Question 1

Antonio's Flowers sells bouquets for $65 each.The variable costs for each kit are $45.The total contribution margin for 30 kits is

Accepted Answer

A) $1,950. 
B) $3,300. 
C) $600. 
D) $1,350. 
A) $1,950. 
B) $3,300. 
C) $600. 
D) $1,350. C

Question 2

Bernard Corporation gathered the following information for the year just ended:
 
During the year,Bernard produced and sold 50,000 units of product at a selling price of $9.00 per unit.There was no beginning inventory of product at the start of the year.
What is the operating income (loss)for the year?

Accepted Answer

A) $266,000 
B) $450,000 
C) $126,000 
D) $310,000 
A) $266,000 
B) $450,000 
C) $126,000 
D) $310,000 C

Question 3

To calculate the weighted average contribution margin,divide the sum of the individual product contribution margins by the sales mix in units.

Accepted Answer

A) True 
 B)False  True

Question 4

Heavenly Cupcakes has a monthly target operating income of $12,000.Variable expenses are 40% of sales and monthly fixed expenses are $8,000.
Requirements:
a.What is the monthly margin of safety in dollars if the business achieves its operating income goal?
b.What is the monthly margin of safety as a percentage of target sales in dollars?
c.What is Heavenly Cupcakes' operating leverage factor at the target level of operating income?

Accepted Answer

The answer of Heavenly Cupcakes has a monthly target operating...

Question 5

I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road,Peanut Butter,and Fruity Tooty.It sold 15,000 gallons last year.For every five gallons of ice cream sold,one pound is Fruity Tooty and the remainder is split evenly between Peanut Butter and Rocky Road.Fixed costs for I Scream For Ice Cream are $27,000 and additional information follows:
 
The sales mix percentage of Fruity Tooty based upon pounds is

Accepted Answer

A) 71%. 
B) 40%. 
C) 75%. 
D) 20%. 
A) 71%. 
B) 40%. 
C) 75%. 
D) 20%.

Question 6

Assume the following amounts:
 
If sales revenue per unit increases to $22 and 12,000 units are sold,what is the operating income?

Accepted Answer

A) $264,000 
B) $60,000 
C) $108,000 
D) $84,000 
A) $264,000 
B) $60,000 
C) $108,000 
D) $84,000

Question 7

DJ's T-Shirt Factory Contribution Margin
 
The managerial accountant at DJ's T-Shirt Factory reported the price per shirt is $24.The only variable cost is $15 per shirt.The managerial accountant also reported that the sales goals were increased to 1,000 shirts during the next quarter.First,compute the unit contribution margin per shirt.If fixed expenses are $8,000,what is the forecasted operating income if 1,000 shirts are sold in the next quarter?

Accepted Answer

A) 6;$700 
B) 7;$800 
C) 8;$900 
D) 9;$1,000 
A) 6;$700 
B) 7;$800 
C) 8;$900 
D) 9;$1,000

Question 8

If the selling price per unit is $40.00,the variable expense per unit is $30,and total fixed expenses are $200,000,what are the breakeven sales in dollars?

Accepted Answer

A) $5,000 
B) $50,000 
C) $800,000 
D) $114,286 
A) $5,000 
B) $50,000 
C) $800,000 
D) $114,286

Question 9

Which of the following statements is true if the sales price per unit decreases while the variable cost per unit and total fixed costs remain constant?

Accepted Answer

A) The contribution margin increases and the breakeven point decreases. 
B) The contribution margin decreases and the breakeven point decreases. 
C) The contribution margin increases and the breakeven point increases. 
D) The contribution margin decreases and the breakeven point increases. 
A) The contribution margin increases and the breakeven point decreases. 
B) The contribution margin decreases and the breakeven point decreases. 
C) The contribution margin increases and the breakeven point increases. 
D) The contribution margin decreases and the breakeven point increases.

Question 10

If a unit sells for $12.50 and has a variable cost of $3.25,its contribution margin per unit is $9.25.

Accepted Answer

A) True 
 B)False

Question 11

Fiesta Supply Company compiled the following data in order to assess the weighted average contribution margin per unit of two of the company's best-selling party items;the dome tent and the portable gazebo.
1.What is the contribution margin of the dome tent?
2.What is the weighted-average contribution margin per unit?

Accepted Answer

A) $880;$221.67 
B) $530;$1,330 
C) $775;$220 
D) $389;$6 
A) $880;$221.67 
B) $530;$1,330 
C) $775;$220 
D) $389;$6

Question 12

The breakeven point represents the minimum number of units a company must sell before it earns a profit.

Accepted Answer

A) True 
 B)False

Question 13

Monroe Manufacturing produces and sells a product with a price of $100/unit.The following data has been prepared for its estimated upper and lower levels of activity.
 
The only variable expenses for this company are

Accepted Answer

A) indirect materials,direct materials,and direct labor. 
B) all categories of selling and administrative expenses. 
C) indirect materials,indirect labor,direct materials,and direct labor. 
D) none of the above. 
A) indirect materials,direct materials,and direct labor. 
B) all categories of selling and administrative expenses. 
C) indirect materials,indirect labor,direct materials,and direct labor. 
D) none of the above.

