager at Paternus desired to determine the percentage impact on income of a given percentage change in sales,the manager would multiply the percentage increase/decrease in sales revenue by:

A recent income statement of Yang Corporation reported the following data: If these data are based on the sale of 5,000 units,the break-even sales would be:

If Narchie sells 24,000 units,its safety margin will be:

Refer to the figure above.The triangular area between the horizontal axis and Line A,to the right of 4,000,represents:

All other things being equal,a company that sells multiple products should attempt to structure its sales mix so the greatest portion of the mix is composed of those products with the highest:

If a company desires to increase its safety margin,it should:

Which of the following would take place if a company experienced an increase in fixed costs?

The unit contribution margin is calculated as the difference between:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters