Question 1

Company XX has the following information available:   If variable costs increase to $65 per unit,what is the break-even point in units?

Accepted Answer

A) 12,000 
B) 13,000 
C) 20,000 
D) none of the above 
A) 12,000 
B) 13,000 
C) 20,000 
D) none of the above

Question 2

An increase in the sales price per unit will cause a decrease in the break-even point.

Accepted Answer

A) True 
 B)False

Question 3

The level of sales at which revenues equal expenses and net income is zero is called the ________.

Accepted Answer

A) margin of safety 
B) contribution margin 
C) break-even point 
D) point of no return 
A) margin of safety 
B) contribution margin 
C) break-even point 
D) point of no return

Question 4

Fixed costs ________.

Accepted Answer

A) are fixed on a per-unit basis,but vary in total 
B) vary on a per-unit basis,but are fixed in total 
C) are fixed on a per-unit basis,and fixed in total 
D) vary on a per-unit basis,and vary in total 
A) are fixed on a per-unit basis,but vary in total 
B) vary on a per-unit basis,but are fixed in total 
C) are fixed on a per-unit basis,and fixed in total 
D) vary on a per-unit basis,and vary in total

Question 5

The sales mix is the relative proportions or combinations of quantities of different products that constitute total sales.

Accepted Answer

A) True 
 B)False

Question 6

The Eastman Family Restaurant is open 24 hours per day.Fixed costs are $24,000 per month.Variable costs are estimated at $9.60 per meal.The average revenue is $12 per meal.
Required:
A)Compute the break-even point in meals.
B)Compute the break-even volume in dollars.

Accepted Answer

A)$24,000/($12.00 -

Question 7

Manufacturers of industrial equipment have high contribution-margin percentages.

Accepted Answer

A) True 
 B)False

Question 8

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the salary of the supervisor in charge of this activity?

Accepted Answer

A) number of mechanic hours 
B) number of engineering hours 
C) number of workers supervised 
D) weight of the seats installed 
A) number of mechanic hours 
B) number of engineering hours 
C) number of workers supervised 
D) weight of the seats installed

Question 9

Young Corporation has determined the contribution margin ratio is 35% and the income tax rate is 40%.
Required:
A)Assume break-even volume in dollars is $1,500,000.What are total fixed costs?
B)Assume Young Corporation wants after-tax net income of $300,000.What volume of sales in dollars is necessary to achieve this net income?

Accepted Answer

A)$1,500,000 x 0.35

Question 10

Assume the sales price is $34 per unit and the variable cost is $19 per unit.The break-even point is 12,000 units.What are total fixed costs?

Accepted Answer

A) $180,000 
B) $190,000 
C) $340,000 
D) $530,000 
A) $180,000 
B) $190,000 
C) $340,000 
D) $530,000

Question 11

Total fixed costs increase when volume increases in the relevant range.

Accepted Answer

A) True 
 B)False

Question 12

Assume ZZZ Company has the following information available:   If fixed costs increase $200,000,what is the expected operating income?

Accepted Answer

A) $280,000 
B) $480,000 
C) $680,000 
D) $1,380,000 
A) $280,000 
B) $480,000 
C) $680,000 
D) $1,380,000

Question 13

The CVP graph uses the assumption that expenses are linear over the relevant range.

Accepted Answer

A) True 
 B)False

Question 14

Cost of goods sold is the cost of the merchandise that a company acquires or produces and then sells.

Accepted Answer

A) True 
 B)False

Question 15

MYC Company has the following information available:   If MYC Company wants a targeted after-tax net income of $14,000,how many units must be sold?

Accepted Answer

A) 45,000 
B) 52,000 
C) 55,000 
D) 60,000 
A) 45,000 
B) 52,000 
C) 55,000 
D) 60,000

Question 16

If the total amount of fixed costs increases,what is the effect on the break-even point? (Assume no other changes.)

Accepted Answer

A) The break-even point increases. 
B) The break-even point decreases. 
C) The break-even point remains the same. 
D) The break-even point will be zero. 
A) The break-even point increases. 
B) The break-even point decreases. 
C) The break-even point remains the same. 
D) The break-even point will be zero.

Question 17

Operating leverage is the ratio of fixed costs to variable costs.

Accepted Answer

A) True 
 B)False

Question 18

Berea Company expects to sell 19,000 units.Total fixed costs are $84,000 and the contribution margin per unit is $6.00.Berea's tax rate is 40%.What is the margin of safety in units?

