Exam 4: Costvolumeprofit Analysis

Yurus Manufacturing Company produces two products,X and Y.The following information is presented for both products: Selling price per unit \ 36 \ 24 Variable cost per unit 28 12 Total fixed costs are $\$ 234000$ . Required: a.Calculate the contribution margin for each product. b.Calculate break-even point in units of both X and Y if the sales mix is 3 units of X for every unit of Y. c.Calculate break-even volume in total dollars if the sales mix is 2 units of X for every 3 units of Y. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Answer the following questions using the information below: Dr Charles Hunter,MD,performs a certain outpatient procedure for $1000.His fixed costs are $20 000,while his variable costs are $500 per procedure.Dr Hunter currently plans to perform 200 procedures this month. -What is the budgeted revenue for the month assuming that Dr Hunter plans to perform this procedure 200 times?

How many dresses must the Bridal Shoppe sell to yield after-tax net profit of $18 000,assuming the tax rate is 40%?

Answer the following questions using the information below: Campesi intends to sell his customers a special round-trip airline ticket package.He is able to purchase the package from the airline carrier for $250 each.The round-trip tickets will be sold for $300 each and the airline intends to reimburse Campesi for any unsold ticket packages.Fixed costs include $7500 in advertising costs. -How many ticket packages will Campesi need to sell in order to achieve $60 000 of operating profit?

Answer the following questions using the information below: Alice Springs University is planning to hold a fundraising banquet at one of the local golf clubs.It has two options for the banquet: OPTION 1: Crestview Golf Club a. Fixed rental cost of $1000 b. $12 per person for food OPTION 2: Tallgrass Golf Club a. Fixed rental cost of $3000 b. A caterer who charges $8.00 per person for food -Which option provides the greatest degree of operating leverage if 600 people attend?

In the merchandising sector:

If the break-even point is 100 units and each unit sells for $50,then:

In the graph method of CVP analysis,the break-even point is the (X-axis)quantity of units sold for which the total revenues line crosses the total costs line.

Assume there is an increase in advertising expenditures and all other CVP parameters remain constant.This change will:

The break-even point is not affected by income tax.

Answer the following questions using the information below: Gundagai Company sells several products.Information of average revenue and costs is as follows: Selling price per unit \ 28.50 Variable costs per unit: Direct material \ 5.25 Direct manufacturing labour \ 1.15 Manufacturing overhead \ 0.25 Selling costs \ 1.85 Annual fixed costs \ 110000 -The number of units that Gundagai must sell each year to break even is:

The degree of operating leverage at a specific level of sales helps the managers calculate the effect that potential changes in sales will have on operating profit.

Answer the following questions using the information below: Gosford Manufacturing produces a single product that sells for $200.Variable costs per unit equal $50.The company expects total fixed costs to be $140 000 for the next month at the projected sales level of 2000 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately. -What is the current break-even point in terms of number of units?

Answer the following questions using the information below: Patrick Ross has three booth rental options at the country fair where he plans to sell his new product.The booth rental options are: Option 1: $1000 fixed fee,or Option 2: $750 fixed fee + 5% of all revenues generated at the fair,or Option 3: 20% of all revenues generated at the fair. The product sells for $37.50 per unit.He is able to purchase the units for $12.50 each. -Which option should Patrick choose to maximise income assuming there is a 40% probability that 70 units will be sold and a 60% probability that 40 units will be sold?

If the selling price per unit of a product is $30,variable costs per unit are $20,and total fixed costs are $10 000 and a company sells 5000 units,operating profit would be $40 000.

Which of the following statements about operating profit (OP)is TRUE?

'Contribution margin' and 'gross margin' are terms that can be used interchangeably.

Break-even point is that quantity of output where total revenues equal total costs.

Answer the following questions using the information below: Warne's Flipper Company sells several products.Information of average revenue and costs is as follows: Selling price per unit \ 25.00 Variable costs per unit: Direct material \ 5.00 Direct manufacturing labour \ 1.80 Manufacturing overhead \ 0.80 Selling costs \ 2.00 Annual fixed costs \ 96000 -The number of units that Warne's Flipper must sell annually to make a profit of $289 000 is:

If a change is made in one parameter of CVP analysis,it is an example of: