Question 1

A decision table is a summary of the alternative actions,events,outcomes,and probabilities of events.

Accepted Answer

A) True 
 B)False

Question 2

Frazer Corp sells several products.Information of average revenue and costs is as follows: $\begin{array}{lr}
\text { Selling price per unit } & \$ 28.50 \
\text { Variable costs per unit: } & \
\text { Direct material } & \$ 5.50 \
\text { Direct manufacturing labor } & \$ 1.15 \
\text { Manufacturing overhead } & \$ 0.85 \
\text { Selling costs } & \$ 2.50 \
\text { Annual fixed costs } & \$ 125,000
\end{array}$ 
If the company decides to lower its selling price by 12.25%,the operating income is reduced by ________.

Accepted Answer

A)  $52,500 
B)  $50,500 
C)  $55,500 
D)  $29,500 
A)  $52,500 
B)  $50,500 
C)  $55,500 
D)  $29,500

Question 3

The margin of safety is the difference between ________.

Accepted Answer

A)  budgeted expenses and breakeven expenses 
B)  budgeted revenues and breakeven revenues 
C)  actual operating income and budgeted operating income 
D)  actual sales margin and budgeted sales margin 
A)  budgeted expenses and breakeven expenses 
B)  budgeted revenues and breakeven revenues 
C)  actual operating income and budgeted operating income 
D)  actual sales margin and budgeted sales margin

Question 4

The three methods used to study CVP analysis are graphical method,contribution method,and equation method.

Accepted Answer

A) True 
 B)False

Question 5

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,000,variable costs are $400,and fixed costs are $90,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000,assuming the tax rate is 40%?

Accepted Answer

A)  200 dresses 
B)  170 dresses 
C)  150 dresses 
D)  145 dresses 
A)  200 dresses 
B)  170 dresses 
C)  150 dresses 
D)  145 dresses

Question 6

Assume only the specified parameters change in a CVP analysis.The contribution margin percentage increases when ________.

Accepted Answer

A)  total fixed costs increase 
B)  total fixed costs decrease 
C)  variable costs per unit increase 
D)  variable costs per unit decrease 
A)  total fixed costs increase 
B)  total fixed costs decrease 
C)  variable costs per unit increase 
D)  variable costs per unit decrease

Question 7

A planned decrease in selling price would be expected to cause an increase in the quantity sold.

Accepted Answer

A) True 
 B)False

Question 8

In the manufacturing sector,________.

Accepted Answer

A)  only variable costs are subtracted to determine gross margin 
B)  fixed overhead costs are subtracted to determine gross margin 
C)  fixed overhead costs are subtracted to determine contribution margin 
D)  all operating costs are subtracted to determine contribution margin 
A)  only variable costs are subtracted to determine gross margin 
B)  fixed overhead costs are subtracted to determine gross margin 
C)  fixed overhead costs are subtracted to determine contribution margin 
D)  all operating costs are subtracted to determine contribution margin

Question 9

A nonprofit organization aids the unemployed by supplementing their incomes by $5,000 annually,while they seek new employment skills.The organization has fixed costs of $200,000 and the budgeted appropriation for the year totals $700,000.How many individuals can receive financial assistance this year?

Accepted Answer

A)  115 people 
B)  110 people 
C)  100 people 
D)  95 people 
A)  115 people 
B)  110 people 
C)  100 people 
D)  95 people

Question 10

If unit outputs exceed the breakeven point ________.

Accepted Answer

A)  there will be an increase in fixed costs 
B)  total sales revenue will exceed fixed costs 
C)  total sales revenue will exceed variable costs 
D)  there will be a profit 
A)  there will be an increase in fixed costs 
B)  total sales revenue will exceed fixed costs 
C)  total sales revenue will exceed variable costs 
D)  there will be a profit

Question 11

The shorter the time horizon,the lower the percentage of total costs considered fixed.

Accepted Answer

A) True 
 B)False

Question 12

Gross margin is ________.

Accepted Answer

A)  sales revenue less variable costs 
B)  sales revenue less cost of goods sold 
C)  contribution margin less fixed costs 
D)  contribution margin less variable costs 
A)  sales revenue less variable costs 
B)  sales revenue less cost of goods sold 
C)  contribution margin less fixed costs 
D)  contribution margin less variable costs

Question 13

Companies with a greater proportion of direct costs have a greater risk of loss than companies with a greater proportion of indirect costs.

Accepted Answer

A) True 
 B)False

Question 14

If the contribution margin ratio is 0.25,targeted operating income is $50,000,and targeted sales volume in dollars is $250,000,then total fixed costs are ________.

