Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows: \[\begin{array} { | l | r | } \hline \text { Pice per unit } & \$ 25.00 \\ \hline \text { Variable cost per unit } & \$ 20.00 \\ \hline \text { Fixed cost per month } & \$ 8,000 \\ \hline \text { Current sales volume (units) } & 3,000 \\ \hline \end{array}\] - How much is Bell's current monthly operating income?

A) $1,000 B) $5,000 C) $6,750 D) $7,000 A) $1,000 B) $5,000 C) $6,750 D) $7,000

A small business produces a single product and reports the following data: \[\begin{array} { | l | r | r | } \hline \text { Price } & \$ 8.00 & \text { per unit } \\ \hline \text { Variable cost } & \$ 5.00 & \text { per unit } \\ \hline \text { Fixed cost } & \$ 21,000 & \text { per month } \\ \hline \text { Volume } & 10,000 & \text { per month } \\ \hline \end{array}\] - The company's variable cost goes up by $0.75 per unit, so they raise the price by the same amount. Assume other factors remain the same. How would this change affect operating income?

A) It will go up by $7,500. B) It will go up by $8,000. C) It will go down by $2,500. D) It will stay the same. A) It will go up by $7,500. B) It will go up by $8,000. C) It will go down by $2,500. D) It will stay the same.

Runnymeade Products makes a racing bicycle tire. Cost and volume data are below. \[\begin{array} { | l | r | } \hline \text { Pice per unit } & \$ 18.00 \\ \hline \text { Variable cost per urit } & \$ 14.50 \\ \hline \text { Fixed cost per manth } & \$ 28,000 \\ \hline \text { Current sales valume (urits) } & 10,000 \\ \hline \end{array}\] - How much is current monthly operating income?

A) $7,000 B) $6,850 C) $5,900 D) $7,250 A) $7,000 B) $6,850 C) $5,900 D) $7,250

Arquebus Company is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen and collectors. He is currently producing 40 flintlock muskets per month. Cost data are as follows: \[\begin{array} { l l } \text { Price } & \$ 720 \text { per unit } \\ \text { Variable cost } & \$ 470 \text { per unit } \\ \text { Fixed costs } & \$ 8,000 \text { per month } \end{array}\] - How much is his margin of safety expressed in units per month?

A) 8 units B) 6 units C) 4 units D) 2 units A) 8 units B) 6 units C) 4 units D) 2 units

Fairfield Company management has budgeted the following amounts for its next fiscal year: \[\begin{array} { | l | r | } \hline \text { Total fixed expenses } & \$ 832,500 \\ \hline \text { Sale price per unit } & \$ 40 \\ \hline \text { Varinble experses per urit } & \$ 25 \\ \hline \end{array}\] - What will happen to the breakeven point in units if Fairfield can reduce fixed expenses by $22,500?

A) The breakeven point will decrease by 1,500 units. B) The breakeven point will decrease by 562 units. C) The breakeven point will decrease by 900 units. D) The breakeven point will increase by 562 units. A) The breakeven point will decrease by 1,500 units. B) The breakeven point will decrease by 562 units. C) The breakeven point will decrease by 900 units. D) The breakeven point will increase by 562 units.

Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows: \[\begin{array} { | l | r | } \hline \text { Pice per unit } & \$ 25.00 \\ \hline \text { Variable cost per unit } & \$ 20.00 \\ \hline \text { Fixed cost per month } & \$ 8,000 \\ \hline \text { Current sales volume (units) } & 3,000 \\ \hline \end{array}\] - If Bell wishes to earn $10,000 of operating income, what volume of sales is needed?

A) 3,150 B) 3,200 C) 3,500 D) 3,600 A) 3,150 B) 3,200 C) 3,500 D) 3,600

Argyle sells steel beams to building contractors in two sizes-regular and heavy. Argyle sells 4 regular beams for every one heavy beam. Cost data are as follows: \[\begin{array} { | l | r | r | } \hline & { \text { Regular } } & { \text { Heavy } } \\ \hline \text { Price per unit } & \$ 20.00 & \$ 28.00 \\ \hline \text { Variable cost per unit } & \$ 16.00 & \$ 20.00 \\ \hline \end{array}\] - Argyle's fixed costs are $2,880 per month. How much is the breakeven point in total number of units?

A) 590 B) 578 C) 620 D) 600 A) 590 B) 578 C) 620 D) 600

The phone bill for a CPA firm is a mixed cost. Please refer to the 4-month data below, apply the high-low method, and answer the question. \[\begin{array} { | l | r | r | } \hline & { \text { Minutes } } & \text { Total Bill } \\ \hline \text { Jan } & 300 & \$ 2,650 \\ \hline \text { Feb } & 150 & \$ 2,575 \\ \hline \text { Mar } & 100 & \$ 2,550 \\ \hline \text { Apr } & 250 & \$ 2,625 \\ \hline \end{array}\] - How much is the variable cost per minute?

A) $0.50 B) $1.75 C) $2.50 D) $0.25 A) $0.50 B) $1.75 C) $2.50 D) $0.25

Exam 19: Cost-Volume-Profit Analysis

Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows: Pice per unit \ 25.00 Variable cost per unit \ 20.00 Fixed cost per month \ 8,000 Current sales volume (units) 3,000 - How much is Bell's current monthly operating income?

(Multiple Choice)

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Question 61

On a CVP graph, the intersection of the sales line and the total cost line is known as the:

(Multiple Choice)

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Question 62

Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2,000, how many units need to be sold?

(Multiple Choice)

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Question 63

A small business produces a single product and reports the following data: Price \ 8.00 per unit Variable cost \ 5.00 per unit Fixed cost \ 21,000 per month Volume 10,000 per month - The company's variable cost goes up by $0.75 per unit, so they raise the price by the same amount. Assume other factors remain the same. How would this change affect operating income?

(Multiple Choice)

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Question 64

Reevis Company has fixed costs of $7,500. Their contribution margin ratio is 20%. What is the break-even point in sales dollars?

(Multiple Choice)

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Question 65

On a CVP graph, there is a point where the two diagonal lines intersect. Which of the following statements accurately describes that point?

(Multiple Choice)

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Question 66

Peterson Company has both fixed and variable costs. If the volume doubles, the total of all costs combined will double.

(True/False)

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Question 67

Taizhong Semiconductor Company mass produces several common computer chips. Type A sells for $1.20 per unit. Variable cost is $0.95 per unit and the fixed costs are $32,000 per month. Taizhong currently sells 140,000 units per month. How much is the margin of safety expressed in sales revenues?

(Multiple Choice)

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Question 68

Runnymeade Products makes a racing bicycle tire. Cost and volume data are below. Pice per unit \ 18.00 Variable cost per urit \ 14.50 Fixed cost per manth \ 28,000 Current sales valume (urits) 10,000 - How much is current monthly operating income?

(Multiple Choice)

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(76)

Question 69

Axelrod Company has fixed costs of $250,000. Highest production volume this year was in January when there were 100,000 units produced and total costs of $550,000. How much is the variable cost per unit? (Please round all amounts to the nearest cent.)

(Multiple Choice)

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Question 70

Arquebus Company is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen and collectors. He is currently producing 40 flintlock muskets per month. Cost data are as follows: Price \ 720 per unit Variable cost \ 470 per unit Fixed costs \ 8,000 per month - How much is his margin of safety expressed in units per month?

(Multiple Choice)

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Question 71

Which of the following is NOT a fixed cost?

(Multiple Choice)

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Question 72

On a CVP graph, in the area where the revenue line appears above the total cost line, the vertical distance separating the two lines represents what?

(Multiple Choice)

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Question 73

If all other factors are constant, an increase in fixed costs will increase the breakeven point.

