Question 1

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

Accepted Answer

A)  55.68 
B)  3.65 
C)  7.73 
D)  12.76 
A)  55.68 
B)  3.65 
C)  7.73 
D)  12.76

Question 2

Keomuangtai Corporation produces and sells a single product. The company has provided its contribution format income statement for October.
  
-If the company sells 4,200 units,its net operating income should be closest to:

Accepted Answer

A)  $17,600 
B)  $23,009 
C)  $25,200 
D)  $2,000 
A)  $17,600 
B)  $23,009 
C)  $25,200 
D)  $2,000

Question 3

Two companies with the same margin of safety in dollars will also have the same total contribution margin.

Accepted Answer

A) True 
 B)False

Question 4

In July,Meers Corporation sold 3,700 units of its only product.Its total sales were $107,300,its total variable expenses were $66,600,and its total fixed expenses were $34,800.
Required:
a.Construct the company's contribution format income statement for July.
b.Redo the company's contribution format income statement assuming that the company sells 3,400 units.

Accepted Answer

The answer of In July,Meers Corporation sold 3,700 units of...

Question 5

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

Accepted Answer

A)  72.6% 
B)  65.7% 
C)  34.3% 
D)  27.4% 
A)  72.6% 
B)  65.7% 
C)  34.3% 
D)  27.4%

Question 6

Wimpy Inc.produces and sells a single product.The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit.The fixed expense is $366,915 per month. The break-even in monthly dollar sales is closest to:

Accepted Answer

A)  $601,500 
B)  $366,915 
C)  $636,408 
D)  $940,808 
A)  $601,500 
B)  $366,915 
C)  $636,408 
D)  $940,808

Question 7

Data concerning Kardas Corporation's single product appear below:
  The company is currently selling 8,000 units per month.Fixed expenses are $719,000 per month.The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  decrease of $160 
B)  increase of $20,160 
C)  decrease of $20,000 
D)  increase of $160 
A)  decrease of $160 
B)  increase of $20,160 
C)  decrease of $20,000 
D)  increase of $160

Question 8

Lister 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)  $1,050 
B)  $30,450 
C)  $10,150 
D)  $9,450 
A)  $1,050 
B)  $30,450 
C)  $10,150 
D)  $9,450

Question 9

Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80.The company's monthly fixed expense is $396,480 per month.The unit sales to attain the company's monthly target profit of $13,000 is closest to:

Accepted Answer

A)  7,755 
B)  6,093 
C)  5,753 
D)  3,412 
A)  7,755 
B)  6,093 
C)  5,753 
D)  3,412

Question 10

Warrix Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   If sales increase to 3,020 units,the increase in net operating income would be closest to:

Accepted Answer

A)  $800.00 
B)  $20.00 
C)  $600.00 
D)  $200.00 
A)  $800.00 
B)  $20.00 
C)  $600.00 
D)  $200.00

Question 11

A $2.00 increase in a product's variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:

Accepted Answer

A)  decrease the degree of operating leverage. 
B)  decrease the contribution margin. 
C)  have no effect on the break-even volume. 
D)  have no effect on the contribution margin ratio. 
A)  decrease the degree of operating leverage. 
B)  decrease the contribution margin. 
C)  have no effect on the break-even volume. 
D)  have no effect on the contribution margin ratio.

Question 12

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
  
-If sales increase to 6,020 units,the increase in net operating income would be closest to:

Accepted Answer

A)  $1,000.00 
B)  $800.00 
C)  $200.00 
D)  $3.33 
A)  $1,000.00 
B)  $800.00 
C)  $200.00 
D)  $3.33

Question 13

Golebiewski Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
  
-The margin of safety in dollars is closest to:

Accepted Answer

A)  $2,250 
B)  $9,000 
C)  $35,250 
D)  $37,500 
A)  $2,250 
B)  $9,000 
C)  $35,250 
D)  $37,500

Question 14

Data concerning Strite Corporation's single product appear below:
  
-Assume the company's target profit is $8,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A)  $596,111 
B)  $1,532,857 
C)  $852,723 
D)  $429,200 
A)  $596,111 
B)  $1,532,857 
C)  $852,723 
D)  $429,200

Question 15

Highjinks, Inc., has provided the following budgeted data:
  
-What is the margin of safety in dollars?

Accepted Answer

A)  $5,520,000 
B)  $1,545,600 
C)  $3,974,400 
D)  $3,680,000 
A)  $5,520,000 
B)  $1,545,600 
C)  $3,974,400 
D)  $3,680,000

Question 16

Cubie Corporation has provided the following data concerning its only product:
  What is the margin of safety in dollars?

Accepted Answer

A)  $1,060,000 
B)  $106,000 
C)  $954,000 
D)  $706,667 
A)  $1,060,000 
B)  $106,000 
C)  $954,000 
D)  $706,667

Question 17

Fawn Company's margin of safety is $90,000.If the company's sales drop by $80,000,it will still have positive net operating income.

Accepted Answer

A) True 
 B)False

Question 18

Highjinks, Inc., has provided the following budgeted data:
  
-The margin of safety as a percentage of sales is closest to:

Accepted Answer

A)  61% 
B)  28% 
C)  72% 
D)  39% 
A)  61% 
B)  28% 
C)  72% 
D)  39%

Question 19

The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin.

Accepted Answer

A) True 
 B)False

Question 20

If the variable expense per unit decreases,and all other factors remain the same,the contribution margin ratio will increase.

Accepted Answer

A) True 
 B)False

Exam 5: Cost-Volume-Profit Relationships

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

Keomuangtai Corporation produces and sells a single product. The company has provided its contribution format income statement for October. -If the company sells 4,200 units,its net operating income should be closest to:

Two companies with the same margin of safety in dollars will also have the same total contribution margin.

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

Wimpy Inc.produces and sells a single product.The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit.The fixed expense is $366,915 per month. The break-even in monthly dollar sales is closest to:

Lister 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:

Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80.The company's monthly fixed expense is $396,480 per month.The unit sales to attain the company's monthly target profit of $13,000 is closest to:

Warrix Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. If sales increase to 3,020 units,the increase in net operating income would be closest to:

A $2.00 increase in a product's variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If sales increase to 6,020 units,the increase in net operating income would be closest to:

Golebiewski Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The margin of safety in dollars is closest to:

Data concerning Strite Corporation's single product appear below: -Assume the company's target profit is $8,000.The dollar sales to attain that target profit is closest to:

Highjinks, Inc., has provided the following budgeted data: -What is the margin of safety in dollars?

Cubie Corporation has provided the following data concerning its only product: What is the margin of safety in dollars?

Fawn Company's margin of safety is $90,000.If the company's sales drop by $80,000,it will still have positive net operating income.

Highjinks, Inc., has provided the following budgeted data: -The margin of safety as a percentage of sales is closest to:

The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin.

If the variable expense per unit decreases,and all other factors remain the same,the contribution margin ratio will increase.

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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