Assume the following information: $\begin{array}{llr} \text { Selling price per unit} &\$150\\ \text { Contribution margin ratio } &40\%\\ \text { Total fixed costs } &\$225,000 \end{array}$ How many units must be sold to generate a before-tax profit of $45,000?

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

Assume the following information: $\begin{array}{llr} \text { Variable cost ratio } &80\%\\ \text { Total fixed costs } &\$60,000\\ \end{array}$ What volume of sales dollars is needed to break even?

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

Malone Printing Company projected the following information for next year: $\begin{array}{lr} \text { Selling price per unit } & \$ 75.00 \\ \text { Contribution margin per unit } & \$ 30.00 \\ \text { Total fixed costs } & \$ 120,000 \\ \text { Tax rate } & 40 \% \end{array}$ What is the break-even point in dollars?

A) $120,000 B) $200,000 C) $300,000 D) $500,000 A) $120,000 B) $200,000 C) $300,000 D) $500,000

The Kringel Company provides the following information: $\begin{array}{lr} \text { Sales }(200,000 \text { units) } & \$ 500,000 \\ \text { Manufacturing costs: } & \\ \text { Variable } & 170,000\\ \text { Fixed } &30,000 \\ \text { Selling and administrative costs: } & \\ \text { Variable } &80,000 \\ \text { Fixed } & 20,000 \end{array}$ -Refer to the figure.What is the variable cost per unit for Kringel?

A) $0.40 B) $0.85 C) $1.25 D) $2.50 A) $0.40 B) $0.85 C) $1.25 D) $2.50

The income statement for Thomas Manufacturing Company is as follows: \[\begin{array} { l r } \text { Sales (10,000 units) } & \$ 120,000 \\ \text { Variable expenses } & \underline{72,000} \\ \text { Contribution margin } & \$ 48,000 \\ \text { Fixed expenses } &\underline{ 36,000 }\\ \text { Operating incame } &\underline{ \$12,000} \end{array}\] What is the contribution margin per unit?

A) $1.20 B) $4.80 C) $7.20 D) $7.80 A) $1.20 B) $4.80 C) $7.20 D) $7.80

Exam 3: Cost-Volume-Profit Analysis

Gilbert Incorporated had the following information: Activity Driver Unit Variable cost Level of Activity Driver Units sold \ 20 - Setups 1,000 40 Engineering hours 60 1,000 Other data: Total fixed costs (traditional) \ 100,000 Total fixed costs (ABC) \ 50,000 Unit selling price \ 40 a.Calculate the break-even point in units using the traditional approach to CVP analysis. b.Calculate the break-even point in units using the activity-based costing approach to CVP analysis. c.Calculate the number of units that must be sold to earn a before-tax profit of $40,000. d.Suppose Gilbert could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 900.How many units must be sold to break even in this case?

(Essay)

4.9/5

(86)

Question 41

At a price of $32,the estimated monthly sales of a product are 12,000 units.Variable costs include manufacturing costs of $18 and distribution costs of $6.Fixed costs are $40,000 per month. Determine each of the following values: a.Unit contribution margin b.Monthly break-even unit sales volume c.Before-tax monthly profit d.Monthly margin of safety in units

(Essay)

5.0/5

(76)

Question 42

Assume the following information: Selling price per unit \1 50 Contribution margin ratio 40\% Total fixed costs \2 25,000 How many units must be sold to generate a before-tax profit of $45,000?

(Multiple Choice)

5.0/5

(93)

Question 43

What is the definition of the term margin of safety?

(Multiple Choice)

4.8/5

(71)

Question 44

How does sales mix impact profits?

(Multiple Choice)

4.9/5

(79)

Question 45

Which of the following equations is used to calculate cost-volume-profit?

(Multiple Choice)

4.8/5

(89)

Question 46

What is represented by a profit-volume graph?

(Multiple Choice)

4.8/5

(77)

Question 47

In 2011,Angel's Bath and Body Shop had variable costs of $27,000,fixed costs of $18,000,and a net loss of $4,500. What is the annual sales volume required for Angel's to have a before-tax income of $18,000?

(Multiple Choice)

4.8/5

(81)

Question 48

What does the term "sales mix" refer to?

(Multiple Choice)

4.8/5

(70)

Question 49

Assume the following information: Variable cost ratio 80\% Total fixed costs \6 0,000 What volume of sales dollars is needed to break even?

