Exam 9: Cost-Volume-Profit Analysis

Refer to the Bergman Inc. information below. Bergman Inc. Bergman Inc. has the following product information available: Sales price \ 12 per unit Variable costs \ 4 per unit Fixed costs \ 15600 Units sold 10400 -What is the break-even point in units?

Harrison Inc.has a contribution margin ratio of 60% and fixed costs of $91 000. Required: A. If Harrison ignores income taxes, what do sales dollars need to be in order to have net income of $\$ 500000$ ? B. If Harrison takes into account income taxes, and the company is in the $40 \%$ tax bracket, what do sales dollars need to be in order to have an after-tax net income of $\$ 500000$ ?

Which of the following would you not find on a traditional income statement?

Village Manufacturing Village Manufacturing produces two types of products ? Card Games and Puzzles. The following information is available related to each product: Sales price per unit \ 6.00 \ 15.00 Variable costs per unit 2.00 3.50 60% of the products sold are Card Games and 40% are Puzzles. -If total fixed costs are $24 500,how many Puzzles need to be sold in order for the company to break even?

Assuming a company has a positive contribution margin,which of the following changes will cause net income to increase?

Harrison Manufacturing Harrison Manufacturing has the following product information available: Sales price \ 50 per unit Variable costs \ 26 per unit Fixed costs \ 87600 -What is the break-even point in units?

Bradford Products has the following product information available: Sales price \ 25.00 per unit Variable costs \ 15.00 per unit Fixed Costs (total) \ 50000 Required: Answer each of the following independent questions. A. What is the contributidn margin per unit? B. What is the contribution margin ratio? C. How many units must be sold in order to break even? D. How many units must be sold in order to earn a target profit of \$400 000? (ignore taxes) E. Bradford is considering an advertising campaign that has a cost of 7 Dod The marketing department estimates that the campaign will increase sales by 1250 000. Should the company have the advertising campaign? Why ar why not? Show you calculations.

A company with a high level of operating leverage will:

Vincent Products manufactures a particular item with the following information: Sales price \ 80 per unit Variable costs \ 30 per unit Fixed Costs \ 5 per unit Units produced and sold 10000 Required: Calculate the following based on the above information: A. Contribution margan per unit B. Contribution margin ratio C. Break-even point in units D. Break-even point in sales dollars

Chapman Products produces a unique item with the following information: Sales price \ 100 per unit Variable costs \ 40 per unit Fixed Costs (total) \ 60000 Unite sold 5000 Required: Calculate the following based on the above information: A. Net incume B. Contribution marpin per unit C. Contribution marpin ratio D. If Chapman sells 500 more adkitional units, by what amount will net income increase? E. If Chapman has an additional $\$ 20000$ in sales, by what anount will net income increase?

Which of the following statements is most likely true if Red Inc.has an operating leverage of 2.0 while Blue Corp.has an operating leverage of 1.4?

Greenwood Manufacturing has the following product information: Sales price \4 0.00 per unit Variable costs \ 18.00 per unit Fixed Costs (total) \9 9000 Required: Calculate the following based on the above information: A What is the break-even paint in units? B. What is the break-even point in sales dollars? C. How many units need to be sold in order for the company to eann a target-profit of 4429 000? (ignore taxes)

Floyd's Barbershop has fixed costs of $3000 per month.Floyd regularly performs 400 haircuts a month and he does not anticipate this to change.Each haircut has a variable cost of $4.00.If Floyd would like to earn a target profit of $2000,what does he need to charge for each haircut?

For each of the following statements,fill in the blank with either the word increase,decrease,or stay the same. a. All else being equal,as the sales price per unit increases,the contribution margin per unit will _________________. b. All else being equal,as variable costs per unit increase,the contribution margin per unit will _________________. c. All else being equal,as total fixed costs increase,the contribution margin per unit will ________________. d. All else being equal,as sales volume increases,total fixed costs will _______________. e. All else being equal,as sales volume increases,total variable costs will _____________.

Refer to the Joe’s Coffee House information below. Joe’s Coffee House Joe’s Coffee House has the following information available for the month of July: Sales (2500 cups) \ 7500 Variable costs 3250 Fixed costs 4000 Net Income \ 250 -All else being equal,if Joe's increases the sales price per unit by 10%,net income will:

Refer to the Stealth Software Inc. information below. Stealth Software Inc. Stealth Software Inc. has the following information available from last year for one of its software products: Sales revenue \ 30000 Variable costs 4950 Fixed costs 4000 Net income \ 21050 -If the software had a sales price of $30 per unit,what is the variable cost per unit?

All else being equal,which of the following would cause the contribution margin to increase?

Cameron Corp. Cameron Corp. has the following product information: Sales price \ 20 per unit Contribution margin ratio 35\% Fixed costs \ 59500 -What is the break-even point in sales dollars?

Hillary's Restaurant has the following information available regarding last year's operations: Sales \ 900000 Variable costs Contribution margin 600000 Fixed costs Net income The company's operating leverage was:

Poole Products Inc. Poole Products Inc. has the following product information available: Sales price \ 25 per unit Variable costs \ 10 per unit Fixed costs \ 36000 -What is the break-even point in sales dollars?