Question 1

All else being equal,which of the following changes would increase a company's net income?

Accepted Answer

A)  An increase in fixed costs 
B)  A decrease in contribution margin 
C)  An increase in variable costs 
D)  A decrease in fixed costs 
A)  An increase in fixed costs 
B)  A decrease in contribution margin 
C)  An increase in variable costs 
D)  A decrease in fixed costs

Question 2

Poole Products Inc.
Poole Products Inc. has the following product information available:
$\begin{array}{ll}
\text { Sales price } & \$ 25 \text { per unit } \
\text { Variable costs } & \$ 10 \text { per unit } \
\text { Fixed costs } & \$ 36000
\end{array}$
-What is the break-even point in units?

Accepted Answer

A)  1029 
B)  1440 
C)  2400 
D)  5400 
A)  1029 
B)  1440 
C)  2400 
D)  5400

Question 3

One of the major assumptions used in CVP analysis is:

Accepted Answer

A)  that number of units sold each year remains the same. 
B)  that in a multiproduct environment,all products are assumed to be sold in identical proportion to total sales. 
C)  that the tax rate is not known. 
D)  that the sales price of a product will not change as volume changes. 
A)  that number of units sold each year remains the same. 
B)  that in a multiproduct environment,all products are assumed to be sold in identical proportion to total sales. 
C)  that the tax rate is not known. 
D)  that the sales price of a product will not change as volume changes.

Question 4

Laverne's Soda Shop wishes to decrease variable costs.Which of the following options should she consider?

Accepted Answer

A)  A decrease in advertising costs 
B)  A decrease in rent 
C)  A decrease in direct labour costs 
D)  An increase in equipment rentals 
A)  A decrease in advertising costs 
B)  A decrease in rent 
C)  A decrease in direct labour costs 
D)  An increase in equipment rentals

Question 5

Carson Cabana's Inc.has the following information available regarding last year's operations:
$\begin{array}{lc}
  \text {  Sales} &\$1500000\
 \text { Variable costs } &\underline{600000}\
 \text {Contribution margin  } &900000\
 \text {  Fixed costs} &\underline{300000\$}\
 \text { Net income } &\underline{600000}\
\end{array}$

The company's operating leverage was:

Accepted Answer

A)  1.5 
B)  .67 
C)  2.5 
D)  .60 
A)  1.5 
B)  .67 
C)  2.5 
D)  .60

Question 6

Last year,Brown Manufacturing had a contribution margin ratio of 40%.This year,fixed expenses are expected to remain at $50 000 and sales are expected to increase by $90 000.What should the contribution margin ratio be this year if the company wishes to increase net income by $31 500?

Accepted Answer

A)  78.75% 
B)  40.00% 
C)  35.00% 
D)  55.56% 
A)  78.75% 
B)  40.00% 
C)  35.00% 
D)  55.56%

Question 7

Charlie’s Hotdog Stand
Charlie’s Hotdog Stand sells hotdogs for $2.50 each. The variable costs per hotdog are $.50. Charlie’s fixed costs are currently $800 per month. Charlie is considering expanding his business to three hotdog stands which will increase fixed costs per month by $1200.

-If Charlie does expand his business to three stands,how many hotdogs will need to be sold per month in order to earn a target profit of $5000?

Accepted Answer

A)  2500 
B)  3100 
C)  3500 
D)  2800 
A)  2500 
B)  3100 
C)  3500 
D)  2800

Question 8

Cameron Corp.
Cameron Corp. has the following product information:
$$\begin{array} { l l } 
\text { Sales price } & \$ 20 \text { per unit } \
\text { Contribution margin ratio } & 35 \% \
\text { Fixed costs } & \$ 59500
\end{array}$$
-How many units need to be sold in order to earn a target profit of $299 950?

Accepted Answer

A)  42 850 
B)  51 350 
C)  34 350 
D)  125 808 
A)  42 850 
B)  51 350 
C)  34 350 
D)  125 808

Question 9

The difference between sales and variable costs is called:

Accepted Answer

A)  net income. 
B)  gross profit 
C)  contribution margin. 
D)  cost of goods manufactured. 
A)  net income. 
B)  gross profit 
C)  contribution margin. 
D)  cost of goods manufactured.

Question 10

Refer to Hunter Inc. information below.
Hunter Inc.
Hunter Inc. sells a unique product with the following information available:
$\begin{array}{ll}
\text { Sales price } & \$ 85 \text { per unit } \
\text { Variable costs } & \$ 25 \text { per unit } \
\text { Fixed Costs } & \$ 10000 \
\text { Units produced and sold } & 1250
\end{array}$
-If one more unit is sold,net income will:

Accepted Answer

A)  decrease by $33. 
B)  increase by $52. 
C)  increase by $60. 
D)  decrease by $8. 
A)  decrease by $33. 
B)  increase by $52. 
C)  increase by $60. 
D)  decrease by $8.

Question 11

In a multiproduct environment,what are the four assumptions used in CVP analysis?
a.
b.
c.
d.

Accepted Answer

a.
The selling price is constant through

Question 12

Operating leverage measures:

Accepted Answer

A)  how sensitive profit is to a change in fixed costs. 
B)  how sensitive profit is to a change in sales volume. 
C)  how sensitive profit is to a change in sales price per unit. 
D)  how sensitive profit is to a change in tax rates. 
A)  how sensitive profit is to a change in fixed costs. 
B)  how sensitive profit is to a change in sales volume. 
C)  how sensitive profit is to a change in sales price per unit. 
D)  how sensitive profit is to a change in tax rates.