(Multiple Choice)

4.7/5

(63)

Question 50

How are income taxes treated in cost-volume-profit analysis?

(Multiple Choice)

5.0/5

(85)

Question 51

Assuming all other things are the same,what must have happened to the contribution margin per unit if there was an increase in the break-even point?

(Multiple Choice)

4.9/5

(84)

Question 52

Dirth Company sells only one product at a regular price of $7.50 per unit.Variable expenses are 60 percent of sales and fixed expenses are $30,000.Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales. - What is the new break-even point in units for Dirth Company when the selling price is $6.00?

(Multiple Choice)

4.9/5

(86)

Question 53

Malone Printing Company projected the following information for next year: Selling price per unit \ 75.00 Contribution margin per unit \ 30.00 Total fixed costs \ 120,000 Tax rate 40\% What is the break-even point in dollars?

(Multiple Choice)

4.9/5

(77)

Question 54

The Kringel Company provides the following information: Sales (200,000 units) \ 500,000 Manufacturing costs: Variable 170,000 Fixed 30,000 Selling and administrative costs: Variable 80,000 Fixed 20,000 -Refer to the figure.What is the variable cost per unit for Kringel?

(Multiple Choice)

4.9/5

(68)

Question 55

Baker Company sells its product for $60.In addition,it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in sales dollars for Baker Company?

(Multiple Choice)

4.9/5

(93)

Question 56

The Young Manufacturing Company produces the following three products: Hammers Saws Selling price per unit \ 40 \ 16 \ 50 Variable costs per unit 28 12 30 tribution per unit \ 12 \ 4 \ 20 Fixed costs are $76,000 per year. Fifty percent of all sales in units are hammers,30 percent are screwdrivers,and 20 percent are saws. Calculate the following values: a.Break-even point in total units b.Number of hammers that will be sold at break-even c.Total sales in units to obtain a before-tax profit of $19,000

(Essay)

4.8/5

(76)

Question 57

What are direct fixed costs in multiple-product analysis?

(Multiple Choice)

4.8/5

(88)

Question 58

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units) \ 120,000 Variable expenses Contribution margin \ 48,000 Fixed expenses Operating incame What is the contribution margin per unit?

(Multiple Choice)

4.9/5

(86)

Question 59

The Richard Company has an operating leverage of 2.Sales for the current year are $100,000 with a contribution margin of $50,000.Sales are expected to be $150,000 for the following year.Operating income for the following year can be expected to increase by what amount over the current year?

(Multiple Choice)

4.8/5

(81)

Question 60

Assume the following information: Selling price per unit \1 50 Contribution margin ratio 40\% Total fixed costs \2 25,000 How many units must be sold to generate a before-tax profit of $45,000?

What is the definition of the term margin of safety?

How does sales mix impact profits?

Which of the following equations is used to calculate cost-volume-profit?

What is represented by a profit-volume graph?

In 2011,Angel's Bath and Body Shop had variable costs of $27,000,fixed costs of $18,000,and a net loss of $4,500. What is the annual sales volume required for Angel's to have a before-tax income of $18,000?

What does the term "sales mix" refer to?

Assume the following information: Variable cost ratio 80\% Total fixed costs \6 0,000 What volume of sales dollars is needed to break even?

How are income taxes treated in cost-volume-profit analysis?

Assuming all other things are the same,what must have happened to the contribution margin per unit if there was an increase in the break-even point?

Malone Printing Company projected the following information for next year: Selling price per unit \ 75.00 Contribution margin per unit \ 30.00 Total fixed costs \ 120,000 Tax rate 40\% What is the break-even point in dollars?

The Kringel Company provides the following information: Sales (200,000 units) \ 500,000 Manufacturing costs: Variable 170,000 Fixed 30,000 Selling and administrative costs: Variable 80,000 Fixed 20,000 -Refer to the figure.What is the variable cost per unit for Kringel?

Baker Company sells its product for $60.In addition,it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in sales dollars for Baker Company?

What are direct fixed costs in multiple-product analysis?

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units) \ 120,000 Variable expenses Contribution margin \ 48,000 Fixed expenses Operating incame What is the contribution margin per unit?

The Richard Company has an operating leverage of 2.Sales for the current year are $100,000 with a contribution margin of $50,000.Sales are expected to be $150,000 for the following year.Operating income for the following year can be expected to increase by what amount over the current year?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters