Answer the following questions using the information below: Assume the following cost information for Fernandez Company: $\begin{array}{lr} \text { Selling price } & \$ 120 \text { per unit } \\ \text { Variable costs } & \$ 80 \text { per urit } \\ \text { Total fixed costs } & \$ 80,000 \\ \text { Taxrate } & 40 \% \end{array}$ -What is the number of units that must be sold to earn an after-tax net income of $42,000?

A) 3,750 units B) 4,625 units C) 3,050 units D) 1,875 units A) 3,750 units B) 4,625 units C) 3,050 units D) 1,875 units

Bovous Stores,Inc.,sells several products.Information of average revenue and costs is as follows: $\begin{array}{lr} \text { Selling price per unit } & \$ 20.00 \\ \text { Variable costs per unit: } & \\ \text { Direct material } & \$ 4.00 \\ \text { Direct manufacturing labor } & \$ 1.60 \\ \text { Manufacturing overhead } & \$ 0.40 \\ \text { Selling costs } & \$ 2.00 \\ \text { Annual fixed costs } & \$ 96,000 \end{array}$ The revenues that the company must earn annually to make a profit of $144,000 are ________.

A) $378,000 B) $425,000 C) $400,000 D) $450,000 A) $378,000 B) $425,000 C) $400,000 D) $450,000

Exam 3: Cost-Volume-Profit Analysis

Answer the following questions using the information below: Southwestern College is planning to hold a fund raising banquet at one of the local country clubs. It has two options for the banquet: Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band which will cost another $800. Tickets are expected to be $30 per person. Local business supporters will donate any other items required for the event. -Which option provides the least amount of risk?

(Multiple Choice)

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Question 41

A revenue driver is a variable,such as volume,that causally affects revenues.

(True/False)

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Question 42

A profit-volume graph shows the impact on operating income from changes in the output level.

(True/False)

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Question 43

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

(True/False)

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Question 44

Sky High sells helicopters.During the current year,100 helicopters were sold resulting in $820,000 of sales revenue,$250,000 of variable costs,and $342,000 of fixed costs.Breakeven point in units is ________.

(Multiple Choice)

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Question 45

Suppose a company decided to automate a production line.Explain what effects this would have on a company's cost structure using CVP terminology.Could these changes have any possible negative effect on the firm?

(Essay)

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Question 46

Mount Carmel Company sells only two products,Product A and Product B. Product A Product B Total Selling price \ 40 \ 50 Variable cost per unit \ 24 \ 40 Total fixed costs \ 840,000 Mount Carmel sells two units of Product A for each unit it sells of Product B.Mount Carmel faces a tax rate of 30%. Required: a.What is the breakeven point in units for each product assuming the sales mix is 2 units of Product A for each unit of Product B? b.What is the breakeven point if Mount Carmel's tax rate is reduced to 25%,assuming the sales mix is 2 units of Product A for each unit of Product B? c.How many units of each product would be sold if Mount Carmel desired an after-tax net income of $73,500,facing a tax rate of 30%?

(Essay)

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Question 47

Sales of Blistre Autos are 350,000,variable cost is 200,000,fixed cost is 75,000,tax rate is 20%.Calculate the operating leverage of the company.

(Multiple Choice)

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Question 48

Answer the following questions using the information below: Assume the following cost information for Fernandez Company: Selling price \ 120 per unit Variable costs \ 80 per urit Total fixed costs \ 80,000 Taxrate 40\% -What is the number of units that must be sold to earn an after-tax net income of $42,000?

(Multiple Choice)

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Question 49

Which of the following is an output measure for a hospital?

(Multiple Choice)

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Question 50

Which of the following is true of cost-volume-profit analysis?

(Multiple Choice)

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Question 51

Explain sensitivity analysis and how do managers use sensitivity analysis to evaluate its implications?

(Essay)

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Question 52

If the contribution margin ratio is 0.40,targeted operating income is $50,000,and fixed costs are $75,000,then sales volume in dollars is ________.

(Multiple Choice)

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Question 53

If the sales mix shifts to one unit of Product X and two units of Product Y,then the breakeven point will ________.

(Multiple Choice)

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Question 54

An increase in the tax rate will increase the breakeven point.

(True/False)

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Question 55

Answer the following questions using the information below: The following information is for Alex Corp: -What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

(Multiple Choice)

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Question 56

Companies that are substituting variable costs for fixed costs receive a greater per unit return above the breakeven point.

(True/False)

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Question 57

Furniture,Inc.,sells lamps for $30.The unit variable cost per lamp is $22.Fixed costs total $9,600. Required: a.What is the contribution margin per lamp? b.What is the breakeven point in lamps? c.How many lamps must be sold to earn a pretax income of $8,000? d.What is the margin of safety,assuming 1,500 lamps are sold?

(Essay)

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Question 58

Bovous Stores,Inc.,sells several products.Information of average revenue and costs is as follows: Selling price per unit \ 20.00 Variable costs per unit: Direct material \ 4.00 Direct manufacturing labor \ 1.60 Manufacturing overhead \ 0.40 Selling costs \ 2.00 Annual fixed costs \ 96,000 The revenues that the company must earn annually to make a profit of $144,000 are ________.

(Multiple Choice)

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(85)

Question 59

Winnz sells 8,000 units resulting in $100,000 of sales revenue,$35,000 of variable costs,and $45,000 of fixed costs.To achieve $150,000 in operating income,sales must total ________.

(Multiple Choice)

4.8/5

(85)

Question 60

Showing 41 - 60 of 208

A revenue driver is a variable,such as volume,that causally affects revenues.

A profit-volume graph shows the impact on operating income from changes in the output level.

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

Sky High sells helicopters.During the current year,100 helicopters were sold resulting in $820,000 of sales revenue,$250,000 of variable costs,and $342,000 of fixed costs.Breakeven point in units is ________.

Suppose a company decided to automate a production line.Explain what effects this would have on a company's cost structure using CVP terminology.Could these changes have any possible negative effect on the firm?

Sales of Blistre Autos are 350,000,variable cost is 200,000,fixed cost is 75,000,tax rate is 20%.Calculate the operating leverage of the company.

Which of the following is an output measure for a hospital?

Which of the following is true of cost-volume-profit analysis?

Explain sensitivity analysis and how do managers use sensitivity analysis to evaluate its implications?

If the contribution margin ratio is 0.40,targeted operating income is $50,000,and fixed costs are $75,000,then sales volume in dollars is ________.

If the sales mix shifts to one unit of Product X and two units of Product Y,then the breakeven point will ________.

An increase in the tax rate will increase the breakeven point.

Answer the following questions using the information below: The following information is for Alex Corp: -What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

Companies that are substituting variable costs for fixed costs receive a greater per unit return above the breakeven point.

Winnz sells 8,000 units resulting in $100,000 of sales revenue,$35,000 of variable costs,and $45,000 of fixed costs.To achieve $150,000 in operating income,sales must total ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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

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