Question 1

The break-even point can be determined by simply adding together all of the expenses from the income statement.

Accepted Answer

A) True 
 B)False

Question 2

Sales at East Corporation declined from $100,000 to $80,000,while net operating income declined by 300%.Given these data,the company must have had an operating leverage of:

Accepted Answer

A)  15 
B)  2.7 
C)  30 
D)  12 
A)  15 
B)  2.7 
C)  30 
D)  12

Question 3

Derst Inc.sells a particular textbook for $140.Variable expenses are $25 per book.At the current volume of 6,000 books sold per year the company is just breaking even.Given these data,the annual fixed expenses associated with the textbook total:

Accepted Answer

A)  $400,000 
B)  $690,000 
C)  $840,000 
D)  $150,000 
A)  $400,000 
B)  $690,000 
C)  $840,000 
D)  $150,000

Question 4

The following information pertains to Nova Co.'s cost-volume-profit relationships:
  How much will be contributed to net operating income by the 1,001st unit sold?

Accepted Answer

A)  $650 
B)  $500 
C)  $150 
D)  $0 
A)  $650 
B)  $500 
C)  $150 
D)  $0

Question 5

Given the following data:
  The break-even point in dollars is:

Accepted Answer

A)  $6,000 
B)  $4,500 
C)  $2,647 
D)  $4,000 
A)  $6,000 
B)  $4,500 
C)  $2,647 
D)  $4,000

Question 6

Caneer Corporation produces and sells a single product.Data concerning that product appear below:
  The unit sales to attain the company's monthly target profit of $44,000 is closest to:

Accepted Answer

A)  7,896 
B)  12,769 
C)  6,578 
D)  4,341 
A)  7,896 
B)  12,769 
C)  6,578 
D)  4,341

Question 7

Nussbaum Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
  
-The number of units that must be sold to achieve a target profit of $16,100 is closest to:

Accepted Answer

A)  32,000 units 
B)  19,400 units 
C)  10,400 units 
D)  23,000 units 
A)  32,000 units 
B)  19,400 units 
C)  10,400 units 
D)  23,000 units

Question 8

Bristo Corporation has sales of 2,000 units at $35 per unit.Variable expenses are 40% of the selling price.If total fixed expenses are $22,000,the degree of operating leverage is:

Accepted Answer

A)  0.79 
B)  1.40 
C)  2.10 
D)  3.50 
A)  0.79 
B)  1.40 
C)  2.10 
D)  3.50

Question 9

Thornbrough Corporation produces and sells a single product with the following characteristics:
   The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Thornbrough Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $53,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,000 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  decrease of $105,000 
B)  increase of $149,000 
C)  increase of $105,000 
D)  decrease of $21,000 
A)  decrease of $105,000 
B)  increase of $149,000 
C)  increase of $105,000 
D)  decrease of $21,000

Question 10

A tile manufacturer has supplied the following data:
  
-The company's contribution margin ratio is closest to:

Accepted Answer

A)  42.7% 
B)  57.3% 
C)  45.8% 
D)  21.0% 
A)  42.7% 
B)  57.3% 
C)  45.8% 
D)  21.0%

Question 11

Sunnripe Corporation manufactures and sells two types of beach towels,standard and deluxe.Sunnripe expects the following operating results next year:
  Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Accepted Answer

A)  $72,000 
B)  $144,000 
C)  $192,000 
D)  $240,000 
A)  $72,000 
B)  $144,000 
C)  $192,000 
D)  $240,000

Question 12

Maziarz Corporation produces and sells a single product. Data concerning that product appear below:
  
-Assume the company's target profit is $14,000.The unit sales to attain that target profit is closest to:

Accepted Answer

A)  7,746 units 
B)  2,556 units 
C)  4,706 units 
D)  3,815 units 
A)  7,746 units 
B)  2,556 units 
C)  4,706 units 
D)  3,815 units

Question 13

Valdez Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
  
-The break-even point in unit sales is closest to:

Accepted Answer

A)  5,850 units 
B)  4,500 units 
C)  0 units 
D)  5,400 units 
A)  5,850 units 
B)  4,500 units 
C)  0 units 
D)  5,400 units

Question 14

Muzzillo Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.
   Required:
a.If the selling price increases by $4 per unit and the sales volume decreases by 300 units,what would be the estimated net operating income?
b.If the variable cost per unit increases by $6,spending on advertising increases by $3,000,and unit sales increase by 1,800 units,what would be the estimated net operating income?

Accepted Answer

The answer of Muzzillo Corporation has provided the following contribution...

Question 15

Ploeger Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   The break-even point in dollar sales is closest to:

Accepted Answer

A)  $234,000 
B)  $237,900 
C)  $156,000 
D)  $0 
A)  $234,000 
B)  $237,900 
C)  $156,000 
D)  $0

Question 16

Bois Corporation has provided its contribution format income statement for January.
  
-The degree of operating leverage is closest to:

Accepted Answer

A)  0.11 
B)  9.37 
C)  0.27 
D)  3.66 
A)  0.11 
B)  9.37 
C)  0.27 
D)  3.66

Question 17

Cobble Corporation produces and sells a single product.Data concerning that product appear below:
  Fixed expenses are $499,000 per month.The company is currently selling 5,000 units per month.The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 900 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  increase of $56,100 
B)  decrease of $8,900 
C)  increase of $99,300 
D)  decrease of $56,100 
A)  increase of $56,100 
B)  decrease of $8,900 
C)  increase of $99,300 
D)  decrease of $56,100

Question 18

Carver Corporation produces a product which sells for $40.Variable manufacturing costs are $18 per unit.Fixed manufacturing costs are $5 per unit based on the current level of activity,and fixed selling and administrative costs are $4 per unit.A selling commission of 15% of the selling price is paid on each unit sold.The contribution margin per unit is:

Accepted Answer

A)  $7 
B)  $17 
C)  $22 
D)  $16 
A)  $7 
B)  $17 
C)  $22 
D)  $16

Question 19

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
  
-If the selling price increases by $3 per unit and the sales volume decreases by 400 units,the net operating income would be closest to:

Accepted Answer

A)  $19,000 
B)  $16,800 
C)  $13,800 
D)  $17,733 
A)  $19,000 
B)  $16,800 
C)  $13,800 
D)  $17,733

Question 20

Coultrap Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   The contribution margin per unit is closest to:

Accepted Answer

A)  $21.00 
B)  $60.00 
C)  $39.00 
D)  $4.90 
A)  $21.00 
B)  $60.00 
C)  $39.00 
D)  $4.90

Exam 5: Cost-Volume-Profit Relationships

The break-even point can be determined by simply adding together all of the expenses from the income statement.

Sales at East Corporation declined from $100,000 to $80,000,while net operating income declined by 300%.Given these data,the company must have had an operating leverage of:

Derst Inc.sells a particular textbook for $140.Variable expenses are $25 per book.At the current volume of 6,000 books sold per year the company is just breaking even.Given these data,the annual fixed expenses associated with the textbook total:

The following information pertains to Nova Co.'s cost-volume-profit relationships: How much will be contributed to net operating income by the 1,001st unit sold?

Given the following data: The break-even point in dollars is:

Caneer Corporation produces and sells a single product.Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $44,000 is closest to:

Nussbaum Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The number of units that must be sold to achieve a target profit of $16,100 is closest to:

Bristo Corporation has sales of 2,000 units at $35 per unit.Variable expenses are 40% of the selling price.If total fixed expenses are $22,000,the degree of operating leverage is:

A tile manufacturer has supplied the following data: -The company's contribution margin ratio is closest to:

Sunnripe Corporation manufactures and sells two types of beach towels,standard and deluxe.Sunnripe expects the following operating results next year: Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Maziarz Corporation produces and sells a single product. Data concerning that product appear below: -Assume the company's target profit is $14,000.The unit sales to attain that target profit is closest to:

Valdez Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The break-even point in unit sales is closest to:

Ploeger Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The break-even point in dollar sales is closest to:

Bois Corporation has provided its contribution format income statement for January. -The degree of operating leverage is closest to:

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If the selling price increases by $3 per unit and the sales volume decreases by 400 units,the net operating income would be closest to:

Coultrap Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The contribution margin per unit is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Cost of Quality

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Job-Order Costing: a Microsoft Excel-Based Approach

Fifo Method

Service Department Allocations

Analyzing Mixed Costs

Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Standard Cost Systems: a Financial Reporting Perspective Using Microsoft Excel

Transfer Pricing

Service Department Charges

Pricing Decisions

The Concept of Present Value

Income Taxes and the Present Value Method

the Direct Method of Determining the Net Cash Provided by Operating Activities

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