Question 13

How many Rubles need to be sold in order for the company to break even?

Accepted Answer

A)  1638 
B)  1668 
C)  819 
D)  2780 
A)  1638 
B)  1668 
C)  819 
D)  2780

Question 14

Carson Products has the following product information available:
$\begin{array}{llcc}
  \text { Sales price } & \text {  $ \$ 20 $ per unit} \
 \text { Variable costs } & \text { $ \$ 4 $ per unit } \
 \text {  Fixed costs} & \text {  $ \$ 50000 $} \
\end{array}$
 
Required: If Carson is in the 40% tax bracket,how many units need to be sold in order to earn an after-tax target profit of $300 000?

Accepted Answer

Sales volume (units)to earn an

Question 15

In a multiproduct environment:

Accepted Answer

A)  cost-volume-profit analysis should not be used. 
B)  only the product with the highest contribution margin should be sold. 
C)  the product with the highest sales prices per unit should account for the majority of the sales. 
D)  a weighted-average contribution margin per unit should be computed for all products produced and sold. 
A)  cost-volume-profit analysis should not be used. 
B)  only the product with the highest contribution margin should be sold. 
C)  the product with the highest sales prices per unit should account for the majority of the sales. 
D)  a weighted-average contribution margin per unit should be computed for all products produced and sold.

Question 16

Angelo's is a locally run and operated pizza parlour.Last month,the restaurant broke-even when 400 pizzas were served.The average variable costs per pizza are $2.50 and fixed costs for the month totalled $6000.What is the average selling price of a pizza?

Accepted Answer

A)  $15.00 
B)  $12.50 
C)  $17.50 
D)  $ 6.00 
A)  $15.00 
B)  $12.50 
C)  $17.50 
D)  $ 6.00

Question 17

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

Accepted Answer

A)  Net income 
B)  Gross profit 
C)  Contribution margin 
D)  Sales revenue 
A)  Net income 
B)  Gross profit 
C)  Contribution margin 
D)  Sales revenue

All else being equal,which of the following changes would increase a company's net income?

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 units?

One of the major assumptions used in CVP analysis is:

Laverne's Soda Shop wishes to decrease variable costs.Which of the following options should she consider?

Last year,Brown Manufacturing had a contribution margin ratio of 40%.This year,fixed expenses are expected to remain at $50 000 and sales are expected to increase by $90 000.What should the contribution margin ratio be this year if the company wishes to increase net income by $31 500?

Cameron Corp. Cameron Corp. has the following product information: Sales price \ 20 per unit Contribution margin ratio 35\% Fixed costs \ 59500 -How many units need to be sold in order to earn a target profit of $299 950?

The difference between sales and variable costs is called:

Refer to Hunter Inc. information below. Hunter Inc. Hunter Inc. sells a unique product with the following information available: Sales price \ 85 per unit Variable costs \ 25 per unit Fixed Costs \ 10000 Units produced and sold 1250 -If one more unit is sold,net income will:

In a multiproduct environment,what are the four assumptions used in CVP analysis? a. b. c. d.

Operating leverage measures:

How many Rubles need to be sold in order for the company to break even?

Carson Products has the following product information available: Sales price \ 20 per unit Variable costs \ 4 per unit Fixed costs \ 50000 Required: If Carson is in the 40% tax bracket,how many units need to be sold in order to earn an after-tax target profit of $300 000?

In a multiproduct environment:

Angelo's is a locally run and operated pizza parlour.Last month,the restaurant broke-even when 400 pizzas were served.The average variable costs per pizza are $2.50 and fixed costs for the month totalled $6000.What is the average selling price of a pizza?

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

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

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Exam 9: Cost-Volume-Profit Analysis

All else being equal,which of the following changes would increase a company's net income?

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 units?

One of the major assumptions used in CVP analysis is:

Laverne's Soda Shop wishes to decrease variable costs.Which of the following options should she consider?

Last year,Brown Manufacturing had a contribution margin ratio of 40%.This year,fixed expenses are expected to remain at $50 000 and sales are expected to increase by $90 000.What should the contribution margin ratio be this year if the company wishes to increase net income by $31 500?

Cameron Corp. Cameron Corp. has the following product information: Sales price \ 20 per unit Contribution margin ratio 35\% Fixed costs \ 59500 -How many units need to be sold in order to earn a target profit of $299 950?

The difference between sales and variable costs is called:

Refer to Hunter Inc. information below. Hunter Inc. Hunter Inc. sells a unique product with the following information available: Sales price \ 85 per unit Variable costs \ 25 per unit Fixed Costs \ 10000 Units produced and sold 1250 -If one more unit is sold,net income will:

In a multiproduct environment,what are the four assumptions used in CVP analysis? a. b. c. d.

Operating leverage measures:

How many Rubles need to be sold in order for the company to break even?

Carson Products has the following product information available: Sales price \ 20 per unit Variable costs \ 4 per unit Fixed costs \ 50000 Required: If Carson is in the 40% tax bracket,how many units need to be sold in order to earn an after-tax target profit of $300 000?

In a multiproduct environment:

Angelo's is a locally run and operated pizza parlour.Last month,the restaurant broke-even when 400 pizzas were served.The average variable costs per pizza are $2.50 and fixed costs for the month totalled $6000.What is the average selling price of a pizza?

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

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters