Question 1

Accountants develop CVP analysis to help managers decide which products or services to emphasise.

Accepted Answer

A) True 
 B)False  True

Question 2

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x.   The vertical ("y") axis shows

Accepted Answer

A)  Dollars 
B)  Units 
C)  Contribution margin 
D)  Total profit 
A)  Dollars 
B)  Units 
C)  Contribution margin 
D)  Total profit A

Question 3

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x.   The solid line represents

Accepted Answer

A)  Total variable costs 
B)  Total fixed costs 
C)  Total costs 
D)  Total revenues 
A)  Total variable costs 
B)  Total fixed costs 
C)  Total costs 
D)  Total revenues C

Question 4

If sales are $80,000, variable costs are $50,000, and fixed costs are $20,000, the contribution margin ratio is

Accepted Answer

A)  37.5% 
B)  12.5% 
C)  62.5% 
D)  25.0% 
A)  37.5% 
B)  12.5% 
C)  62.5% 
D)  25.0%

Question 5

An assumption needed for CVP analysis in multiple-product companies is that the sales mix remains constant.

Accepted Answer

A) True 
 B)False

Question 6

Managers can use cost-volume-profit analysis to I Plan operating activity levels
II Achieve targeted profits
III Monitor organisational performance

Accepted Answer

A)  I only 
B)  II and III only 
C)  I and III only 
D)  I, II, and III 
A)  I only 
B)  II and III only 
C)  I and III only 
D)  I, II, and III

Question 7

The margin of safety percentage = margin of safety in units/ actual or estimated units

Accepted Answer

A) True 
 B)False

Question 8

CVP calculations can only be used in companies that sell a single product.

Accepted Answer

A) True 
 B)False

Question 9

ZTL Ltd produces three products. Cost, price, and volume data is shown below:   ZTL's pretax profit next period is expected to be

Accepted Answer

A)  $240 
B)  $300 
C)  More than $300 
D)  Cannot be determined 
A)  $240 
B)  $300 
C)  More than $300 
D)  Cannot be determined

Question 10

How many units in total must be sold to earn the target profit?

Accepted Answer

A)  687,500 
B)  165,000 
C)  112,500 
D)  144,375 
A)  687,500 
B)  165,000 
C)  112,500 
D)  144,375

Question 11

Because managers cannot usually be certain about their cost function, they also cannot be certain about the level of sales needed to earn a target profit.

Accepted Answer

A) True 
 B)False

Question 12

The cost function for Liao Ltd is: TC = $800 + 0.375 × Revenue. If Liao expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?

Accepted Answer

A)  $3,680 
B)  $2,400 
C)  $2,880 
D)  $1,600 
A)  $3,680 
B)  $2,400 
C)  $2,880 
D)  $1,600

Question 13

CVP analysis can assist in budgeting for discretionary expenditures, such as fixed costs for advertising.

Accepted Answer

A) True 
 B)False

Question 14

For companies with multiple products, the sales mix should be stated as a proportion of units when performing CVP computations in units.

Accepted Answer

A) True 
 B)False

Question 15

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x.   The horizontal ("x") axis shows

Accepted Answer

A)  Fixed costs 
B)  Revenues 
C)  Units 
D)  Variable costs 
A)  Fixed costs 
B)  Revenues 
C)  Units 
D)  Variable costs

Question 16

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:   If SXF increases its volume of sales by 10%, what will happen to its degree of operating leverage?

Accepted Answer

A)  It will decrease 
B)  It will increase 
C)  It will stay the same 
D)  Cannot be determined 
A)  It will decrease 
B)  It will increase 
C)  It will stay the same 
D)  Cannot be determined

Question 17

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its sales volume by 10%, what will happen to its margin of safety?

