Question 1

The margin of safety percentage is equal to the margin of safety in dollars divided by total contribution margin.

Accepted Answer

A) True 
 B)False

Question 2

Mancine Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   Required:
a.What is the break-even point in unit sales?
b.Estimate how many units must be sold to achieve a target profit of $50,000.

Accepted Answer

a. @#IMG-DLM&_TB2627_00 Unit sales to break even =

Question 3

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

Accepted Answer

A) $12,240 
B) $318,240 
C) $360,400 
D) $311,973 
A) $12,240 
B) $318,240 
C) $360,400 
D) $311,973

Question 4

Last year Easton Corporation reported sales of $480,000, a contribution margin ratio of 25% and a net loss of $16,000.Based on this information, the break-even point was:

Accepted Answer

A) $435,000 
B) $544,000 
C) $506,000 
D) $600,000 
A) $435,000 
B) $544,000 
C) $506,000 
D) $600,000

Question 5

Schister Systems uses the following data in its Cost-Volume-Profit analyses:   What is total contribution margin if sales volume increases by 20%?

Accepted Answer

A) $80,000 
B) $158,400 
C) $200,000 
D) $144,000 
A) $80,000 
B) $158,400 
C) $200,000 
D) $144,000

Question 6

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

Accepted Answer

A) 3,873 units 
B) 1,740 units 
C) 1,201 units 
D) 2,271 units 
A) 3,873 units 
B) 1,740 units 
C) 1,201 units 
D) 2,271 units

Question 7

The smaller the contribution margin ratio, the smaller the amount of sales required to cover a given amount of fixed expenses.

Accepted Answer

A) True 
 B)False

Question 8

If the sales mix were to shift toward Product B32L with total sales remaining constant, the overall break-even point for the entire company:

Accepted Answer

A) could increase or decrease. 
B) would decrease. 
C) would not change. 
D) would increase. 
A) could increase or decrease. 
B) would decrease. 
C) would not change. 
D) would increase.

Question 9

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 10

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

Accepted Answer

A) $1,148,400 
B) $638,851 
C) $321,552 
D) $446,600 
A) $1,148,400 
B) $638,851 
C) $321,552 
D) $446,600

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 believes that a $14,000 increase in the monthly advertising budget would result in a 150 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 $700 
B) increase of $14,700 
C) decrease of $14,000 
D) decrease of $700 
A) increase of $700 
B) increase of $14,700 
C) decrease of $14,000 
D) decrease of $700

Question 12

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%.The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A) $471,694 
B) $454,054 
C) $1,188,444 
D) $1,144,000 
A) $471,694 
B) $454,054 
C) $1,188,444 
D) $1,144,000

Question 13

Data concerning Dorazio Corporation's single product appear below:   Fixed expenses are $87,000 per month.The company is currently selling 1,000 units per month.Management is considering using a new component that would increase the unit variable cost by $28.Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) increase of $5,600 
B) increase of $33,600 
C) decrease of $5,600 
D) decrease of $33,600 
A) increase of $5,600 
B) increase of $33,600 
C) decrease of $5,600 
D) decrease of $33,600

Question 14

Bethard Corporation produces and sells a single product.Data concerning that product appear below:   Fixed expenses are $354,000 per month.The company is currently selling 5,000 units per month.
Required:
The marketing manager would like to cut the selling price by $8 and increase the advertising budget by $23,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 600 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 Bethard Corporation produces and sells a single...

Question 15

If fixed expenses increase by $10,000 per year, then the sales needed to break even will generally increase by more than $10,000.

Accepted Answer

A) True 
 B)False

Question 16

Lydic Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   The degree of operating leverage is closest to:

Accepted Answer

A) 5.00 
B) 0.20 
C) 16.67 
D) 0.06 
A) 5.00 
B) 0.20 
C) 16.67 
D) 0.06

Question 17

Which of the following would not affect the break-even point?

Accepted Answer

A) number of units sold 
B) variable expense per unit 
C) total fixed expense 
D) selling price per unit 
A) number of units sold 
B) variable expense per unit 
C) total fixed expense 
D) selling price per unit

Question 18

Zaccaria Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.   Required:
a.What is the contribution margin ratio?
b.If sales increase to 5,040 units, what would be the estimated increase in net operating income?
c.If the selling price increases by $4 per unit and the sales volume decreases by 400 units, what would be the estimated net operating income?
d.What is the break-even point in unit sales?
e.What is the margin of safety in dollars?
f.What is the degree of operating leverage?

Accepted Answer

a.CM ratio = Contribution margin ÷ Sales

Question 19

The contribution margin per unit is closest to:

Accepted Answer

A) $15.00 
B) $0.50 
C) $45.00 
D) $60.00 
A) $15.00 
B) $0.50 
C) $45.00 
D) $60.00

Question 20

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

The margin of safety percentage is equal to the margin of safety in dollars divided by total contribution margin.

Mancine Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. Required: a.What is the break-even point in unit sales? b.Estimate how many units must be sold to achieve a target profit of $50,000.

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

Last year Easton Corporation reported sales of $480,000, a contribution margin ratio of 25% and a net loss of $16,000.Based on this information, the break-even point was:

Schister Systems uses the following data in its Cost-Volume-Profit analyses: What is total contribution margin if sales volume increases by 20%?

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

The smaller the contribution margin ratio, the smaller the amount of sales required to cover a given amount of fixed expenses.

If the sales mix were to shift toward Product B32L with total sales remaining constant, the overall break-even point for the entire company:

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

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

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%.The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000.The dollar sales to attain that target profit is closest to:

If fixed expenses increase by $10,000 per year, then the sales needed to break even will generally increase by more than $10,000.

Lydic Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The degree of operating leverage is closest to:

Which of the following would not affect the break-even point?

The contribution margin per unit is closest to:

The break-even point in unit sales 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 margin of safety percentage is equal to the margin of safety in dollars divided by total contribution margin.

Mancine Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. Required: a.What is the break-even point in unit sales? b.Estimate how many units must be sold to achieve a target profit of $50,000.

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

Last year Easton Corporation reported sales of $480,000, a contribution margin ratio of 25% and a net loss of $16,000.Based on this information, the break-even point was:

Schister Systems uses the following data in its Cost-Volume-Profit analyses: What is total contribution margin if sales volume increases by 20%?

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

The smaller the contribution margin ratio, the smaller the amount of sales required to cover a given amount of fixed expenses.

If the sales mix were to shift toward Product B32L with total sales remaining constant, the overall break-even point for the entire company:

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

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

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%.The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000.The dollar sales to attain that target profit is closest to:

If fixed expenses increase by $10,000 per year, then the sales needed to break even will generally increase by more than $10,000.

Lydic Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The degree of operating leverage is closest to:

Which of the following would not affect the break-even point?

The contribution margin per unit is closest to:

The break-even point in unit sales 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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