Question 1

How many dresses are sold when operating profit is zero?

Accepted Answer

A) 225 dresses 
B) 150 dresses 
C) 100 dresses 
D) 90 dresses 
A) 225 dresses 
B) 150 dresses 
C) 100 dresses 
D) 90 dresses

Question 2

Total revenues less total fixed costs equal the contribution margin.

Accepted Answer

A) True 
 B)False

Question 3

Fixed costs equal $12 000,unit contribution margin equals $20,and the number of units sold equal 1600.Operating profit is:

Accepted Answer

A) $32 000. 
B) $20 000. 
C) $40 000. 
D) $12 000. 
A) $32 000. 
B) $20 000. 
C) $40 000. 
D) $12 000.

Question 4

What is the break-even point,and why should a manager be concerned about it?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The break-even point is the level of pro

Question 5

The break-even point is the activity level where:

Accepted Answer

A) revenues equal fixed costs. 
B) contribution margin equals variable costs. 
C) revenues equal the sum of variable and fixed costs. 
D) revenues equal variable costs. 
A) revenues equal fixed costs. 
B) contribution margin equals variable costs. 
C) revenues equal the sum of variable and fixed costs. 
D) revenues equal variable costs.

Question 6

Answer the following questions using the information below:
Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs.
-If sales increase by $25 000,operating profit will increase by:

Accepted Answer

A) $10 000. 
B) $15 000. 
C) $22 200. 
D) None of these answers are correct. 
A) $10 000. 
B) $15 000. 
C) $22 200. 
D) None of these answers are correct.

Question 7

Which of the following is true about the assumptions underlying basic CVP analysis?

Accepted Answer

A) Only selling price is known and constant. 
B) Only selling price and variable cost per unit are known and constant. 
C) Selling price,variable cost per unit,fixed cost per unit,and total fixed costs are known and constant. 
D) Only selling price,variable cost per unit,and total fixed costs are known and constant. 
A) Only selling price is known and constant. 
B) Only selling price and variable cost per unit are known and constant. 
C) Selling price,variable cost per unit,fixed cost per unit,and total fixed costs are known and constant. 
D) Only selling price,variable cost per unit,and total fixed costs are known and constant.

Question 8

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.
-Suppose that management believes that a 20% reduction in the selling price will result in a 20% increase in sales.If this proposed reduction in selling price is implemented:

Accepted Answer

A) operating profit will decrease by $36 000. 
B) operating profit will decrease by $80 000. 
C) operating profit will increase by $36 000. 
D) operating profit will increase by $44 000. 
A) operating profit will decrease by $36 000. 
B) operating profit will decrease by $80 000. 
C) operating profit will increase by $36 000. 
D) operating profit will increase by $44 000.

Question 9

The contribution income statement highlights:

Accepted Answer

A) different product lines. 
B) products costs and period costs. 
C) gross margin. 
D) variable and fixed costs. 
A) different product lines. 
B) products costs and period costs. 
C) gross margin. 
D) variable and fixed costs.

Question 10

Cost-volume-profit analysis may be used for multi-product analysis when the proportion of different products remains constant.

Accepted Answer

A) True 
 B)False

Question 11

Healesville Stuffed Animals reported the following:
 $$\begin{array} { l r } 
\text { Revenues } & \$ 2000 \
\text { Variable manufacturing costs } & \$ 400 \
\text { Variable nonmanufacturing costs } & \$ 460 \
\text { Fixed manufacturing costs } & \$ 300 \
\text { Fixed nonmanufacturing costs } & \$ 280
\end{array}$$ 
Required:
a.Compute contribution margin.
b.Compute gross margin.
c.Compute operating profit.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

a.Contribution margin $2000 -

Question 12

If the sales mix shifts to one unit of Product Q and two units of Product P,then the break-even point will:

Accepted Answer

A) stay the same. 
B) decrease. 
C) increase. 
D) be indeterminable. 
A) stay the same. 
B) decrease. 
C) increase. 
D) be indeterminable.

Question 13

Kilos of yeast used by a bake shop is a potential measure of output for the bakery industry.

Accepted Answer

A) True 
 B)False

Question 14

The variable costing break-even point is dependent upon:

Accepted Answer

A) contribution margin per unit. 
B) fixed (manufacturing and operating)costs. 
C) Both A and B. 
D) Neither A or B. 
A) contribution margin per unit. 
B) fixed (manufacturing and operating)costs. 
C) Both A and B. 
D) Neither A or B.

Question 15

The selling price per unit less the variable cost per unit is the:

Accepted Answer

A) contribution margin per unit 
B) margin of safety 
C) fixed cost per unit 
D) gross margin 
A) contribution margin per unit 
B) margin of safety 
C) fixed cost per unit 
D) gross margin

Question 16

The contribution income statement:

Accepted Answer

A) categorises costs as either direct or indirect. 
B) can be used to predict future profits at different levels of activity. 
C) is allowed for external reporting to shareholders. 
D) reports gross margin. 
A) categorises costs as either direct or indirect. 
B) can be used to predict future profits at different levels of activity. 
C) is allowed for external reporting to shareholders. 
D) reports gross margin.

Question 17

Events,as distinguished from actions,would include:

Accepted Answer

A) decisions on direct material vendors. 
B) a financial recession. 
C) decisions on time schedules. 
D) personnel policy options. 
A) decisions on direct material vendors. 
B) a financial recession. 
C) decisions on time schedules. 
D) personnel policy options.

Question 18

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.
-Suppose that management believes that a $48 000 increase in the monthly advertising expense will result in a considerable increase in sales.Sales must increase by how much to justify this additional expenditure?

Accepted Answer

A) 320 units 
B) 480 units 
C) 160 units 
D) None of these answers are correct. 
A) 320 units 
B) 480 units 
C) 160 units 
D) None of these answers are correct.

Question 19

There is no unique break-even point when there are multiple cost drivers.

Accepted Answer

A) True 
 B)False

Question 20

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.
-How many actions and events will a decision table contain?

Accepted Answer

A) 1 action and 3 events 
B) 3 actions and 6 events 
C) 2 actions and 3 events 
D) 31 actions and 6 events 
A) 1 action and 3 events 
B) 3 actions and 6 events 
C) 2 actions and 3 events 
D) 31 actions and 6 events

How many dresses are sold when operating profit is zero?

Total revenues less total fixed costs equal the contribution margin.

Fixed costs equal $12 000,unit contribution margin equals $20,and the number of units sold equal 1600.Operating profit is:

What is the break-even point,and why should a manager be concerned about it? _ _

The break-even point is the activity level where:

Answer the following questions using the information below: Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs. -If sales increase by $25 000,operating profit will increase by:

Which of the following is true about the assumptions underlying basic CVP analysis?

The contribution income statement highlights:

Cost-volume-profit analysis may be used for multi-product analysis when the proportion of different products remains constant.

If the sales mix shifts to one unit of Product Q and two units of Product P,then the break-even point will:

Kilos of yeast used by a bake shop is a potential measure of output for the bakery industry.

The variable costing break-even point is dependent upon:

The selling price per unit less the variable cost per unit is the:

The contribution income statement:

Events,as distinguished from actions,would include:

There is no unique break-even point when there are multiple cost drivers.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 4: Costvolumeprofit Analysis

How many dresses are sold when operating profit is zero?

Total revenues less total fixed costs equal the contribution margin.

Fixed costs equal $12 000,unit contribution margin equals $20,and the number of units sold equal 1600.Operating profit is:

What is the break-even point,and why should a manager be concerned about it? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The break-even point is the activity level where:

Answer the following questions using the information below: Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs. -If sales increase by $25 000,operating profit will increase by:

Which of the following is true about the assumptions underlying basic CVP analysis?

The contribution income statement highlights:

Cost-volume-profit analysis may be used for multi-product analysis when the proportion of different products remains constant.

If the sales mix shifts to one unit of Product Q and two units of Product P,then the break-even point will:

Kilos of yeast used by a bake shop is a potential measure of output for the bakery industry.

The variable costing break-even point is dependent upon:

The selling price per unit less the variable cost per unit is the:

The contribution income statement:

Events,as distinguished from actions,would include:

There is no unique break-even point when there are multiple cost drivers.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

What is the break-even point,and why should a manager be concerned about it? _ _