Question 1

When the operating income at the breakeven point (BEP)is ________,no income taxes are paid.

Accepted Answer

A) zero 
B) one 
C) one hundred 
D) one thousand 
E) ten thousand 
A) zero 
B) one 
C) one hundred 
D) one thousand 
E) ten thousand

Question 2

A shelter sells products and it contributes proceeds to needy people in the community.The selling price of a product is $80.00 and the manager at the shelter reported that the variable cost per unit is $25.00.
Required:
Compute the contribution margin per unit.

Accepted Answer

A) $40 per unit 
B) $45 per unit 
C) $50 per unit 
D) $55 per unit 
E) $60 per unit 
A) $40 per unit 
B) $45 per unit 
C) $50 per unit 
D) $55 per unit 
E) $60 per unit

Question 3

Just as a cost driver is any factor that affects costs,a ________ ________ is a variable,such as volume,that casually affects revenues.

Accepted Answer

A) mixed cost 
B) fixed cost 
C) revenue mover 
D) revenue driver 
E) cost factor 
A) mixed cost 
B) fixed cost 
C) revenue mover 
D) revenue driver 
E) cost factor

Question 4

Which of the following is not a reason why U.S.companies move their manufacturing operations to other countries?

Accepted Answer

A) Operate in lower-cost countries. 
B) To reduce costs and operating leverage. 
C) To increase costs and increase operating leverage. 
D) To substitute high fixed costs with lower variable costs. 
E) Shift call centers to other countries because it reduces costs. 
A) Operate in lower-cost countries. 
B) To reduce costs and operating leverage. 
C) To increase costs and increase operating leverage. 
D) To substitute high fixed costs with lower variable costs. 
E) Shift call centers to other countries because it reduces costs.

Question 5

Managers must meet target goals to achieve target operating income.Write a brief essay and define the breakeven point (BEP).What information do the managers obtain from this analysis?

Accepted Answer

The breakeven point (BEP)is defined as t

Question 6

When managers at an organization have operating income at the breakeven point (BEP)that equal $0,they do not have to pay income taxes because there is no operating income.

Accepted Answer

A) True 
 B)False

Question 7

Organizations that have a low margin of safety have an increased risk of loss.

Accepted Answer

A) True 
 B)False

Question 8

Sally's Optimist Club promotes optimism to the youth in Virginia.If the club has a degree of operating leverage of 3.0 and the sales increase by 25%,then:

Accepted Answer

A) total variable costs will increase by 75%. 
B) total variable costs will increase by 50%. 
C) total variable costs will not change. 
D) profit will increase by 30%. 
E) profit will increase by 75%. 
A) total variable costs will increase by 75%. 
B) total variable costs will increase by 50%. 
C) total variable costs will not change. 
D) profit will increase by 30%. 
E) profit will increase by 75%.

Question 9

Unlike contribution margin,gross margin can be expressed as a total,as an amount per unit,or as a percentage.

Accepted Answer

A) True 
 B)False

Question 10

Write a short essay and define gross margin.What does gross margin measure? Discuss the similarities and differences between contribution margin and gross margin.

Accepted Answer

Gross margin measures how much a company

Question 11

A key step managers utilize is to take the target net income number and convert it into the corresponding target operating income number.

Accepted Answer

A) True 
 B)False

Question 12

The term that is used to identify the quantity of output sold at which total revenues equal total costs and that quantity of output sold that results in $0 operating income is:

Accepted Answer

A) contribution margin. 
B) breakeven point (BEP). 
C) contribution margin per unit. 
D) contribution margin percentage. 
E) contribution income statement. 
A) contribution margin. 
B) breakeven point (BEP). 
C) contribution margin per unit. 
D) contribution margin percentage. 
E) contribution income statement.

Question 13

Acme Chimney Service reported the following information:
Required:
 
Required:
Compute the breakeven point in bundles.

Accepted Answer

A) 8 
B) 16 
C) 4,250 
D) 4,350 
E) 6,000 
A) 8 
B) 16 
C) 4,250 
D) 4,350 
E) 6,000

Question 14

CVP analysis helps managers evaluate only the fixed-cost structures.

Accepted Answer

A) True 
 B)False

Question 15

CVP-based sensitivity analysis highlights the risks and returns as fixed costs are substituted for variable costs in a company's cost structure.

Accepted Answer

A) True 
 B)False

Question 16

An example of an output at a university is:

Accepted Answer

A) passenger miles. 
B) room-nights occupied. 
C) patient days. 
D) student credit-hours. 
E) telephone call center hours. 
A) passenger miles. 
B) room-nights occupied. 
C) patient days. 
D) student credit-hours. 
E) telephone call center hours.

Question 17

Managers frequently confuse gross margin and contribution margin because they are often identical in the case of merchandising companies because cost of goods sold equals the variable cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 18

When managers evaluate net income,CVP calculations for target income must be stated in terms of target operating income.