Question 14

Assuming no other changes in the cost-volume-profit relationship,which of the following will decrease the breakeven point in units?

Accepted Answer

A) A decrease in the selling price per unit 
B) An increase in the selling price per unit 
C) An increase in total fixed costs 
D) An increase in the variable costs per unit 
A) A decrease in the selling price per unit 
B) An increase in the selling price per unit 
C) An increase in total fixed costs 
D) An increase in the variable costs per unit

Question 15

I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road,Peanut Butter,and Fruity Tooty.It sold 15,000 gallons last year.For every five gallons of ice cream sold,one gallon is Fruity Tooty and the remainder is split evenly between Peanut Butter and Rocky Road.Fixed costs for I Scream For Ice Cream are $27,000 and additional information follows:
 
The breakeven sales volume in gallons for I Scream For Ice Cream is

Accepted Answer

A) 5,400. 
B) 7,500. 
C) 3,857. 
D) 13,500. 
A) 5,400. 
B) 7,500. 
C) 3,857. 
D) 13,500.

Question 16

The breakeven point can either be calculated in terms of number of units or in terms of sales revenue.

Accepted Answer

A) True 
 B)False

Question 17

Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000.The monthly target operating income is $60,000.What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

Accepted Answer

A) $100,000 
B) $900,000 
C) $500,000 
D) $(300,000) 
A) $100,000 
B) $900,000 
C) $500,000 
D) $(300,000)

Question 18

All of the following would be considered a company with high operating leverage,except

Accepted Answer

A) retailer. 
B) golf course. 
C) theme park. 
D) hotel. 
A) retailer. 
B) golf course. 
C) theme park. 
D) hotel.

Question 19

The line that begins at the origin on a CVP graph represents

Accepted Answer

A) total fixed expenses. 
B) total sales revenues. 
C) total expenses. 
D) both the total expenses and the total sales revenues. 
A) total fixed expenses. 
B) total sales revenues. 
C) total expenses. 
D) both the total expenses and the total sales revenues.

Question 20

Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000.The monthly target operating income is $3,750.What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

Accepted Answer

A) $(18,750) 
B) $56,250 
C) $6,250 
D) $31,250 
A) $(18,750) 
B) $56,250 
C) $6,250 
D) $31,250

Antonio's Flowers sells bouquets for $65 each.The variable costs for each kit are $45.The total contribution margin for 30 kits is

To calculate the weighted average contribution margin,divide the sum of the individual product contribution margins by the sales mix in units.

Assume the following amounts: If sales revenue per unit increases to $22 and 12,000 units are sold,what is the operating income?

If the selling price per unit is $40.00,the variable expense per unit is $30,and total fixed expenses are $200,000,what are the breakeven sales in dollars?

Which of the following statements is true if the sales price per unit decreases while the variable cost per unit and total fixed costs remain constant?

If a unit sells for $12.50 and has a variable cost of $3.25,its contribution margin per unit is $9.25.

The breakeven point represents the minimum number of units a company must sell before it earns a profit.

Monroe Manufacturing produces and sells a product with a price of $100/unit.The following data has been prepared for its estimated upper and lower levels of activity. The only variable expenses for this company are

Assuming no other changes in the cost-volume-profit relationship,which of the following will decrease the breakeven point in units?

The breakeven point can either be calculated in terms of number of units or in terms of sales revenue.

Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000.The monthly target operating income is $60,000.What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

All of the following would be considered a company with high operating leverage,except

The line that begins at the origin on a CVP graph represents

Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000.The monthly target operating income is $3,750.What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

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Exam 7: Cost-Volume-Profit Analysis

Antonio's Flowers sells bouquets for $65 each.The variable costs for each kit are $45.The total contribution margin for 30 kits is

To calculate the weighted average contribution margin,divide the sum of the individual product contribution margins by the sales mix in units.

Assume the following amounts: If sales revenue per unit increases to $22 and 12,000 units are sold,what is the operating income?

If the selling price per unit is $40.00,the variable expense per unit is $30,and total fixed expenses are $200,000,what are the breakeven sales in dollars?

Which of the following statements is true if the sales price per unit decreases while the variable cost per unit and total fixed costs remain constant?

If a unit sells for $12.50 and has a variable cost of $3.25,its contribution margin per unit is $9.25.

The breakeven point represents the minimum number of units a company must sell before it earns a profit.

Monroe Manufacturing produces and sells a product with a price of $100/unit.The following data has been prepared for its estimated upper and lower levels of activity. The only variable expenses for this company are

Assuming no other changes in the cost-volume-profit relationship,which of the following will decrease the breakeven point in units?

The breakeven point can either be calculated in terms of number of units or in terms of sales revenue.

Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000.The monthly target operating income is $60,000.What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

All of the following would be considered a company with high operating leverage,except

The line that begins at the origin on a CVP graph represents

Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000.The monthly target operating income is $3,750.What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters