Question 1

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 2

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 3

If the company sells 4,500 units, its total contribution margin should be closest to:

Accepted Answer

A) $85,500 
B) $24,652 
C) $87,400 
D) $81,600 
A) $85,500 
B) $24,652 
C) $87,400 
D) $81,600

Question 4

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 5

When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs.

Accepted Answer

A) True 
 B)False

Question 6

The break-even point in unit sales is closest to:

Accepted Answer

A) 0 units 
B) 5,850 units 
C) 8,100 units 
D) 8,685 units 
A) 0 units 
B) 5,850 units 
C) 8,100 units 
D) 8,685 units

Question 7

Bendel Inc.has an operating leverage of 7.3.If the company's sales increase by 3%, its net operating income should increase by about:

Accepted Answer

A) 243.3% 
B) 7.3% 
C) 21.9% 
D) 3.0% 
A) 243.3% 
B) 7.3% 
C) 21.9% 
D) 3.0%

Question 8

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

Accepted Answer

A) 3,111 
B) 6,892 
C) 4,040 
D) 13,525 
A) 3,111 
B) 6,892 
C) 4,040 
D) 13,525

Question 9

Wenstrom 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) $342,550 
B) $204,455 
C) $109,616 
D) $161,200 
A) $342,550 
B) $204,455 
C) $109,616 
D) $161,200

Question 10

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 11

This question is to be considered independently of all other questions relating to Houpe Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $28,000 per month.The marketing manager predicts that these two changes 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) decrease of $17,500 
B) increase of $17,500 
C) decrease of $24,500 
D) increase of $38,500 
A) decrease of $17,500 
B) increase of $17,500 
C) decrease of $24,500 
D) increase of $38,500

Question 12

At the budgeted sales level of 10,000 units, what is the company's degree of operating leverage?

Accepted Answer

A) 10.0 
B) 6.0 
C) 22.5 
D) 5.0 
A) 10.0 
B) 6.0 
C) 22.5 
D) 5.0

Question 13

Stauffer Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   The variable expense ratio is closest to:

Accepted Answer

A) 60% 
B) 40% 
C) 67% 
D) 33% 
A) 60% 
B) 40% 
C) 67% 
D) 33%

Question 14

If the company sells 9,700 units, its net operating income should be closest to:

Accepted Answer

A) $57,000 
B) $55,000 
C) $55,573 
D) $58,500 
A) $57,000 
B) $55,000 
C) $55,573 
D) $58,500

Question 15

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

Question 16

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 17

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 18

Mechem Corporation produces and sells a single product.In April, the company sold 2,100 units.Its total sales were $205,800, its total variable expenses were $107,100, and its total fixed expenses were $82,400.
Required:
a.Construct the company's contribution format income statement for April.
b.Redo the company's contribution format income statement assuming that the company sells 2,200 units.

Accepted Answer

@#IMG-DLM&_TB2627_00

Question 19

The margin of safety percentage is closest to:

Accepted Answer

A) 2% 
B) 24% 
C) 75% 
D) 6% 
A) 2% 
B) 24% 
C) 75% 
D) 6%

Question 20

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

The degree of operating leverage 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:

If the company sells 4,500 units, its total contribution margin should be closest to:

When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs.

The break-even point in unit sales is closest to:

Bendel Inc.has an operating leverage of 7.3.If the company's sales increase by 3%, its net operating income should increase by about:

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

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

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?

At the budgeted sales level of 10,000 units, what is the company's degree of operating leverage?

Stauffer Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The variable expense ratio is closest to:

If the company sells 9,700 units, its net operating income should be closest to:

The company's contribution margin ratio is closest to:

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

The margin of safety percentage is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

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Exam 6: Cost-Volume-Profit Relationships

The degree of operating leverage 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:

If the company sells 4,500 units, its total contribution margin should be closest to:

When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs.

The break-even point in unit sales is closest to:

Bendel Inc.has an operating leverage of 7.3.If the company's sales increase by 3%, its net operating income should increase by about:

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

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

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?

At the budgeted sales level of 10,000 units, what is the company's degree of operating leverage?

Stauffer Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The variable expense ratio is closest to:

If the company sells 9,700 units, its net operating income should be closest to:

The company's contribution margin ratio is closest to:

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

The margin of safety percentage is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

Filters