Accepted Answer

A)  $11,500 
B)  $15,000 
C)  $20,000 
D)  $12,500 
A)  $11,500 
B)  $15,000 
C)  $20,000 
D)  $12,500

Question 15

In 2015,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2016,the company expects annual property taxes to decrease by $15,000.
Required:
a.Calculate operating income and the breakeven point for 2015.
b.Calculate the breakeven point for 2016.

Accepted Answer

a.In 2015,operating income is $1,000,000

Question 16

Answer the following questions using the information below:
Alex Furniture sells a table for $850. His fixed costs are $25,000, while his variable costs are $500 per table. He currently plans to sell 175 tables this month.
-What is the budgeted operating income for the month assuming that Alex sells 175 tables?

Accepted Answer

A)  $45,250 
B)  $37,000 
C)  $36,250 
D)  $36,750 
A)  $45,250 
B)  $37,000 
C)  $36,250 
D)  $36,750

Question 17

The breakeven point is the activity level where ________.

Accepted Answer

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

Question 18

The classification of costs as variable and fixed depends on the relevant range,the length of the time horizon,and the specific decision situation.

Accepted Answer

A) True 
 B)False

Question 19

If Beta Corp's net income is $210,000 and the tax rate is 30%,then the company's planned operating income is ________.

Accepted Answer

A)  $325,000 
B)  $300,000 
C)  $273,000 
D)  $357,000 
A)  $325,000 
B)  $300,000 
C)  $273,000 
D)  $357,000

Question 20

At breakeven point,________.

Accepted Answer

A)  operating income is equal to zero 
B)  contribution margin minus fixed costs is equal to profits earned 
C)  revenues equal fixed costs minus variable costs 
D)  breakeven revenues equal fixed costs divided by the variable cost per unit 
A)  operating income is equal to zero 
B)  contribution margin minus fixed costs is equal to profits earned 
C)  revenues equal fixed costs minus variable costs 
D)  breakeven revenues equal fixed costs divided by the variable cost per unit

A decision table is a summary of the alternative actions,events,outcomes,and probabilities of events.

The margin of safety is the difference between ________.

The three methods used to study CVP analysis are graphical method,contribution method,and equation method.

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,000,variable costs are $400,and fixed costs are $90,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000,assuming the tax rate is 40%?

Assume only the specified parameters change in a CVP analysis.The contribution margin percentage increases when ________.

A planned decrease in selling price would be expected to cause an increase in the quantity sold.

In the manufacturing sector,________.

If unit outputs exceed the breakeven point ________.

The shorter the time horizon,the lower the percentage of total costs considered fixed.

Gross margin is ________.

Companies with a greater proportion of direct costs have a greater risk of loss than companies with a greater proportion of indirect costs.

If the contribution margin ratio is 0.25,targeted operating income is $50,000,and targeted sales volume in dollars is $250,000,then total fixed costs are ________.

In 2015,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2016,the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2015. b.Calculate the breakeven point for 2016.

The breakeven point is the activity level where ________.

The classification of costs as variable and fixed depends on the relevant range,the length of the time horizon,and the specific decision situation.

If Beta Corp's net income is $210,000 and the tax rate is 30%,then the company's planned operating income is ________.

At breakeven point,________.

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

Filters

Exam 3: Cost-Volume-Profit Analysis

A decision table is a summary of the alternative actions,events,outcomes,and probabilities of events.

The margin of safety is the difference between ________.

The three methods used to study CVP analysis are graphical method,contribution method,and equation method.

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,000,variable costs are $400,and fixed costs are $90,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000,assuming the tax rate is 40%?

Assume only the specified parameters change in a CVP analysis.The contribution margin percentage increases when ________.

A planned decrease in selling price would be expected to cause an increase in the quantity sold.

In the manufacturing sector,________.

If unit outputs exceed the breakeven point ________.

The shorter the time horizon,the lower the percentage of total costs considered fixed.

Gross margin is ________.

Companies with a greater proportion of direct costs have a greater risk of loss than companies with a greater proportion of indirect costs.

If the contribution margin ratio is 0.25,targeted operating income is $50,000,and targeted sales volume in dollars is $250,000,then total fixed costs are ________.

In 2015,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2016,the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2015. b.Calculate the breakeven point for 2016.

The breakeven point is the activity level where ________.

The classification of costs as variable and fixed depends on the relevant range,the length of the time horizon,and the specific decision situation.

If Beta Corp's net income is $210,000 and the tax rate is 30%,then the company's planned operating income is ________.

At breakeven point,________.

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

Filters