Accepted Answer

A) 3,000 units 
B) 5,000 units 
C) 7,500 units 
D) 14,000 units 
A) 3,000 units 
B) 5,000 units 
C) 7,500 units 
D) 14,000 units

Question 19

HugME Company produces dolls.Each doll sells for $20.00.Variable costs are $14.00 per unit.If the break-even volume in dollars is $1,446,000,then the total fixed costs for the period are ________.

Accepted Answer

A) $361,500 
B) $433,800 
C) $516,425 
D) $1,446,000 
A) $361,500 
B) $433,800 
C) $516,425 
D) $1,446,000

Question 20

Only one cost driver may affect a cost at any given time.

Accepted Answer

A) True 
 B)False

Company XX has the following information available: If variable costs increase to $65 per unit,what is the break-even point in units?

An increase in the sales price per unit will cause a decrease in the break-even point.

The level of sales at which revenues equal expenses and net income is zero is called the ________.

Fixed costs ________.

The sales mix is the relative proportions or combinations of quantities of different products that constitute total sales.

The Eastman Family Restaurant is open 24 hours per day.Fixed costs are $24,000 per month.Variable costs are estimated at $9.60 per meal.The average revenue is $12 per meal. Required: A)Compute the break-even point in meals. B)Compute the break-even volume in dollars.

Manufacturers of industrial equipment have high contribution-margin percentages.

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the salary of the supervisor in charge of this activity?

Assume the sales price is $34 per unit and the variable cost is $19 per unit.The break-even point is 12,000 units.What are total fixed costs?

Total fixed costs increase when volume increases in the relevant range.

Assume ZZZ Company has the following information available: If fixed costs increase $200,000,what is the expected operating income?

The CVP graph uses the assumption that expenses are linear over the relevant range.

Cost of goods sold is the cost of the merchandise that a company acquires or produces and then sells.

MYC Company has the following information available: If MYC Company wants a targeted after-tax net income of $14,000,how many units must be sold?

If the total amount of fixed costs increases,what is the effect on the break-even point? (Assume no other changes.)

Operating leverage is the ratio of fixed costs to variable costs.

Berea Company expects to sell 19,000 units.Total fixed costs are $84,000 and the contribution margin per unit is $6.00.Berea's tax rate is 40%.What is the margin of safety in units?

HugME Company produces dolls.Each doll sells for $20.00.Variable costs are $14.00 per unit.If the break-even volume in dollars is $1,446,000,then the total fixed costs for the period are ________.

Only one cost driver may affect a cost at any given time.

Managerial Accounting, the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 2: Introduction to Cost Behavior and Cost-Volume Relationships

Company XX has the following information available: If variable costs increase to $65 per unit,what is the break-even point in units?

An increase in the sales price per unit will cause a decrease in the break-even point.

The level of sales at which revenues equal expenses and net income is zero is called the ________.

Fixed costs ________.

The sales mix is the relative proportions or combinations of quantities of different products that constitute total sales.

The Eastman Family Restaurant is open 24 hours per day.Fixed costs are $24,000 per month.Variable costs are estimated at $9.60 per meal.The average revenue is $12 per meal. Required: A)Compute the break-even point in meals. B)Compute the break-even volume in dollars.

Manufacturers of industrial equipment have high contribution-margin percentages.

Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane.What is an appropriate cost driver for the salary of the supervisor in charge of this activity?

Assume the sales price is $34 per unit and the variable cost is $19 per unit.The break-even point is 12,000 units.What are total fixed costs?

Total fixed costs increase when volume increases in the relevant range.

Assume ZZZ Company has the following information available: If fixed costs increase $200,000,what is the expected operating income?

The CVP graph uses the assumption that expenses are linear over the relevant range.

Cost of goods sold is the cost of the merchandise that a company acquires or produces and then sells.

MYC Company has the following information available: If MYC Company wants a targeted after-tax net income of $14,000,how many units must be sold?

If the total amount of fixed costs increases,what is the effect on the break-even point? (Assume no other changes.)

Operating leverage is the ratio of fixed costs to variable costs.

Berea Company expects to sell 19,000 units.Total fixed costs are $84,000 and the contribution margin per unit is $6.00.Berea's tax rate is 40%.What is the margin of safety in units?

HugME Company produces dolls.Each doll sells for $20.00.Variable costs are $14.00 per unit.If the break-even volume in dollars is $1,446,000,then the total fixed costs for the period are ________.

Only one cost driver may affect a cost at any given time.

Managerial Accounting, the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

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