Question 1

The break-even point in units can be calculated using the contribution margin approach in which of the following formulas?

Accepted Answer

A) Total Costs/Unit Contribution Margin 
B) Total Costs/Fixed Costs 
C) Fixed Costs/Selling Price per unit 
D) Fixed Costs/Unit Contribution Margin 
A) Total Costs/Unit Contribution Margin 
B) Total Costs/Fixed Costs 
C) Fixed Costs/Selling Price per unit 
D) Fixed Costs/Unit Contribution Margin

Question 2

Assuming all other things are the same,what must have happened to the selling price per unit if there was a decrease in the break-even point?

Accepted Answer

A) It remained the same. 
B) It increased first,then decreased. 
C) It increased. 
D) It decreased. 
A) It remained the same. 
B) It increased first,then decreased. 
C) It increased. 
D) It decreased.

Question 3

Sarah Smith,a sole proprietor,has the following projected figures for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 150.00 \
\text { Contribution margin per unit } & \$ 45.00 \
\text { Total fixed costs } & \$ 630,000
\end{array}$ How many units must be sold to obtain a target before-tax profit of $270,000?

Accepted Answer

A) 6,000 units 
B) 8,572 units 
C) 14,000 units 
D) 20,000 units 
A) 6,000 units 
B) 8,572 units 
C) 14,000 units 
D) 20,000 units

Question 4

The following diagram is a cost-volume-profit graph for a manufacturing company:
  
-Refer to the figure.What is the difference between line AB and line AC (area BAC)?

Accepted Answer

A) the contribution ratio 
B) the total variable cost 
C) the contribution margin per unit 
D) the total fixed cost 
A) the contribution ratio 
B) the total variable cost 
C) the contribution margin per unit 
D) the total fixed cost

Question 5

The Smith Corporation has the following data for current year: $$\begin{array} { l l } 
\text { Selling price per unit } & \$ 15 \
\text { Variable cost per unit } & \$ 9 \
\text { Fixed costs } & \$ 45,000 \
\text { Units sold } & 10,000 \text { units }
\end{array}$$
- What will the margin of safety in units be (rounded to the nearest whole unit)?

Accepted Answer

A) 667 
B) 2,500 
C) 4,000 
D) 7,500 
A) 667 
B) 2,500 
C) 4,000 
D) 7,500

Question 6

Thomas Company had the following information: $\begin{array}{lcc}
 \underline{\text { Activity Driver}}&
 \underline{\text { Unit Variable Cost  }}&\underline{\text { Level of Activity Driver}}\
\text { Units sold } & \$ 20 & -- \
\text { Setups } & 1,000 & 80 \
\text { Engineering hours } & 60 &2,000 \
\text { Other data: } & &
\end{array}$

$\begin{array}{lc}
\text { Total fixed costs (traditional) } & \$ 800,000 \
\text { Total fixed costs (ABC) } & \$ 400,000 \
\text { Unit selling price } & \$ 40
\end{array}$ Suppose Thomas could reduce setup costs by $500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours.How many units must be sold to break even in this case?

Accepted Answer

A) 11,250 units 
B) 25,050 units 
C) 25,650 units 
D) 30,000 units 
A) 11,250 units 
B) 25,050 units 
C) 25,650 units 
D) 30,000 units

Question 7

Sarah Smith,a sole proprietor,has the following projected figures for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 150 .00\
\text { Contribution margin per unit  } & \$ 45.00 \
\text { Total fixed costs } & \$630,000
\end{array}$ 
 What is the break-even point in dollars?

Accepted Answer

A) $189,000 
B) $426,000 
C) $900,000 
D) $2,100,000 
A) $189,000 
B) $426,000 
C) $900,000 
D) $2,100,000

The break-even point in units can be calculated using the contribution margin approach in which of the following formulas?

Assuming all other things are the same,what must have happened to the selling price per unit if there was a decrease in the break-even point?

Sarah Smith,a sole proprietor,has the following projected figures for next year: Selling price per unit \ 150.00 Contribution margin per unit \ 45.00 Total fixed costs \ 630,000 How many units must be sold to obtain a target before-tax profit of $270,000?

The following diagram is a cost-volume-profit graph for a manufacturing company: -Refer to the figure.What is the difference between line AB and line AC (area BAC)?

The Smith Corporation has the following data for current year: Selling price per unit \ 15 Variable cost per unit \ 9 Fixed costs \ 45,000 Units sold 10,000 units - What will the margin of safety in units be (rounded to the nearest whole unit)?

Sarah Smith,a sole proprietor,has the following projected figures for next year: Selling price per unit \ 150.00 Contribution margin per unit \ 45.00 Total fixed costs \6 30,000 What is the break-even point in dollars?

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

Exam 3: Cost-Volume-Profit Analysis

The break-even point in units can be calculated using the contribution margin approach in which of the following formulas?

Assuming all other things are the same,what must have happened to the selling price per unit if there was a decrease in the break-even point?

Sarah Smith,a sole proprietor,has the following projected figures for next year: Selling price per unit \ 150.00 Contribution margin per unit \ 45.00 Total fixed costs \ 630,000 How many units must be sold to obtain a target before-tax profit of $270,000?

The following diagram is a cost-volume-profit graph for a manufacturing company: -Refer to the figure.What is the difference between line AB and line AC (area BAC)?

The Smith Corporation has the following data for current year: Selling price per unit \ 15 Variable cost per unit \ 9 Fixed costs \ 45,000 Units sold 10,000 units - What will the margin of safety in units be (rounded to the nearest whole unit)?

Sarah Smith,a sole proprietor,has the following projected figures for next year: Selling price per unit \ 150.00 Contribution margin per unit \ 45.00 Total fixed costs \6 30,000 What is the break-even point in dollars?

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