Question 1

To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?

Accepted Answer

A) (Fixed expenses + Target net profit)/Total contribution margin 
B) (Fixed expenses + Target net profit)/Contribution margin ratio 
C) Fixed expenses/Contribution margin per unit 
D) Target net profit/Contribution margin ratio 
A) (Fixed expenses + Target net profit)/Total contribution margin 
B) (Fixed expenses + Target net profit)/Contribution margin ratio 
C) Fixed expenses/Contribution margin per unit 
D) Target net profit/Contribution margin ratio

Question 2

What is the company's unit contribution margin?

Accepted Answer

A) $0.45 per unit 
B) $2.10 per unit 
C) $2.00 per unit 
D) $4.10 per unit 
A) $0.45 per unit 
B) $2.10 per unit 
C) $2.00 per unit 
D) $4.10 per unit

Question 3

The degree of operating leverage is closest to:

Accepted Answer

A) 0.06 
B) 17.50 
C) 43.75 
D) 0.02 
A) 0.06 
B) 17.50 
C) 43.75 
D) 0.02

Question 4

Data concerning Wislocki Corporation's single product appear below:   Fixed expenses are $466,000 per month.The company is currently selling 6,000 units per month.
Required:
The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $11 per unit.In exchange, the sales staff would accept an overall decrease in their salaries of $55,000 per month.The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Accepted Answer

The answer of Data concerning Wislocki Corporation's single product appear...

Question 5

Hevesy Inc.produces and sells a single product.The selling price of the product is $200.00 per unit and its variable cost is $80.00 per unit.The fixed expense is $300,000 per month.The break-even in monthly unit sales is closest to:

Accepted Answer

A) 2,500 
B) 1,500 
C) 3,750 
D) 2,583 
A) 2,500 
B) 1,500 
C) 3,750 
D) 2,583

Question 6

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 believes that a $28,000 increase in the monthly advertising budget would result in a 190 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 $28,000 
B) increase of $33,440 
C) increase of $5,440 
D) decrease of $5,440 
A) decrease of $28,000 
B) increase of $33,440 
C) increase of $5,440 
D) decrease of $5,440

Question 7

How much will a company's net operating income change if it undertakes an advertising campaign given the following data:

Accepted Answer

A) $200 increase 
B) $25,200 increase 
C) $15,000 increase 
D) $9,800 increase 
A) $200 increase 
B) $25,200 increase 
C) $15,000 increase 
D) $9,800 increase

Question 8

Kuzio Corporation produces and sells a single product.Data concerning that product appear below:   The company is currently selling 6,000 units per month.Fixed expenses are $263,000 per month.The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 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) increase of $2,280 
B) increase of $7,280 
C) decrease of $5,000 
D) decrease of $2,280 
A) increase of $2,280 
B) increase of $7,280 
C) decrease of $5,000 
D) decrease of $2,280

Question 9

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

Question 10

If the company sells 3,500 units, its net operating income should be closest to:

Accepted Answer

A) $5,513 
B) $6,300 
C) $300 
D) -$4,700 
A) $5,513 
B) $6,300 
C) $300 
D) -$4,700

Question 11

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 12

Lubke Corporation's contribution format income statement for the most recent month follows:   Required:
a.Compute the degree of operating leverage to two decimal places.
b.Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 3% increase in sales.

Accepted Answer

a.Degree of operating leverage = Contrib

Question 13

Mishoe 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) 0 units 
B) 895 units 
C) 700 units 
D) 650 units 
A) 0 units 
B) 895 units 
C) 700 units 
D) 650 units

Question 14

The break-even in monthly dollar sales is closest to:

Accepted Answer

A) $791,436 
B) $535,365 
C) $506,000 
D) $308,660 
A) $791,436 
B) $535,365 
C) $506,000 
D) $308,660

Question 15

Mason Corporation's selling price was $20 per unit.Fixed expenses totaled $54,000, variable expenses were $14 per unit, and the company reported a profit of $9,000 for the year.The break-even point for Mason Corporation is:

Accepted Answer

A) 10,500 units 
B) 4,500 units 
C) 8,500 units 
D) 9,000 units 
A) 10,500 units 
B) 4,500 units 
C) 8,500 units 
D) 9,000 units

Question 16

An increase in the number of units sold will decrease a company's break-even point.

Accepted Answer

A) True 
 B)False

Question 17

In a CVP graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line (sales)and the total fixed expense line.

Accepted Answer

A) True 
 B)False

Question 18

In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be lower in the company with a higher proportion of fixed expenses in its cost structure.

Accepted Answer

A) True 
 B)False

Question 19

The contribution margin ratio is closest to:

Accepted Answer

A) 75% 
B) 67% 
C) 25% 
D) 33% 
A) 75% 
B) 67% 
C) 25% 
D) 33%

Question 20

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

To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?

What is the company's unit contribution margin?

The degree of operating leverage is closest to:

Hevesy Inc.produces and sells a single product.The selling price of the product is $200.00 per unit and its variable cost is $80.00 per unit.The fixed expense is $300,000 per month.The break-even in monthly unit sales is closest to:

How much will a company's net operating income change if it undertakes an advertising campaign given the following data:

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:

If the company sells 3,500 units, its net operating income should be closest to:

The company's degree of operating leverage is closest to:

Mishoe 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:

The break-even in monthly dollar sales is closest to:

Mason Corporation's selling price was $20 per unit.Fixed expenses totaled $54,000, variable expenses were $14 per unit, and the company reported a profit of $9,000 for the year.The break-even point for Mason Corporation is:

An increase in the number of units sold will decrease a company's break-even point.

In a CVP graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line (sales)and the total fixed expense line.

In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be lower in the company with a higher proportion of fixed expenses in its cost structure.

The contribution margin ratio is closest to:

If sales decline to 2,900 units, the net operating income would be 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

To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?

What is the company's unit contribution margin?

The degree of operating leverage is closest to:

Hevesy Inc.produces and sells a single product.The selling price of the product is $200.00 per unit and its variable cost is $80.00 per unit.The fixed expense is $300,000 per month.The break-even in monthly unit sales is closest to:

How much will a company's net operating income change if it undertakes an advertising campaign given the following data:

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:

If the company sells 3,500 units, its net operating income should be closest to:

The company's degree of operating leverage is closest to:

Mishoe 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:

The break-even in monthly dollar sales is closest to:

Mason Corporation's selling price was $20 per unit.Fixed expenses totaled $54,000, variable expenses were $14 per unit, and the company reported a profit of $9,000 for the year.The break-even point for Mason Corporation is:

An increase in the number of units sold will decrease a company's break-even point.

In a CVP graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line (sales)and the total fixed expense line.

In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be lower in the company with a higher proportion of fixed expenses in its cost structure.

The contribution margin ratio is closest to:

If sales decline to 2,900 units, the net operating income would be 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