(True/False)

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Question 74

Fairfield Company management has budgeted the following amounts for its next fiscal year: Total fixed expenses \ 832,500 Sale price per unit \ 40 Varinble experses per urit \ 25 - What will happen to the breakeven point in units if Fairfield can reduce fixed expenses by $22,500?

(Multiple Choice)

4.9/5

(78)

Question 75

Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows: Pice per unit \ 25.00 Variable cost per unit \ 20.00 Fixed cost per month \ 8,000 Current sales volume (units) 3,000 - If Bell wishes to earn $10,000 of operating income, what volume of sales is needed?

(Multiple Choice)

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(83)

Question 76

Total fixed costs can change from one relevant range to another.

(True/False)

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Question 77

If fixed costs go up and all other factors remain the same, the margin of safety will become smaller.

(True/False)

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Question 78

Argyle sells steel beams to building contractors in two sizes-regular and heavy. Argyle sells 4 regular beams for every one heavy beam. Cost data are as follows: Regular Heavy Price per unit \ 20.00 \ 28.00 Variable cost per unit \ 16.00 \ 20.00 - Argyle's fixed costs are $2,880 per month. How much is the breakeven point in total number of units?

(Multiple Choice)

4.9/5

(80)

Question 79

The phone bill for a CPA firm is a mixed cost. Please refer to the 4-month data below, apply the high-low method, and answer the question. Minutes Total Bill Jan 300 \ 2,650 Feb 150 \ 2,575 Mar 100 \ 2,550 Apr 250 \ 2,625 - How much is the variable cost per minute?

(Multiple Choice)

4.8/5

(83)

Question 80

Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows: Pice per unit \ 25.00 Variable cost per unit \ 20.00 Fixed cost per month \ 8,000 Current sales volume (units) 3,000 - How much is Bell's current monthly operating income?

On a CVP graph, the intersection of the sales line and the total cost line is known as the:

Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2,000, how many units need to be sold?

Reevis Company has fixed costs of $7,500. Their contribution margin ratio is 20%. What is the break-even point in sales dollars?

On a CVP graph, there is a point where the two diagonal lines intersect. Which of the following statements accurately describes that point?

Peterson Company has both fixed and variable costs. If the volume doubles, the total of all costs combined will double.

Taizhong Semiconductor Company mass produces several common computer chips. Type A sells for $1.20 per unit. Variable cost is $0.95 per unit and the fixed costs are $32,000 per month. Taizhong currently sells 140,000 units per month. How much is the margin of safety expressed in sales revenues?

Runnymeade Products makes a racing bicycle tire. Cost and volume data are below. Pice per unit \ 18.00 Variable cost per urit \ 14.50 Fixed cost per manth \ 28,000 Current sales valume (urits) 10,000 - How much is current monthly operating income?

Axelrod Company has fixed costs of $250,000. Highest production volume this year was in January when there were 100,000 units produced and total costs of $550,000. How much is the variable cost per unit? (Please round all amounts to the nearest cent.)

Which of the following is NOT a fixed cost?

On a CVP graph, in the area where the revenue line appears above the total cost line, the vertical distance separating the two lines represents what?

If all other factors are constant, an increase in fixed costs will increase the breakeven point.

Fairfield Company management has budgeted the following amounts for its next fiscal year: Total fixed expenses \ 832,500 Sale price per unit \ 40 Varinble experses per urit \ 25 - What will happen to the breakeven point in units if Fairfield can reduce fixed expenses by $22,500?

Total fixed costs can change from one relevant range to another.

If fixed costs go up and all other factors remain the same, the margin of safety will become smaller.

The phone bill for a CPA firm is a mixed cost. Please refer to the 4-month data below, apply the high-low method, and answer the question. Minutes Total Bill Jan 300 \ 2,650 Feb 150 \ 2,575 Mar 100 \ 2,550 Apr 250 \ 2,625 - How much is the variable cost per minute?

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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