Exam 7: Cost-Volume-Profit Analysis

Moe's Pizza Shop sells a large pizza for $11.50.Unit variable expenses total $5.50.The breakeven sales in units is 5,000 and budgeted sales in units is 9,500.What is the margin of safety in dollars?

Corny and Sweet grows and sells sweet corn at its roadside produce stand.The selling price per dozen is $3.75,variable costs are $1.25 per dozen,and total fixed costs are $750.00.How many dozens of ears of corn must Corny and Sweet sell to breakeven?

Slamburger's sells three cheeseburgers for every two regular hamburgers.A cheeseburger sells for $3.50 with a variable cost of $1.00.A regular hamburger sells for $3 with a variable cost of $0.75.What is the weighted average contribution margin?

The lowest possible operating leverage factor for a company is

Garfield Corporation is considering building a new plant in Canada.It predicts sales at the new plant to be 50,000 units at $5.00/unit.Below is a listing of estimated expenses: A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price.No U.S.home office expenses will be allocated to the new facility. The margin of safety percentage for Duncan Enterprises is

Claudia Enterprises has budgeted the following amounts for its next fiscal year: If Claudia Enterprises can reduce fixed expenses by $12,000,how will breakeven sales in units be affected?

J.I.T Auto sells its cars for $20,000 per unit (car).Variable costs are currently 60% of sales revenue.Fixed expenses are $480,000,000 per year. What is the breakeven point in units at the current selling price?

Which of the following represents the excess of the selling price per unit of a product over the variable cost of obtaining and selling each unit?

The selling price of a Road King bicycle is $700,unit variable costs are $350,and total fixed costs are $12,600.How many bicycles will Road King need to sell to breakeven?

Martin Enterprises has a predicted operating income of $140,000.Its total variable expenses are $50,000 and its total fixed expenses have doubled from $20,000 to $40,000.The unit contribution margin for the company's sole product is $10.The number of units that Martin Enterprises needs to sell to achieve the predicted operating income would be

Neeley Grocery has a monthly target operating income of $25,000.Variable expenses are 20% of sales and monthly fixed expenses are $15,000.What is the monthly margin of safety as a percentage of target sales in dollars?

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 Fancy Furniture's operating leverage factor at the target level of operating income?

Papa's Pastries sells regular donuts and large donuts.For every six regular donuts sold the manager at Papa's Pastries sell four large donuts. Calculate the weighted average contribution margin per unit.

CVP analysis assumes that the only factor that affects costs is a change in sale price.

Helga's Pretzels sells pretzels for $5.The variable costs for each pizza are $3,while the total fixed costs are $1,500.The contribution margin for 1,500 pretzels is

LaComedia Dinner Theater sells tickets for dinner and a show for $40 each.The cost of providing dinner is $26 per ticket and the fixed cost of operating the theater is $100,000 per month.The company can accommodate 12,000 patrons each month.What is the contribution margin per patron?

William's Steel had the following fixed costs: The company also had the following variable costs: During the year,the company produced and sold 55,000 units of the product at a selling price of $100.00 per unit.The company had no inventory at the beginning of the year. Required: Prepare a contribution margin income statement for the year.

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

If all other factors are constant,any decrease in fixed costs will decrease the breakeven point.

The managerial accountant at Right Stripes T-Shirt Company reported the following information: How many units did Right Stripes T-Shirt Company sell to achieve the above listed revenue? Compute the company's contribution margin.