Accepted Answer

A) True 
 B)False

Question 19

The manager at the store needs to determine the breakeven revenues associated with the new and dynamic power blender.The fixed costs associated with the blender are $3,000 and the contribution margin is 50%.
Required:
Compute the breakeven revenue.

Accepted Answer

A) $.16 
B) $160 
C) $6,000 
D) $7,500 
E) $15,000 
A) $.16 
B) $160 
C) $6,000 
D) $7,500 
E) $15,000

Question 20

Managers focus on the analysis of target net income instead of target operating income because it changes the breakeven point (BEP).

Accepted Answer

A) True 
 B)False

When the operating income at the breakeven point (BEP)is ________,no income taxes are paid.

A shelter sells products and it contributes proceeds to needy people in the community.The selling price of a product is $80.00 and the manager at the shelter reported that the variable cost per unit is $25.00. Required: Compute the contribution margin per unit.

Just as a cost driver is any factor that affects costs,a is a variable,such as volume,that casually affects revenues.

Which of the following is not a reason why U.S.companies move their manufacturing operations to other countries?

Managers must meet target goals to achieve target operating income.Write a brief essay and define the breakeven point (BEP).What information do the managers obtain from this analysis?

When managers at an organization have operating income at the breakeven point (BEP)that equal $0,they do not have to pay income taxes because there is no operating income.

Organizations that have a low margin of safety have an increased risk of loss.

Sally's Optimist Club promotes optimism to the youth in Virginia.If the club has a degree of operating leverage of 3.0 and the sales increase by 25%,then:

Unlike contribution margin,gross margin can be expressed as a total,as an amount per unit,or as a percentage.

Write a short essay and define gross margin.What does gross margin measure? Discuss the similarities and differences between contribution margin and gross margin.

A key step managers utilize is to take the target net income number and convert it into the corresponding target operating income number.

The term that is used to identify the quantity of output sold at which total revenues equal total costs and that quantity of output sold that results in $0 operating income is:

Acme Chimney Service reported the following information: Required: Required: Compute the breakeven point in bundles.

CVP analysis helps managers evaluate only the fixed-cost structures.

CVP-based sensitivity analysis highlights the risks and returns as fixed costs are substituted for variable costs in a company's cost structure.

An example of an output at a university is:

Managers frequently confuse gross margin and contribution margin because they are often identical in the case of merchandising companies because cost of goods sold equals the variable cost of goods purchased.

When managers evaluate net income,CVP calculations for target income must be stated in terms of target operating income.

The manager at the store needs to determine the breakeven revenues associated with the new and dynamic power blender.The fixed costs associated with the blender are $3,000 and the contribution margin is 50%. Required: Compute the breakeven revenue.

Managers focus on the analysis of target net income instead of target operating income because it changes the breakeven point (BEP).

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 3: Cost-Volume-Profit Analysis

When the operating income at the breakeven point (BEP)is ________,no income taxes are paid.

A shelter sells products and it contributes proceeds to needy people in the community.The selling price of a product is $80.00 and the manager at the shelter reported that the variable cost per unit is $25.00. Required: Compute the contribution margin per unit.

Just as a cost driver is any factor that affects costs,a ________ ________ is a variable,such as volume,that casually affects revenues.

Which of the following is not a reason why U.S.companies move their manufacturing operations to other countries?

Managers must meet target goals to achieve target operating income.Write a brief essay and define the breakeven point (BEP).What information do the managers obtain from this analysis?

When managers at an organization have operating income at the breakeven point (BEP)that equal $0,they do not have to pay income taxes because there is no operating income.

Organizations that have a low margin of safety have an increased risk of loss.

Sally's Optimist Club promotes optimism to the youth in Virginia.If the club has a degree of operating leverage of 3.0 and the sales increase by 25%,then:

Unlike contribution margin,gross margin can be expressed as a total,as an amount per unit,or as a percentage.

Write a short essay and define gross margin.What does gross margin measure? Discuss the similarities and differences between contribution margin and gross margin.

A key step managers utilize is to take the target net income number and convert it into the corresponding target operating income number.

The term that is used to identify the quantity of output sold at which total revenues equal total costs and that quantity of output sold that results in $0 operating income is:

Acme Chimney Service reported the following information: Required: Required: Compute the breakeven point in bundles.

CVP analysis helps managers evaluate only the fixed-cost structures.

CVP-based sensitivity analysis highlights the risks and returns as fixed costs are substituted for variable costs in a company's cost structure.

An example of an output at a university is:

Managers frequently confuse gross margin and contribution margin because they are often identical in the case of merchandising companies because cost of goods sold equals the variable cost of goods purchased.

When managers evaluate net income,CVP calculations for target income must be stated in terms of target operating income.

The manager at the store needs to determine the breakeven revenues associated with the new and dynamic power blender.The fixed costs associated with the blender are $3,000 and the contribution margin is 50%. Required: Compute the breakeven revenue.

Managers focus on the analysis of target net income instead of target operating income because it changes the breakeven point (BEP).

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Just as a cost driver is any factor that affects costs,a is a variable,such as volume,that casually affects revenues.