Question 1

The income statement for Thomas Manufacturing Company for 2004 is as follows: If sales increase by £60,000, what will happen to profit?

Accepted Answer

A)  increase by £60,000 
B)  increase by £24,000 
C)  increase by £6,000 
D)  increase by £36,000 
A)  increase by £60,000 
B)  increase by £24,000 
C)  increase by £6,000 
D)  increase by £36,000

Question 2

The following diagram is a cost-volume-profit graph for a manufacturing company: The difference between line AB and line AC (area BAC) is the

Accepted Answer

A)  contribution ratio. 
B)  total variable cost. 
C)  contribution margin per unit. 
D)  total fixed cost. 
A)  contribution ratio. 
B)  total variable cost. 
C)  contribution margin per unit. 
D)  total fixed cost.

Question 3

In a profit-volume graph, the slope of the profit line represents

Accepted Answer

A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin. 
A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin.

Question 4

Assume the following information: What volume of monetary sales is needed to break even?

Accepted Answer

A)  £75,000 
B)  £300,000 
C)  £48,000 
D)  £12,000 
A)  £75,000 
B)  £300,000 
C)  £48,000 
D)  £12,000

Question 5

The income statement for Thomas Manufacturing Company for 2004 is as 4follows: What is the contribution margin ratio?

Accepted Answer

A)  40% 
B)  60% 
C)  100% 
D)  30% 
A)  40% 
B)  60% 
C)  100% 
D)  30%

Question 6

Thomas Company had the following information: Suppose Thomas could reduce setup costs by £500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours. How many units must be sold to break even in this case?

Accepted Answer

A)  30,000 units 
B)  25,050 units 
C)  25,650 units 
D)  11,250 units 
A)  30,000 units 
B)  25,050 units 
C)  25,650 units 
D)  11,250 units

Question 7

Thomas Company had the following information: How many units need to be sold to produce a before-tax profit of £120,000 using ABC?

Accepted Answer

A)  51,000 units 
B)  36,000 units 
C)  21,000 units 
D)  81,000 units 
A)  51,000 units 
B)  36,000 units 
C)  21,000 units 
D)  81,000 units

Question 8

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. How many units must be sold in order to obtain a before-tax profit of £12,000?

Accepted Answer

A)  350 units 
B)  584 units 
C)  875 units 
D)  333 units 
A)  350 units 
B)  584 units 
C)  875 units 
D)  333 units

Question 9

The relevant range is a relatively

Accepted Answer

A)  wide span of production where total fixed costs are expected to remain the same 
B)  wide range of sales where total variable costs remain the same 
C)  wide range of sales where all costs remain the same 
D)  narrow range of production where total variable costs remain the same 
A)  wide span of production where total fixed costs are expected to remain the same 
B)  wide range of sales where total variable costs remain the same 
C)  wide range of sales where all costs remain the same 
D)  narrow range of production where total variable costs remain the same

Question 10

The Kringel Company provides the following information: What is the break-even point in units for Kringel?

Accepted Answer

A)  33,334 units 
B)  100,000 units 
C)  40,000 units 
D)  200,000 units 
A)  33,334 units 
B)  100,000 units 
C)  40,000 units 
D)  200,000 units

Question 11

Lewis Production Company had the following projected information for 2004: What level of monetary sales is needed to obtain a target before-tax profit of £75,000?

Accepted Answer

A)  £375,000 
B)  £625,000 
C)  £750,000 
D)  £937,500 
A)  £375,000 
B)  £625,000 
C)  £750,000 
D)  £937,500

Question 12

In 2004, Angel's Bath and Body Shop had variable costs of £27,000, fixed costs of £18,000, and a net loss of £4,500. The annual sales volume required for Angel's to have a before-tax income of £18,000 is

Accepted Answer

A)  £126,000. 
B)  £84,000. 
C)  £73,500. 
D)  £42,000. 
A)  £126,000. 
B)  £84,000. 
C)  £73,500. 
D)  £42,000.

Question 13

The following information is provided: The margin of safety is

Accepted Answer

A)  2,000 units 
B)  3,000 units 
C)  5,000 units 
D)  7,000 units 
A)  2,000 units 
B)  3,000 units 
C)  5,000 units 
D)  7,000 units

Question 14

The average unit cost at a monthly volume of 9,000 units is £3, and the average unit cost at a monthly volume of 22,500 units is £2.10.
Required:
Develop an equation for total monthly costs.

Accepted Answer

Variable cost per unit = (£47,

Question 15

In the formula, Total cost = Fixed cost + (Variable rate x Output), fixed cost refers to the

Accepted Answer

A)  slope parameter or b 
B)  intercept parameter or a 
C)  dependent variable 
D)  independent variable 
A)  slope parameter or b 
B)  intercept parameter or a 
C)  dependent variable 
D)  independent variable

Question 16

The Allen Company had the following income statement for the month of July 2004: Allen Company's break-even sales volume is

Accepted Answer

A)  20,000 units. 
B)  7,000 units. 
C)  11,211 units. 
D)  10,000 units. 
A)  20,000 units. 
B)  7,000 units. 
C)  11,211 units. 
D)  10,000 units.

Question 17

Sarah Smith, a sole proprietor, has the following projected figures for next year: What is the break-even point in monetary terms?

Accepted Answer

A)  £426,000 
B)  £2,100,000 
C)  £189,000 
D)  £900,000 
A)  £426,000 
B)  £2,100,000 
C)  £189,000 
D)  £900,000

Question 18

In a cost-volume-profit graph,

Accepted Answer

A)  the total revenue line crosses the horizontal axis at the break-even point. 
B)  beyond the break-even sales volume, profits are maximized at the sales volume where total revenues equal total costs. 
C)  an increase in unit variable costs would decrease the slope of the total cost line. 
D)  an increase in the unit selling price would shift the break-even point in units to the left. 
A)  the total revenue line crosses the horizontal axis at the break-even point. 
B)  beyond the break-even sales volume, profits are maximized at the sales volume where total revenues equal total costs. 
C)  an increase in unit variable costs would decrease the slope of the total cost line. 
D)  an increase in the unit selling price would shift the break-even point in units to the left.

Question 19

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. What is the break-even point in monetary sales for Baker Company?

Accepted Answer

A)  £3,600 
B)  £5,400 
C)  £15,000 
D)  £9,000 
A)  £3,600 
B)  £5,400 
C)  £15,000 
D)  £9,000

Question 20

The contribution margin at the break-even point

Accepted Answer

A)  equals total fixed costs. 
B)  is zero. 
C)  plus total fixed costs equals total revenues. 
D)  is greater than variable costs. 
A)  equals total fixed costs. 
B)  is zero. 
C)  plus total fixed costs equals total revenues. 
D)  is greater than variable costs.

The income statement for Thomas Manufacturing Company for 2004 is as follows: If sales increase by £60,000, what will happen to profit?

The following diagram is a cost-volume-profit graph for a manufacturing company: The difference between line AB and line AC (area BAC) is the

In a profit-volume graph, the slope of the profit line represents

Assume the following information: What volume of monetary sales is needed to break even?

The income statement for Thomas Manufacturing Company for 2004 is as 4follows: What is the contribution margin ratio?

Thomas Company had the following information: Suppose Thomas could reduce setup costs by £500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours. How many units must be sold to break even in this case?

Thomas Company had the following information: How many units need to be sold to produce a before-tax profit of £120,000 using ABC?

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. How many units must be sold in order to obtain a before-tax profit of £12,000?

The relevant range is a relatively

The Kringel Company provides the following information: What is the break-even point in units for Kringel?

Lewis Production Company had the following projected information for 2004: What level of monetary sales is needed to obtain a target before-tax profit of £75,000?

In 2004, Angel's Bath and Body Shop had variable costs of £27,000, fixed costs of £18,000, and a net loss of £4,500. The annual sales volume required for Angel's to have a before-tax income of £18,000 is

The following information is provided: The margin of safety is

The average unit cost at a monthly volume of 9,000 units is £3, and the average unit cost at a monthly volume of 22,500 units is £2.10. Required: Develop an equation for total monthly costs.

In the formula, Total cost = Fixed cost + (Variable rate x Output), fixed cost refers to the

The Allen Company had the following income statement for the month of July 2004: Allen Company's break-even sales volume is

Sarah Smith, a sole proprietor, has the following projected figures for next year: What is the break-even point in monetary terms?

In a cost-volume-profit graph,

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. What is the break-even point in monetary sales for Baker Company?

The contribution margin at the break-even point

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters

Exam 3: Cost-Volume-Profit Analysis

The income statement for Thomas Manufacturing Company for 2004 is as follows: If sales increase by £60,000, what will happen to profit?

The following diagram is a cost-volume-profit graph for a manufacturing company: The difference between line AB and line AC (area BAC) is the

In a profit-volume graph, the slope of the profit line represents

Assume the following information: What volume of monetary sales is needed to break even?

The income statement for Thomas Manufacturing Company for 2004 is as 4follows: What is the contribution margin ratio?

Thomas Company had the following information: Suppose Thomas could reduce setup costs by £500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours. How many units must be sold to break even in this case?

Thomas Company had the following information: How many units need to be sold to produce a before-tax profit of £120,000 using ABC?

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. How many units must be sold in order to obtain a before-tax profit of £12,000?

The relevant range is a relatively

The Kringel Company provides the following information: What is the break-even point in units for Kringel?

Lewis Production Company had the following projected information for 2004: What level of monetary sales is needed to obtain a target before-tax profit of £75,000?

In 2004, Angel's Bath and Body Shop had variable costs of £27,000, fixed costs of £18,000, and a net loss of £4,500. The annual sales volume required for Angel's to have a before-tax income of £18,000 is

The following information is provided: The margin of safety is

The average unit cost at a monthly volume of 9,000 units is £3, and the average unit cost at a monthly volume of 22,500 units is £2.10. Required: Develop an equation for total monthly costs.

In the formula, Total cost = Fixed cost + (Variable rate x Output), fixed cost refers to the

The Allen Company had the following income statement for the month of July 2004: Allen Company's break-even sales volume is

Sarah Smith, a sole proprietor, has the following projected figures for next year: What is the break-even point in monetary terms?

In a cost-volume-profit graph,

Baker Company sells its product for £60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of £9,000. What is the break-even point in monetary sales for Baker Company?

The contribution margin at the break-even point

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters