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 contribution margin ratio for Kringel?

A) 0.16 B) 0.34 C) 0.50 D) 0.76 A) 0.16 B) 0.34 C) 0.50 D) 0.76

The income statement for Thomas Manufacturing Company is as follows: $\begin{array}{lr} \text { Sales }(10,000 \text { units }) & \$ 120,000 \\ \text { Variable expenses } & 72,000 \\ \text { Contribution margin } & \$ 48,000 \\ \text { Fixed expenses } & \$ 36,000 \\ \text { Operating income } & \$ 12,000 \end{array}$ - If sales increase by 1,000 units,what will happen to profit?

A) It will increase by $1,200. B) It will increase by $4,800. C) It will increase by $7,200. D) It will increase by $12,000. A) It will increase by $1,200. B) It will increase by $4,800. C) It will increase by $7,200. D) It will increase by $12,000.

Thomas Company had the following information: $\begin{array}{lcc} \underline{\text { Activity Driver}}& \underline{\text { Unit Variable Cost }}&\underline{\text { Level of Activity Driver}}\\ \text { Units sold } & \$ 20 & -- \\ \text { Setups } & 1,000 & 80 \\ \text { Engineering hours } & 60 &2,000 \\ \text { Other data: } & & \end{array}$ $\begin{array}{lc} \text { Total fixed costs (traditional) } & \$ 800,000 \\ \text { Total fixed costs (ABC) } & \$ 400,000 \\ \text { Unit selling price } & \$ 40 \end{array}$ -How many units need to be sold to produce a before-tax profit of $120,000 using ABC?

A) 21,000 units B) 36,000 units C) 51,000 units D) 81,000 units A) 21,000 units B) 36,000 units C) 51,000 units D) 81,000 units

The Allen Company had the following income statement for the month of July: $\begin{array}{c} \text { Allen Company}\\ \text { Income Statement}\\ \text { For the Month of July}\\\\ \begin{array}{lrr} \text { Sales }(\$ 60 \times 10,000) & & \$ 600,000 \\ \text { Cost of goods sold: } & & \\ \text { Direct materials }(\$ 12 \times 10,000) & \$ 120,000 \\ \text { Direct labour }(\$ 9 \times 10,000)& 90,000 & \\ \text { Variable factory overhead }(\$ 7.50 \times 10,000)& 75,000 \\ \text { Fixed factory overhead } & \underline{120,000} & \underline{405,000} \\ \text { Gross profit } & & \$ 195,000 \\ \text { Selling and administrative expenses: } \\ \text { Variable }(\$ 1.50 \times 10,000) & \$ 15,000 & \\ \text { Fixed }& \underline{90,000} & \underline{105,000} \\ \text { Operating income }& & \$ 90,000 \end{array}\end{array}$ -What is the sales volume required to earn a profit of $9,000?

A) 3,300 units B) 4,300 units C) 7,300 units D) 10,000 units A) 3,300 units B) 4,300 units C) 7,300 units D) 10,000 units

The income statement for Thomas Manufacturing Company is as follows: $\begin{array}{lr} \text { Sales }(10,000 \text { units }) & \$ 120,000 \\ \text { Variable expenses } & 72,000 \\ \text { Contribution margin } & \$ 48,000 \\ \text { Fixed expenses } & \$ 36,000 \\ \text { Operating income } & \$ 12,000 \end{array}$ - If sales increase by $60,000,what will happen to profit?

A) It will increase by $6,000. B) It will increase by $24,000. C) It will increase by $36,000. D) It will increase by $60,000. A) It will increase by $6,000. B) It will increase by $24,000. C) It will increase by $36,000. D) It will increase by $60,000.

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 total contribution margin for Kringel?

A) $50,000 B) $200,000 C) $250,000 D) $500,000 A) $50,000 B) $200,000 C) $250,000 D) $500,000

Lewis Production Company had the following projected information: $\begin{array}{lr} \text { Selling price per unit } & \$ 150 \\ \text { Variable cost per unit } & \$ 90 \\ \text { Total fixed costs } & \$300,000 \end{array}$ What is the contribution margin ratio?

A) 0.400 B) 0.600 C) 1.667 D) 2.500 A) 0.400 B) 0.600 C) 1.667 D) 2.500

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 ratio?

A) 30% B) 40% C) 60% D) 100% A) 30% B) 40% C) 60% D) 100%

Exam 3: Cost-Volume-Profit Analysis

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 contribution margin ratio for Kringel?

(Multiple Choice)

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Question 61

Place Corporation had the following income statement for the current year: Sales \ 25,000 Variable expenses 15,000 Contribution margin \ 10,000 Fixed expenses \ 4,000 Operating income \ 6,000 a.Calculate the operating leverage ratio. b.If sales increase by 20 percent,what will be the percentage change in income? c.If sales increase by $15,000,how much will income increase?

