Question 1

Scatter diagrams plot volume (units) on the horizontal axis and cost on the vertical axis.

Accepted Answer

A) True 
 B)False

Question 2

Dividing a mixed cost into its separate fixed and variable cost components makes it more difficult to perform cost-volume-profit analysis.

Accepted Answer

A) True 
 B)False

Question 3

Use the following information to determine the contribution margin ratio:

Accepted Answer

A)  6.9%. 
B)  48.3%. 
C)  24.5%. 
D)  51.7%. 
E)  34.1%. 
A)  6.9%. 
B)  48.3%. 
C)  24.5%. 
D)  51.7%. 
E)  34.1%.

Question 4

Select cost information for Seacrest Enterprises is as follows:   Based on this information:

Accepted Answer

A)  Both direct materials and rent expense are variable costs. 
B)  Utilities expense is a mixed cost and rent expense is a variable cost. 
C)  Utilities expense is a mixed cost and rent expense is a fixed cost. 
D)  Direct materials is a fixed cost and utilities expense is a mixed cost. 
E)  Both direct materials and utilities expense are mixed costs. 
A)  Both direct materials and rent expense are variable costs. 
B)  Utilities expense is a mixed cost and rent expense is a variable cost. 
C)  Utilities expense is a mixed cost and rent expense is a fixed cost. 
D)  Direct materials is a fixed cost and utilities expense is a mixed cost. 
E)  Both direct materials and utilities expense are mixed costs.

Question 5

A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in dollars is:

Accepted Answer

A)  $91,680. 
B)  $68,760. 
C)  $2,292. 
D)  $275,040. 
E)  $206,280. 
A)  $91,680. 
B)  $68,760. 
C)  $2,292. 
D)  $275,040. 
E)  $206,280.

Question 6

What is a scatter diagram? How is a scatter diagram used to estimate cost behavior?

Accepted Answer

A scatter diagram displays past cost dat

Question 7

A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $5, total fixed costs must be:

Accepted Answer

A)  $65,000. 
B)  $90,000. 
C)  $125,000. 
D)  $215,000. 
E)  $275,000. 
A)  $65,000. 
B)  $90,000. 
C)  $125,000. 
D)  $215,000. 
E)  $275,000.

Question 8

Portal Manufacturing has total fixed costs of $520,000. A unit of product sells for $15 and variable costs per unit are $11.
a) Prepare a contribution margin income statement showing predicted net income (loss) if Portal sells 100,000 units for the year ended December 31.
b) At a minimum, how many units must Portal sell in order not to incur a loss?

Accepted Answer

a)
 @#IMG-DLM& b) $5

Question 9

Ludington Corporation provides the following data from a recent period for its manufacture of shoes: variable manufacturing costs, $24,000; variable selling costs, $12,000; and total fixed costs, $40,000. Sales were $60,000 based on 12,000 units sold during the period. Calculate the contribution margin and the contribution margin ratio.

Accepted Answer

The answer of Ludington Corporation provides the following data from...

Question 10

Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit contribution margin of $450; and the Recreational model sells for $1,000 and has a unit contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's contribution margin ratio per composite unit (rounded to the nearest whole percentage).

Accepted Answer

A)  35% 
B)  50% 
C)  53% 
D)  200% 
E)  40% 
A)  35% 
B)  50% 
C)  53% 
D)  200% 
E)  40%

Question 11

Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are:   Total fixed costs are $340,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:

Accepted Answer

A)  $17.00. 
B)  $ 5.67. 
C)  $20.00. 
D)  $37.00. 
E)  $25.00. 
A)  $17.00. 
B)  $ 5.67. 
C)  $20.00. 
D)  $37.00. 
E)  $25.00.

Question 12

Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan Company management targets an annual pre-tax income of $1,125,000. Compute the dollar sales to earn the target pre-tax net income.

Accepted Answer

A)  $5,640,000. 
B)  $4,812,500. 
C)  $3,378,378. 
D)  $2,991,004. 
E)  $2,612,613. 
A)  $5,640,000. 
B)  $4,812,500. 
C)  $3,378,378. 
D)  $2,991,004. 
E)  $2,612,613.

Question 13

One aid in measuring cost behavior involves creating a display of the data about past costs in graphical form. Such a visual display is called a ________.

Accepted Answer

The answer of One aid in measuring cost behavior involves...

Question 14

A manufacturer reports the following costs to produce 10,000 units in its first year of operations: Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed overhead, $120,000. The total product cost per unit under absorption costing is:

Accepted Answer

A)  $16 per unit. 
B)  $23 per unit. 
C)  $35 per unit. 
D)  $28 per unit. 
E)  $17 per unit. 
A)  $16 per unit. 
B)  $23 per unit. 
C)  $35 per unit. 
D)  $28 per unit. 
E)  $17 per unit.

Question 15

A manufacturer reports the following information below for its first three years in operation.   Income for year 3-year period using absorption costing is:

Accepted Answer

A)  $280,000. 
B)  $310,000. 
C)  $300,000. 
D)  $305,000. 
E)  $308,000. 
A)  $280,000. 
B)  $310,000. 
C)  $300,000. 
D)  $305,000. 
E)  $308,000.

Question 16

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

Accepted Answer

A)  Least-squares diagram. 
B)  Step-wise diagram. 
C)  Scatter diagram. 
D)  Break-even diagram. 
E)  Composite diagram. 
A)  Least-squares diagram. 
B)  Step-wise diagram. 
C)  Scatter diagram. 
D)  Break-even diagram. 
E)  Composite diagram.

Question 17

Alvarez Company's break-even point in units is 1,000. The sales price per unit is $10 and variable cost per unit is $7. If the company sells 2,500 units, what will net income be?

Accepted Answer

A)  $4,500 
B)  $7,500 
C)  $17,000 
D)  $35,000 
E)  $3,000 
A)  $4,500 
B)  $7,500 
C)  $17,000 
D)  $35,000 
E)  $3,000

Question 18

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Accepted Answer

A)  Current product mix. 
B)  Relevant mix. 
C)  Sales mix. 
D)  Inventory cost ratio. 
E)  Production ratio. 
A)  Current product mix. 
B)  Relevant mix. 
C)  Sales mix. 
D)  Inventory cost ratio. 
E)  Production ratio.

Question 19

Fielder Productions reports the following information:
Total Contribution Margin………………….. $32,000
Total Fixed Costs……………………………. $28,000
Required:
(a) Calculate Fielder's degree of operating leverage (DOL).
(b) Fielder Productions forecasts a 6% increase in sales. What is the expected effect in percent on pretax income?

Accepted Answer

@#IMG-DLM& Degree of operating leverage

Question 20

At Midland Company's break-even point of 9,000 units, fixed costs are $180,000 and variable costs are $540,000 in total. The unit sales price is:

Accepted Answer

A)  $20. 
B)  $40. 
C)  $60. 
D)  $80. 
E)  $100. 
A)  $20. 
B)  $40. 
C)  $60. 
D)  $80. 
E)  $100.

Scatter diagrams plot volume (units) on the horizontal axis and cost on the vertical axis.

Dividing a mixed cost into its separate fixed and variable cost components makes it more difficult to perform cost-volume-profit analysis.

Use the following information to determine the contribution margin ratio:

Select cost information for Seacrest Enterprises is as follows: Based on this information:

A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in dollars is:

What is a scatter diagram? How is a scatter diagram used to estimate cost behavior?

A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $5, total fixed costs must be:

Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: Total fixed costs are $340,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:

One aid in measuring cost behavior involves creating a display of the data about past costs in graphical form. Such a visual display is called a ________.

A manufacturer reports the following costs to produce 10,000 units in its first year of operations: Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed overhead, $120,000. The total product cost per unit under absorption costing is:

A manufacturer reports the following information below for its first three years in operation. Income for year 3-year period using absorption costing is:

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

Alvarez Company's break-even point in units is 1,000. The sales price per unit is $10 and variable cost per unit is $7. If the company sells 2,500 units, what will net income be?

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

At Midland Company's break-even point of 9,000 units, fixed costs are $180,000 and variable costs are $540,000 in total. The unit sales price is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

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Exam 5: Cost Behavior Cost-Volume-Profit Analysis

Scatter diagrams plot volume (units) on the horizontal axis and cost on the vertical axis.

Dividing a mixed cost into its separate fixed and variable cost components makes it more difficult to perform cost-volume-profit analysis.

Use the following information to determine the contribution margin ratio:

Select cost information for Seacrest Enterprises is as follows: Based on this information:

A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in dollars is:

What is a scatter diagram? How is a scatter diagram used to estimate cost behavior?

A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $5, total fixed costs must be:

Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: Total fixed costs are $340,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:

One aid in measuring cost behavior involves creating a display of the data about past costs in graphical form. Such a visual display is called a ________.

A manufacturer reports the following costs to produce 10,000 units in its first year of operations: Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed overhead, $120,000. The total product cost per unit under absorption costing is:

A manufacturer reports the following information below for its first three years in operation. Income for year 3-year period using absorption costing is:

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

Alvarez Company's break-even point in units is 1,000. The sales price per unit is $10 and variable cost per unit is $7. If the company sells 2,500 units, what will net income be?

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

At Midland Company's break-even point of 9,000 units, fixed costs are $180,000 and variable costs are $540,000 in total. The unit sales price is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

Filters