Exam 7: Cost-Volume-Profit Analysis

Sally's Fries sells four large fries for every three small ones. A small fry sells for $2 with a variable cost of $0.75. A large fry sells for $6 with a variable cost of $1.50 What is the weighted average contribution margin?

If the selling price per unit is $25.00, the variable expense per unit is $5.00, and the breakeven sales in dollars is $467,000, what are total fixed expenses? (Round unit amounts up to the nearest unit and round your final answer to the nearest dollar.)

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $42 per unit with variable costs of $15 per unit. Plaid models sell for $48 per unit with variable costs of $35 per unit. Total fixed costs for the company are $19,200. Mayfield Company typically sells three Blue models for every three Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.)

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

The contribution margin per unit is how much profit each unit contributes after fixed costs are considered.

If the selling price per unit is $41, the unit contribution margin is $16, and total fixed expenses are $592,000, what will the breakeven sales in units be?

If total fixed expenses are $65,000, the target operating income is $15,000 and the contribution margin is $25 per unit, the sales needed to achieve the target operating income will be 3,200 units.

A product's contribution margin per unit is the excess of the selling price per unit over the variable cost of obtaining and selling each unit.

The breakeven point on a CVP graph is the point where the sales revenue line intersects the total expense line.

Palmer's Gourmet Chocolates produces and sells assorted boxed chocolates. The unit selling price is $40, unit variable costs are $30, and total fixed costs are $700. How many boxes of chocolates must Palmer's Gourmet Chocolates sell to breakeven?

Moe's Pizza Shop sells a large pizza for $12.00. Unit variable expenses total $8.00. The breakeven sales in units is 7000 and budgeted sales in units is 8000. What is the margin of safety in dollars?

Assume the following amounts: If sales revenue per unit increases to $21 and 16,000 units are sold, what is the operating income?

Total contribution margin less total fixed expenses equals

Stallard Corporation gathered the following information for the year just ended: During the year, Stallard produced and sold 50,000 units of product at a selling price of $5.64 per unit. There was no beginning inventory of product at the start of the year. What is the operating income (loss)for the year?

The margin of safety is the "cushion," or drop in sales, a company can absorb without incurring a loss.

Yellow Company's variable expenses are 20% of sales and have monthly fixed expenses of $24,000. The monthly target operating income is $800. What is the monthly margin of safety as a percentage of target sales in dollars?

Bottles R Us Bottling Company provides the following information about its single product. What is the contribution margin per unit?

Fast as Lightning is an oil change service drive-through that charges each customer $24.00 for an oil and filter change service. Fast as Lightning has found that it costs its business $16.00 per oil and filter change. Monthly fixed costs are $44,000; current sales are 8,000 services. a. Compute the breakeven sales in units. b. Compute Fast as Lightning's margin of safety in units and sales dollars. c. Compute Fast as Lightning's margin of safety as a percentage. d. Compute Fast as Lightning's operating leverage factor. e. Compute Fast as Lightning's % of operating income decline if sales fall by 18%.

Smarty Pants Company sells two products, green camouflage pants and orange camouflage pants. Smarty Pants predicts that it will sell 1300 pairs of green pants and 1200 pairs of orange pants in the next period. The unit contribution margins for green pants and orange pants are $7.75 and $9.00, respectively. What is the weighted average unit contribution margin?

Curvy Confections is considering building a new plant in Europe. It predicts sales at the new plant to be 38,000 units at $10.00/unit. Below is a listing of estimated expenses. A European firm was contracted to sell the product and will receive a commission of 15% of the sales price. No U.S. home office expenses will be allocated to the new facility. The contribution margin ratio for Curvy Confections is