(Essay)

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Question 62

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units ) \ 120,000 Variable expenses 72,000 Contribution margin \ 48,000 Fixed expenses \ 36,000 Operating income \ 12,000 - If sales increase by 1,000 units,what will happen to profit?

(Multiple Choice)

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Question 63

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 contribution margin ratio when the selling price is reduced to $6 per unit?

(Multiple Choice)

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Question 64

Which item is considered in cost-volume-profit analysis?

(Multiple Choice)

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Question 65

Thomas Company had the following information: Units sold \ 20 -- Setups 1,000 80 Engineering hours 60 2,000 Other data: Total fixed costs (traditional) \ 800,000 Total fixed costs (ABC) \ 400,000 Unit selling price \ 40 -How many units need to be sold to produce a before-tax profit of $120,000 using ABC?

(Multiple Choice)

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Question 66

The Allen Company had the following income statement for the month of July: Allen Company Income Statement For the Month of July Sales (\ 60\times10,000) \ 600,000 Cost of goods sold: Direct materials (\ 12\times10,000) \ 120,000 Direct labour (\ 9\times10,000) 90,000 Variable factory overhead (\ 7.50\times10,000) 75,000 Fixed factory overhead Gross profit \ 195,000 Selling and administrative expenses: Variable (\ 1.50\times10,000) \ 15,000 Fixed Operating income \ 90,000 -What is the sales volume required to earn a profit of $9,000?

(Multiple Choice)

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Question 67

Assuming all other things are equal,what must have happened to the fixed costs if there was a decrease in the break-even point?

(Multiple Choice)

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Question 68

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

(Multiple Choice)

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Question 69

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units ) \ 120,000 Variable expenses 72,000 Contribution margin \ 48,000 Fixed expenses \ 36,000 Operating income \ 12,000 - If sales increase by $60,000,what will happen to profit?

(Multiple Choice)

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Question 70

What is represented in a cost-volume-profit graph?

(Multiple Choice)

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Question 71

The Valdez Mug Company manufactures plastic mugs that sell to wholesalers for $4.00 each.Variable and fixed costs are as follows: Valdez Mug produced and sold 10,000 cups during the current year.There were no beginning or ending inventories. a.Determine Valdez Mug's monthly break-even point in units. b.If monthly sales increase by 500 cups,what will be the change in monthly profits? c.If Valdez Mug is now subject to an income tax of 40 percent,what dollar sales volume is required to earn a monthly after-tax net income of $12,000?

(Essay)

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Question 72

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 was Angel's 2011 break-even sales volume?

(Multiple Choice)

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Question 73

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 total contribution margin for Kringel?

(Multiple Choice)

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Question 74

Lewis Production Company had the following projected information: Selling price per unit \ 150 Variable cost per unit \ 90 Total fixed costs \3 00,000 What is the contribution margin ratio?

(Multiple Choice)

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Question 75

What does a very high degree of operating leverage indicate?

(Multiple Choice)

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Question 76

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.How many units must be sold in order to obtain a before-tax profit of $12,000?

(Multiple Choice)

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Question 77

The following diagram is a cost-volume-profit graph for a manufacturing company: -Refer to the figure.Which of the following statements best describes the labelled item on the diagram?

(Multiple Choice)

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Question 78

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 ratio?

(Multiple Choice)

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Question 79

Which of the following assumption pertains to cost-volume-profit analysis?

(Multiple Choice)

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Question 80

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 contribution margin ratio for Kringel?

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units ) \ 120,000 Variable expenses 72,000 Contribution margin \ 48,000 Fixed expenses \ 36,000 Operating income \ 12,000 - If sales increase by 1,000 units,what will happen to profit?

Which item is considered in cost-volume-profit analysis?

Assuming all other things are equal,what must have happened to the fixed costs if there was a decrease in the break-even point?

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

The income statement for Thomas Manufacturing Company is as follows: Sales (10,000 units ) \ 120,000 Variable expenses 72,000 Contribution margin \ 48,000 Fixed expenses \ 36,000 Operating income \ 12,000 - If sales increase by $60,000,what will happen to profit?

What is represented in a cost-volume-profit graph?

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 was Angel's 2011 break-even sales volume?

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 total contribution margin for Kringel?

Lewis Production Company had the following projected information: Selling price per unit \ 150 Variable cost per unit \ 90 Total fixed costs \3 00,000 What is the contribution margin ratio?

What does a very high degree of operating leverage indicate?

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.How many units must be sold in order to obtain a before-tax profit of $12,000?

The following diagram is a cost-volume-profit graph for a manufacturing company: -Refer to the figure.Which of the following statements best describes the labelled item on the diagram?

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 ratio?

Which of the following assumption pertains to cost-volume-profit analysis?

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

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