Accepted Answer

A)  It will decrease 
B)  It will increase 
C)  It will stay the same 
D)  Cannot be determined 
A)  It will decrease 
B)  It will increase 
C)  It will stay the same 
D)  Cannot be determined

Question 18

SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Area D is best described as

Accepted Answer

A)  Fixed cost 
B)  Margin of safety 
C)  Estimated profit at actual volume 
D)  Breakeven point 
A)  Fixed cost 
B)  Margin of safety 
C)  Estimated profit at actual volume 
D)  Breakeven point

Question 19

If all other factors remain unchanged, a 10% decrease in both the selling price and variable costs for a product will

Accepted Answer

A)  Lower the breakeven point in dollars 
B)  Raise the breakeven point in dollars 
C)  Have no effect on the breakeven point in dollars 
D)  Cannot be determined 
A)  Lower the breakeven point in dollars 
B)  Raise the breakeven point in dollars 
C)  Have no effect on the breakeven point in dollars 
D)  Cannot be determined

Question 20

CVP analysis is most likely to be used for which of the following decisions?

Accepted Answer

A)  The amount of discretionary expenditures for the next period 
B)  The organisational vision 
C)  The exact level of operations at which the organisation will operate 
D)  Whether to buy a business segment operating in Germany 
A)  The amount of discretionary expenditures for the next period 
B)  The organisational vision 
C)  The exact level of operations at which the organisation will operate 
D)  Whether to buy a business segment operating in Germany

Accountants develop CVP analysis to help managers decide which products or services to emphasise.

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The vertical ("y") axis shows

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The solid line represents

If sales are $80,000, variable costs are $50,000, and fixed costs are $20,000, the contribution margin ratio is

An assumption needed for CVP analysis in multiple-product companies is that the sales mix remains constant.

Managers can use cost-volume-profit analysis to I Plan operating activity levels II Achieve targeted profits III Monitor organisational performance

The margin of safety percentage = margin of safety in units/ actual or estimated units

CVP calculations can only be used in companies that sell a single product.

ZTL Ltd produces three products. Cost, price, and volume data is shown below: ZTL's pretax profit next period is expected to be

How many units in total must be sold to earn the target profit?

Because managers cannot usually be certain about their cost function, they also cannot be certain about the level of sales needed to earn a target profit.

The cost function for Liao Ltd is: TC = $800 + 0.375 × Revenue. If Liao expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?

CVP analysis can assist in budgeting for discretionary expenditures, such as fixed costs for advertising.

For companies with multiple products, the sales mix should be stated as a proportion of units when performing CVP computations in units.

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The horizontal ("x") axis shows

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its volume of sales by 10%, what will happen to its degree of operating leverage?

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its sales volume by 10%, what will happen to its margin of safety?

SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Area D is best described as

If all other factors remain unchanged, a 10% decrease in both the selling price and variable costs for a product will

CVP analysis is most likely to be used for which of the following decisions?

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Standard Costs, Flexible Budgets and Variance Analysis

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 4: Cost-Volume-Profit Cvp Analysis

Accountants develop CVP analysis to help managers decide which products or services to emphasise.

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The vertical ("y") axis shows

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The solid line represents

If sales are $80,000, variable costs are $50,000, and fixed costs are $20,000, the contribution margin ratio is

An assumption needed for CVP analysis in multiple-product companies is that the sales mix remains constant.

Managers can use cost-volume-profit analysis to I Plan operating activity levels II Achieve targeted profits III Monitor organisational performance

The margin of safety percentage = margin of safety in units/ actual or estimated units

CVP calculations can only be used in companies that sell a single product.

ZTL Ltd produces three products. Cost, price, and volume data is shown below: ZTL's pretax profit next period is expected to be

How many units in total must be sold to earn the target profit?

Because managers cannot usually be certain about their cost function, they also cannot be certain about the level of sales needed to earn a target profit.

The cost function for Liao Ltd is: TC = $800 + 0.375 × Revenue. If Liao expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?

CVP analysis can assist in budgeting for discretionary expenditures, such as fixed costs for advertising.

For companies with multiple products, the sales mix should be stated as a proportion of units when performing CVP computations in units.

Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The horizontal ("x") axis shows

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its volume of sales by 10%, what will happen to its degree of operating leverage?

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its sales volume by 10%, what will happen to its margin of safety?

SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Area D is best described as

If all other factors remain unchanged, a 10% decrease in both the selling price and variable costs for a product will

CVP analysis is most likely to be used for which of the following decisions?

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Job Costing Systems

Process Costing Systems

Absorption, Variable and Throughput Costing

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Standard Costs, Flexible Budgets and Variance Analysis

Operational Budgets

Strategy and Control

Planning and Budgeting for Strategic Success

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters