Question 1

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 2

Light Me Up Lamps 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 as a percentage of target sales in dollars?

Accepted Answer

A) 1)80% 
B) 25.00% 
C) 20.00% 
D) 60.00% 
A) 1)80% 
B) 25.00% 
C) 20.00% 
D) 60.00%

Question 3

J&A Corporation has a monthly target operating income of $57,600. Variable expenses are 10% of sales and monthly fixed expenses are $14,400. What is J&A's operating leverage factor at the target level of operating income?

Accepted Answer

A) 0)20 
B) 1)25 
C) 0)60 
D) 5)00 
A) 0)20 
B) 1)25 
C) 0)60 
D) 5)00

Question 4

When using the income statement approach to finding breakeven, which of the following is true?

Accepted Answer

A) (variable expenses × number of units)- fixed expenses = operating income 
B) sales revenue - variable expenses - fixed expenses = operating income 
C) fixed expenses + variable expenses + sales revenue = operating income 
D) fixed expenses + variable expenses - sales revenue = operating income 
A) (variable expenses × number of units)- fixed expenses = operating income 
B) sales revenue - variable expenses - fixed expenses = operating income 
C) fixed expenses + variable expenses + sales revenue = operating income 
D) fixed expenses + variable expenses - sales revenue = operating income

Question 5

The margin of safety can be expressed in units, in sales dollars, or as a percentage.

Accepted Answer

A) True 
 B)False

Question 6

To find the sales revenue needed to breakeven, the formula used could be

Accepted Answer

A) fixed expenses ÷ contribution margin ratio. 
B) contribution margin per unit ÷ fixed expenses. 
C) contribution margin ratio ÷ fixed expenses. 
D) fixed expenses ÷ contribution margin per unit. 
A) fixed expenses ÷ contribution margin ratio. 
B) contribution margin per unit ÷ fixed expenses. 
C) contribution margin ratio ÷ fixed expenses. 
D) fixed expenses ÷ contribution margin per unit.

Question 7

Dairy Days Ice Cream sells ice cream cones for $5 per customer. Variable costs are $2 per cone. Fixed costs are $2100 per month. What is Dairy Days' contribution margin ratio?

Accepted Answer

A) 262% 
B) 60% 
C) 350% 
D) 57% 
A) 262% 
B) 60% 
C) 350% 
D) 57%

Question 8

When a company sells more than one product, it does not have a unique breakeven point.

Accepted Answer

A) True 
 B)False

Question 9

Prince Paper has budgeted the following amounts for its next fiscal year:   If Price Paper spends an additional $12,300 on advertising, sales volume should increase by 1000 units. What effect will this have on operating income?

Accepted Answer

A) Increase of $17,700 
B) Increase of $30,000 
C) Decrease of $30,000 
D) Decrease of $17,700 
A) Increase of $17,700 
B) Increase of $30,000 
C) Decrease of $30,000 
D) Decrease of $17,700

Question 10

Bottles R Us Bottling Company provides the following information about its single product.   What is the breakeven point in units?

Accepted Answer

A) 243,126 
B) 11,693 
C) 56,300 
D) 50,495 
A) 243,126 
B) 11,693 
C) 56,300 
D) 50,495

Question 11

The selling price of a particular product is $37.00 per unit, fixed costs total $225,600, and the breakeven sales in dollars is $940,000, what will the variable expense per unit be?

Accepted Answer

A) $117.17 
B) $8.88 
C) $45.88 
D) $28.12 
A) $117.17 
B) $8.88 
C) $45.88 
D) $28.12

Question 12

Sweet Treats sells ice cream cones for $4.00 per customer. Variable costs are $1.25 per cone. Fixed costs are $2800 per month. What is the company's contribution margin per ice cream cone?

Accepted Answer

A) $1.25 
B) $2.75 
C) $1.50 
D) $4 
A) $1.25 
B) $2.75 
C) $1.50 
D) $4

Question 13

To find the number of units that need to be sold to breakeven, the formula used could be

Accepted Answer

A) fixed expenses ÷ contribution margin per unit. 
B) contribution margin per unit ÷ fixed expenses. 
C) fixed expenses ÷ contribution margin ratio. 
D) contribution margin ratio ÷ fixed expenses. 
A) fixed expenses ÷ contribution margin per unit. 
B) contribution margin per unit ÷ fixed expenses. 
C) fixed expenses ÷ contribution margin ratio. 
D) contribution margin ratio ÷ fixed expenses.

Question 14

Crazy Coasters Amusement Park sells admission tickets for $65 per person for one visit. Variable costs are $30 per visitor and fixed costs are $60,000,000 per month. The company's relevant range extends to 1,900,000 visitors per month. What is Crazy Coaster's projected operating income if 1,760,000 visitors come to the park during the month?

Accepted Answer

A) $1,600,000 
B) $61,600,000 
C) $114,400,000 
D) $54,400,000 
A) $1,600,000 
B) $61,600,000 
C) $114,400,000 
D) $54,400,000

Question 15

The margin of safety is the excess of expected sales over breakeven sales.

Accepted Answer

A) True 
 B)False

Question 16

J.I.T Auto sells its cars for $81,727 per unit (car). Variable costs are currently 40% of sales revenue. Fixed expenses are $980,724,000 per year. What is the breakeven point in units at the current selling price?

Accepted Answer

A) 49,036 units 
B) 8571 units 
C) 20,000 units 
D) 30,000 units 
A) 49,036 units 
B) 8571 units 
C) 20,000 units 
D) 30,000 units

Question 17

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 fixed expenses for this company are

Accepted Answer

A) depreciation, office salaries, and advertising. 
B) indirect materials, indirect labor, and depreciation. 
C) direct materials, direct labor, and depreciation. 
D) sales salaries, office salaries, and advertising. 
A) depreciation, office salaries, and advertising. 
B) indirect materials, indirect labor, and depreciation. 
C) direct materials, direct labor, and depreciation. 
D) sales salaries, office salaries, and advertising.

Question 18

To find the weighted average contribution margin, a company adds up the individual unit contribution margins of the different products and then divides by the number of different products.

Accepted Answer

A) True 
 B)False

Question 19

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.

Accepted Answer

The answer of William's Steel had the following fixed costs:
...

Question 20

Richard's Framing Company provides the following information about its single product.   What is the breakeven point in units?

Accepted Answer

A) 2100 
B) 10,800 
C) 372 
D) 72 
A) 2100 
B) 10,800 
C) 372 
D) 72

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

Light Me Up Lamps 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 as a percentage of target sales in dollars?

J&A Corporation has a monthly target operating income of $57,600. Variable expenses are 10% of sales and monthly fixed expenses are $14,400. What is J&A's operating leverage factor at the target level of operating income?

When using the income statement approach to finding breakeven, which of the following is true?

The margin of safety can be expressed in units, in sales dollars, or as a percentage.

To find the sales revenue needed to breakeven, the formula used could be

Dairy Days Ice Cream sells ice cream cones for $5 per customer. Variable costs are $2 per cone. Fixed costs are $2100 per month. What is Dairy Days' contribution margin ratio?

When a company sells more than one product, it does not have a unique breakeven point.

Prince Paper has budgeted the following amounts for its next fiscal year: If Price Paper spends an additional $12,300 on advertising, sales volume should increase by 1000 units. What effect will this have on operating income?

Bottles R Us Bottling Company provides the following information about its single product. What is the breakeven point in units?

The selling price of a particular product is $37.00 per unit, fixed costs total $225,600, and the breakeven sales in dollars is $940,000, what will the variable expense per unit be?

Sweet Treats sells ice cream cones for $4.00 per customer. Variable costs are $1.25 per cone. Fixed costs are $2800 per month. What is the company's contribution margin per ice cream cone?

To find the number of units that need to be sold to breakeven, the formula used could be

The margin of safety is the excess of expected sales over breakeven sales.

J.I.T Auto sells its cars for $81,727 per unit (car). Variable costs are currently 40% of sales revenue. Fixed expenses are $980,724,000 per year. What is the breakeven point in units at the current selling price?

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 fixed expenses for this company are

To find the weighted average contribution margin, a company adds up the individual unit contribution margins of the different products and then divides by the number of different products.

Richard's Framing Company provides the following information about its single product. What is the breakeven point in units?

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 7: Cost-Volume-Profit Analysis

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

Light Me Up Lamps 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 as a percentage of target sales in dollars?

J&A Corporation has a monthly target operating income of $57,600. Variable expenses are 10% of sales and monthly fixed expenses are $14,400. What is J&A's operating leverage factor at the target level of operating income?

When using the income statement approach to finding breakeven, which of the following is true?

The margin of safety can be expressed in units, in sales dollars, or as a percentage.

To find the sales revenue needed to breakeven, the formula used could be

Dairy Days Ice Cream sells ice cream cones for $5 per customer. Variable costs are $2 per cone. Fixed costs are $2100 per month. What is Dairy Days' contribution margin ratio?

When a company sells more than one product, it does not have a unique breakeven point.

Prince Paper has budgeted the following amounts for its next fiscal year: If Price Paper spends an additional $12,300 on advertising, sales volume should increase by 1000 units. What effect will this have on operating income?

Bottles R Us Bottling Company provides the following information about its single product. What is the breakeven point in units?

The selling price of a particular product is $37.00 per unit, fixed costs total $225,600, and the breakeven sales in dollars is $940,000, what will the variable expense per unit be?

Sweet Treats sells ice cream cones for $4.00 per customer. Variable costs are $1.25 per cone. Fixed costs are $2800 per month. What is the company's contribution margin per ice cream cone?

To find the number of units that need to be sold to breakeven, the formula used could be

The margin of safety is the excess of expected sales over breakeven sales.

J.I.T Auto sells its cars for $81,727 per unit (car). Variable costs are currently 40% of sales revenue. Fixed expenses are $980,724,000 per year. What is the breakeven point in units at the current selling price?

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 fixed expenses for this company are

To find the weighted average contribution margin, a company adds up the individual unit contribution margins of the different products and then divides by the number of different products.

Richard's Framing Company provides the following information about its single product. What is the breakeven point in units?

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters