Question 1

The contribution margin ratio can be calculated by subtracting the variable cost ratio from one.

Accepted Answer

A) True 
 B)False

Question 2

Fixed expenses that cannot be directly traced to individual segments and that are unaffected by the elimination of any one segment.

Accepted Answer

A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix 
A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix

Question 3

Fixed expenses that cannot be directly traced to individual segments are called

Accepted Answer

A)  cost structure. 
B)  direct fixed expenses. 
C)  operating leverage. 
D)  common fixed expenses. 
E)  indifference point. 
A)  cost structure. 
B)  direct fixed expenses. 
C)  operating leverage. 
D)  common fixed expenses. 
E)  indifference point.

Question 4

Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. What is the break-even point in units?

Accepted Answer

A)  640 
B)  1,260 
C)  210 
D)  360 
E)  504 
A)  640 
B)  1,260 
C)  210 
D)  360 
E)  504

Question 5

Match each item with the correct statement below.
-break-even point

Accepted Answer

A) horizontal-axis of CVP graph 
B) vertical-axis of CVP graph 
C) slope of revenue line 
D) slope of cost line 
E) point where the total revenue line and the total cost line intersect 
A) horizontal-axis of CVP graph 
B) vertical-axis of CVP graph 
C) slope of revenue line 
D) slope of cost line 
E) point where the total revenue line and the total cost line intersect

Question 6

Figure 4-4.Yerke Company makes jungle gyms and tree houses for children. For jungle gyms, the price is $120 and variable expenses are $90 per unit. For tree houses, the price is $200 and variable expenses are $100. Total fixed expenses are $253,750. Last year, Yerke sold 12,000 gyms and 4,000 tree houses.
-Refer to Figure 4-4. Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units. What is the sales revenue at break-even?

Accepted Answer

A)  $411,250 
B)  $253,700 
C)  $1,076,250 
D)  $665,000 
E)  $140,000 
A)  $411,250 
B)  $253,700 
C)  $1,076,250 
D)  $665,000 
E)  $140,000

Question 7

Most firms would like to earn operating income equal to the break-even point.

Accepted Answer

A) True 
 B)False

Question 8

If variable expenses decrease and the price increases, the break-even point decreases.

Accepted Answer

A) True 
 B)False

Question 9

The following information has been provided for Walsh Corporation:
  Required: Prepare a cost-volume-profit graph identifying the following items:
A.) Total cost line
B.) Total fixed cost line
C.) Total variable cost line
D.) Total revenue line
E.) Loss area
F.) Profit area
G.) Compute the break-even point in units
H.) Compute the break-even point in sales dollars

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Break-even point =

Question 10

Sales mix is the relative combination of

Accepted Answer

A)  inputs required to produce a product. 
B)  outputs produced by a firm. 
C)  products sold by a firm. 
D)  distribution channels used by a firm. 
E)  resources used to produce a product. 
A)  inputs required to produce a product. 
B)  outputs produced by a firm. 
C)  products sold by a firm. 
D)  distribution channels used by a firm. 
E)  resources used to produce a product.

Question 11

Place Corporation had the following income statement for the current year:
   Required:

Accepted Answer

The answer of Place Corporation had the following income statement...

Question 12

Assume the following information:   What volume of sales dollars is needed to break even?

Accepted Answer

A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000 
A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000

Question 13

Clean Company sells its product for $80. In addition, it has a variable cost ratio of 60% and total fixed costs of $8,000. What is the break-even point in sales dollars for Baker Company?

Accepted Answer

A)  $4,800 
B)  $32,000 
C)  $20,000 
D)  $8,000 
A)  $4,800 
B)  $32,000 
C)  $20,000 
D)  $8,000

Question 14

McCallen Company expects to produce and sell 500 units next month. Data on costs follows:
  Required:

Accepted Answer

The answer of McCallen Company expects to produce and sell...

Question 15

Assume the following information:   How many units must be sold to generate a profit of $45,000?

Accepted Answer

A)  3,000 units 
B)  2,500 units 
C)  4,500 units 
D)  3,750 units 
A)  3,000 units 
B)  2,500 units 
C)  4,500 units 
D)  3,750 units

Question 16

Stepford Company makes dolls. The price is $10 and the variable expense per unit is $6. What is the contribution margin ratio?

Accepted Answer

A)  62.5% 
B)  37.5% 
C)  55% 
D)  40% 
E)  60% 
A)  62.5% 
B)  37.5% 
C)  55% 
D)  40% 
E)  60%

Question 17

How can a multi-product firm determine its break-even point?

Accepted Answer

The firm can determine its break-even po

Question 18

Newman Company expects to produce and sell 2,000 units next month. Data on costs follows:
   Required:

Accepted Answer

The answer of Newman Company expects to produce and sell...

Question 19

At a monthly sales volume of $25,000, a company incurs variable costs of $19,000 and fixed costs of $6,000.
Required: Determine each of the following values:

Accepted Answer

The answer of At a monthly sales volume of $25,000,...

The contribution margin ratio can be calculated by subtracting the variable cost ratio from one.

Fixed expenses that cannot be directly traced to individual segments and that are unaffected by the elimination of any one segment.

Fixed expenses that cannot be directly traced to individual segments are called

Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. What is the break-even point in units?

Match each item with the correct statement below. -break-even point

Most firms would like to earn operating income equal to the break-even point.

If variable expenses decrease and the price increases, the break-even point decreases.

Sales mix is the relative combination of

Place Corporation had the following income statement for the current year: Required:

Assume the following information: What volume of sales dollars is needed to break even?

Clean Company sells its product for $80. In addition, it has a variable cost ratio of 60% and total fixed costs of $8,000. What is the break-even point in sales dollars for Baker Company?

McCallen Company expects to produce and sell 500 units next month. Data on costs follows: Required:

Assume the following information: How many units must be sold to generate a profit of $45,000?

Stepford Company makes dolls. The price is $10 and the variable expense per unit is $6. What is the contribution margin ratio?

How can a multi-product firm determine its break-even point?

Newman Company expects to produce and sell 2,000 units next month. Data on costs follows: Required:

At a monthly sales volume of $25,000, a company incurs variable costs of $19,000 and fixed costs of $6,000. Required: Determine each of the following values:

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Cost-Volume-Profit Analysis: a Managerial Planning Tool

The contribution margin ratio can be calculated by subtracting the variable cost ratio from one.

Fixed expenses that cannot be directly traced to individual segments and that are unaffected by the elimination of any one segment.

Fixed expenses that cannot be directly traced to individual segments are called

Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. What is the break-even point in units?

Match each item with the correct statement below. -break-even point

Most firms would like to earn operating income equal to the break-even point.

If variable expenses decrease and the price increases, the break-even point decreases.

Sales mix is the relative combination of

Place Corporation had the following income statement for the current year: Required:

Assume the following information: What volume of sales dollars is needed to break even?

Clean Company sells its product for $80. In addition, it has a variable cost ratio of 60% and total fixed costs of $8,000. What is the break-even point in sales dollars for Baker Company?

McCallen Company expects to produce and sell 500 units next month. Data on costs follows: Required:

Assume the following information: How many units must be sold to generate a profit of $45,000?

Stepford Company makes dolls. The price is $10 and the variable expense per unit is $6. What is the contribution margin ratio?

How can a multi-product firm determine its break-even point?

Newman Company expects to produce and sell 2,000 units next month. Data on costs follows: Required:

At a monthly sales volume of $25,000, a company incurs variable costs of $19,000 and fixed costs of $6,000. Required: Determine each of the following values:

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters