Question 1

Break-even analysis assumes that:

Accepted Answer

A)  Total revenue is constant. 
B)  Unit variable expense is constant. 
C)  Unit fixed expense is constant. 
D)  Selling prices must fall in order to generate more revenue. 
A)  Total revenue is constant. 
B)  Unit variable expense is constant. 
C)  Unit fixed expense is constant. 
D)  Selling prices must fall in order to generate more revenue.

Question 2

Zanetti Corporation produces and sells a single product. Data concerning that product appear below:
  
-The break-even in monthly dollar sales is closest to:

Accepted Answer

A)  $191,400 
B)  $249,810 
C)  $426,030 
D)  $132,110 
A)  $191,400 
B)  $249,810 
C)  $426,030 
D)  $132,110

Question 3

Maziarz Corporation produces and sells a single product. Data concerning that product appear below:
  
-Assume the company's target profit is $12,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A)  $1,549,412 
B)  $798,182 
C)  $526,800 
D)  $958,131 
A)  $1,549,412 
B)  $798,182 
C)  $526,800 
D)  $958,131

Question 4

Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October.
  
-If the company sells 3,600 units,its total contribution margin should be closest to:

Accepted Answer

A)  $39,200 
B)  $5,670 
C)  $43,200 
D)  $48,000 
A)  $39,200 
B)  $5,670 
C)  $43,200 
D)  $48,000

Question 5

Data concerning Sinisi Corporation's single product appear below:
  
-The break-even in monthly unit sales is closest to:

Accepted Answer

A)  2,038 units 
B)  7,027 units 
C)  2,870 units 
D)  3,978 units 
A)  2,038 units 
B)  7,027 units 
C)  2,870 units 
D)  3,978 units

Question 6

Nocum Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   If sales decline to 2,900 units,the net operating income would be closest to:

Accepted Answer

A)  $29,000 
B)  $1,000 
C)  $8,700 
D)  $8,000 
A)  $29,000 
B)  $1,000 
C)  $8,700 
D)  $8,000

Question 7

Sjostrom 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 600 units,the net operating income would be closest to:

Accepted Answer

A)  $24,800 
B)  $35,000 
C)  $19,200 
D)  $32,000 
A)  $24,800 
B)  $35,000 
C)  $19,200 
D)  $32,000

Question 8

Maruska Corporation has provided the following data concerning its only product:
  
-The margin of safety as a percentage of sales is closest to:

Accepted Answer

A)  19% 
B)  16% 
C)  84% 
D)  81% 
A)  19% 
B)  16% 
C)  84% 
D)  81%

Question 9

Data concerning Lemelin Corporation's single product appear below:
   The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $20 per unit.In exchange,the sales staff would accept a decrease in their salaries of $113,000 per month.(This is the company's savings for the entire sales staff.)The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  decrease of $224,500 
B)  increase of $107,000 
C)  increase of $1,500 
D)  increase of $806,500 
A)  decrease of $224,500 
B)  increase of $107,000 
C)  increase of $1,500 
D)  increase of $806,500

Question 10

The contribution margin ratio of Mountain Corporation's only product is 52%.The company's monthly fixed expense is $296,400 and the company's monthly target profit is $7,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A)  $570,000 
B)  $157,768 
C)  $583,462 
D)  $154,128 
A)  $570,000 
B)  $157,768 
C)  $583,462 
D)  $154,128

Question 11

On a CVP graph for a profitable company,the total expense line will be steeper than the total revenue line.

Accepted Answer

A) True 
 B)False

Question 12

Maruca 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)  $175,500 
B)  $261,600 
C)  $246,000 
D)  $0 
A)  $175,500 
B)  $261,600 
C)  $246,000 
D)  $0

Question 13

If the degree of operating leverage is 4,then a one percent change in quantity sold should result in a four percent change in:

Accepted Answer

A)  unit contribution margin. 
B)  revenue. 
C)  variable expense. 
D)  net operating income. 
A)  unit contribution margin. 
B)  revenue. 
C)  variable expense. 
D)  net operating income.

Question 14

A manufacturer of cedar shingles has supplied the following data:
  
-The company's degree of operating leverage is closest to:

Accepted Answer

A)  11.25 
B)  25.88 
C)  1.99 
D)  75.38 
A)  11.25 
B)  25.88 
C)  1.99 
D)  75.38

Question 15

Liz,Inc.,produces and sells a single product.The product sells for $130.00 per unit and its variable expense is $48.10 per unit.The company's monthly fixed expense is $223,587.
Required:
Determine the monthly break-even in unit sales.Show your work!

Accepted Answer

@#IMG-DLM& Unit sales to break

Question 16

Montesdeoca Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.
   Required:
a.If sales decline to 1,900 units,what would be the estimated net operating income?
b.If the selling price increases by $4 per unit and the sales volume decreases by 200 units,what would be the estimated net operating income?
c.What is the break-even point in dollar sales?

Accepted Answer

a.
 @#IMG-DLM& @#IMG-DLM& b.
 @#IMG-DLM& c.CM ratio = Contri

Question 17

Serfass Corporation's contribution format income statement for July appears below:
  The degree of operating leverage is closest to:

Accepted Answer

A)  0.05 
B)  0.15 
C)  21.31 
D)  6.89 
A)  0.05 
B)  0.15 
C)  21.31 
D)  6.89

Question 18

Data concerning Bazin Corporation's single product appear below:
  Fixed expenses are $384,000 per month.The company is currently selling 6,000 units per month.The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $9 per unit.In exchange,the sales staff would accept a decrease in their salaries of $46,000 per month.(This is the company's savings for the entire sales staff.)The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  increase of $27,500 
B)  decrease of $64,500 
C)  increase of $41,500 
D)  increase of $507,500 
A)  increase of $27,500 
B)  decrease of $64,500 
C)  increase of $41,500 
D)  increase of $507,500

Question 19

Gayne Corporation's contribution margin ratio is 12% and its fixed monthly expenses are $84,000.If the company's sales for a month are $738,000,what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

Accepted Answer

A)  $565,440 
B)  $654,000 
C)  $88,560 
D)  $4,560 
A)  $565,440 
B)  $654,000 
C)  $88,560 
D)  $4,560

Question 20

Certosimo Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.
   Required:
a.If sales increase to 7,040 units,what would be the estimated increase in net operating income?
b.If sales decline to 6,900 units,what would be the estimated net operating income?

Accepted Answer

a.The increase in net operatin

Exam 5: Cost-Volume-Profit Relationships

Break-even analysis assumes that:

Zanetti Corporation produces and sells a single product. Data concerning that product appear below: -The break-even in monthly dollar sales is closest to:

Maziarz Corporation produces and sells a single product. Data concerning that product appear below: -Assume the company's target profit is $12,000.The dollar sales to attain that target profit is closest to:

Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October. -If the company sells 3,600 units,its total contribution margin should be closest to:

Data concerning Sinisi Corporation's single product appear below: -The break-even in monthly unit sales is closest to:

Nocum Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. If sales decline to 2,900 units,the net operating income would be closest to:

Sjostrom 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 600 units,the net operating income would be closest to:

Maruska Corporation has provided the following data concerning its only product: -The margin of safety as a percentage of sales is closest to:

The contribution margin ratio of Mountain Corporation's only product is 52%.The company's monthly fixed expense is $296,400 and the company's monthly target profit is $7,000.The dollar sales to attain that target profit is closest to:

On a CVP graph for a profitable company,the total expense line will be steeper than the total revenue line.

Maruca 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:

If the degree of operating leverage is 4,then a one percent change in quantity sold should result in a four percent change in:

A manufacturer of cedar shingles has supplied the following data: -The company's degree of operating leverage is closest to:

Liz,Inc.,produces and sells a single product.The product sells for $130.00 per unit and its variable expense is $48.10 per unit.The company's monthly fixed expense is $223,587. Required: Determine the monthly break-even in unit sales.Show your work!

Serfass Corporation's contribution format income statement for July appears below: The degree of operating leverage is closest to:

Gayne Corporation's contribution margin ratio is 12% and its fixed monthly expenses are $84,000.If the company's sales for a month are $738,000,what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

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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