Exam 7: Cost-Volume-Profit Analysis

Crossroads Packaging Co. has budgeted the following amounts for its next fiscal year: To maintain the original breakeven sales in units if fixed expenses were to increase by 10%, the selling price per unit would have to be

Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $4.00, variable costs are $1.25 per dozen, and total fixed costs are $825.00. How many dozens of ears of corn must Corny and Sweet sell to breakeven?

Medoc Company provides the following information about its single product. What is the breakeven point in units?

Contribution margin ratio is computed by

If the selling price per unit is $65, total fixed expenses are $96,000, and the breakeven sales in dollars is $320,000, what will the variable expense per unit be?

What will be the effect on the contribution margin ratio if the selling price per unit decreases and variable cost per unit remains the same?

The Halpert Group produces a single product selling for $40 per unit. Variable costs are $7 per unit and total fixed costs are $7000. What is the contribution margin ratio?

A company's margin of safety can be stated

If the selling price per unit is $7, the unit contribution margin is $4, and total fixed expenses are $11,200, what are the breakeven sales in units?

Mimi Incorporated has a targeted operating income of $518,000 for the upcoming year. The selling price of its single product is $40.50 each, while the variable cost per unit is $12.50. Fixed costs total $182,000. Calculate the following: a. Contribution margin per unit b. Breakeven point in units c. Units to be sold to earn the targeted operating income

The operating leverage factor will be exactly "1" only if a company has no fixed costs.

Yellow Company's variable expenses are 30% of sales and have monthly fixed expenses of $21,000. The monthly target operating income is $4200. What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

The manager at the Yarn Factory changed the price of spools to increase sales. The current price per unit is $13.85 per box of 500 spools; and, the forecasted lower price per unit to increase sales is $11.55 per box of 500 spools. If the variable expenses remain at $8.79 and the fixed expenses remain $3000 how many units must be sold at the new price to breakeven? Compute the contribution margin per unit using the old sales price. Next, compute the contribution margin per unit using the new sales price. Use the new unit contribution margin to compute breakeven sales in units. What is the breakeven sales in units?

Spice Company has a product which sells for $190 and has a unit contribution margin of $60. It has fixed costs of $20/unit at the current production volume. Spice Company's contribution margin ratio is

The contribution margin ratio explains the percentage of each sales dollar that

Total predicted sales (in units)minus total breakeven sales in units divided by total predicted sales (in units)yields

I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road, Peanut Butter, and Fruity Tooty. It sold 13,000 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 $28,800 and additional information follows: Breakeven sales in dollars for I Scream For Ice Cream is

Company A has a higher margin of safety while Company B has a lower margin of safety. Company A would be considered ________ Company B when considering only margin of safety.

If the selling price per unit is $70, the variable expense per unit is $50, and total fixed expenses are $261,000, what are the breakeven sales in dollars?

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?