Indiana Hot Tubs,Inc.reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 770,000 \\ \hline \text { Variable Costs } & 220,000 \\ \hline \text { Fixed Costs } & 73,000 \\ \hline \end{array}\] Calculate the operating income for August using variable costing.

A) $550,000 B) $697,000 C) $477,000 D) $770,000 A) $550,000 B) $697,000 C) $477,000 D) $770,000

Nimtrans,Inc.reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 800,000 \\ \hline \text { Variable Cost of Goods Sold } & 170,000 \\ \hline \text { Fixed Cost of Goods Sold } & 70,000 \\ \hline \text { Variable Selling and Administrative Costs } & 180,000 \\ \hline \text { Fixed Selling and Administrative Costs } & 70,000 \\ \hline \end{array}\] Calculate the gross profit for August using absorption costing.

A) $730,000 B) $620,000 C) $630,000 D) $560,000 A) $730,000 B) $620,000 C) $630,000 D) $560,000

Water Rockets Company has provided the following information regarding the two products that it sells: \[\begin{array} { | l | r | r | } \hline & \text { Jet Boats } & \text { Ski Boats } \\ \hline \text { Sales price per unit } & \$ 8,000 & \$ 20,000 \\ \hline \text { Variable cost per unit } & \$ 5,000 & \$ 15,000 \\ \hline \end{array}\] Annual fixed costs are $290,000. How many units must be sold in order for Water Rockets to breakeven,assuming the company sells five jet boats for every two ski boats sold? (Round intermediary dollar amounts to the nearest dollar and round unit amounts up to the next whole unit.)

A) 73 jet boats and 30 ski boats B) 59 jet boats and 24 ski boats C) 24 jet boats and 59 ski boats D) 53 jet boats and 21 ski boats A) 73 jet boats and 30 ski boats B) 59 jet boats and 24 ski boats C) 24 jet boats and 59 ski boats D) 53 jet boats and 21 ski boats

Ito Company has provided the following information: \[\begin{array} { | l | r | } \hline \text { Price per unit } & \$ 48 \\ \hline \text { Variable cost per unit } & 18 \\ \hline \text { Fixed costs per month } & \$ 20,000 \\ \hline \end{array}\] What is the contribution margin ratio?

A) 18% B) 38% C) 48% D) 63% A) 18% B) 38% C) 48% D) 63%

Johar Company provides the following information about its product: \[\begin{array} { | l | r | } \hline \text { Targeted operating income } & \$ 65,000 \\ \hline \text { Selling price per unit } & 12.00 \\ \hline \text { Variable cost per unit } & 1.80 \\ \hline \text { Total fixed costs } & 130,000 \\ \hline \end{array}\] What is the contribution margin ratio?

A) 85% B) 100% C) 118% D) 15% A) 85% B) 100% C) 118% D) 15%

Exam 21: Cost-Volume-Profit Analysis

The Button-Down Custom Co.sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 30%.What is the variable cost per shirt?

(Multiple Choice)

4.9/5

(83)

Question 141

If fixed costs go up,and all other factors remain the same,the margin of safety will become larger.

(True/False)

4.9/5

(65)

Question 142

A cost-volume-profit (CVP)graph shows how changes in the level of sales will affect profits.

(True/False)

4.9/5

(70)

Question 143

The dollar amount that provides for covering fixed costs and then provides for operating income is called ________.

(Multiple Choice)

4.9/5

(72)

Question 144

Which of the following is a variable cost?

(Multiple Choice)

4.7/5

(64)

Question 145

Indiana Hot Tubs,Inc.reports the following information for August: Sales Revenue \ 770,000 Variable Costs 220,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

(Multiple Choice)

4.8/5

(84)

Question 146

Nimtrans,Inc.reports the following information for August: Sales Revenue \ 800,000 Variable Cost of Goods Sold 170,000 Fixed Cost of Goods Sold 70,000 Variable Selling and Administrative Costs 180,000 Fixed Selling and Administrative Costs 70,000 Calculate the gross profit for August using absorption costing.

(Multiple Choice)

4.8/5

(81)

Question 147

Which of the following statements is true if the variable cost per unit increases while the sale price per unit and total fixed costs remain constant?

(Multiple Choice)

4.8/5

(91)

Question 148

When there are no units in the beginning Finished Goods Inventory and the units produced are more than the units sold,the operating income will be higher under variable costing than absorption costing.

(True/False)

4.8/5

(77)

Question 149

Water Rockets Company has provided the following information regarding the two products that it sells: Jet Boats Ski Boats Sales price per unit \ 8,000 \ 20,000 Variable cost per unit \ 5,000 \ 15,000 Annual fixed costs are $290,000. How many units must be sold in order for Water Rockets to breakeven,assuming the company sells five jet boats for every two ski boats sold? (Round intermediary dollar amounts to the nearest dollar and round unit amounts up to the next whole unit.)

(Multiple Choice)

4.8/5

(68)

Question 150

When all of the units produced are sold,the operating income is the same under both the absorption and variable costing methods.Assume no beginning and ending inventories.Which of the following gives the correct reason for the above statement?

(Multiple Choice)

4.8/5

(75)

Question 151

Which of the following costs changes in total in direct proportion to a change in volume?

(Multiple Choice)

4.7/5

(82)

Question 152

Tanaka Company has fixed costs of $14,000.Their contribution margin ratio is 40% and ratio of selling expenses to sales is 20%.What is the breakeven point in sales dollars?

(Multiple Choice)

4.7/5

(85)

Question 153

A contribution margin income statement classifies costs by function; that is,costs are classified as either product costs or period costs.

(True/False)

5.0/5

(75)

Question 154

When the total fixed costs decreases,the contribution margin per unit ________.

(Multiple Choice)

4.7/5

(90)

Question 155

A(n)________ groups cost by behavior; that is,costs are classified as either variable costs or fixed costs.

(Multiple Choice)

4.9/5

(76)

Question 156

One of the assumptions of cost-volume-profit (CVP)analysis is that there are no changes in the ________.

(Multiple Choice)

4.9/5

(91)

Question 157

Torres Manufacturers produces flooring material.The monthly fixed costs are $10,000 per month.The unit selling price for the flooring is $95 and variable cost per unit is $35.If Torres' managers create a CVP graph from volume levels of zero to 500 units,at what sales level (in units)will the revenue and total cost lines intersect?

(Multiple Choice)

4.8/5

(79)

Question 158

Ito Company has provided the following information: Price per unit \ 48 Variable cost per unit 18 Fixed costs per month \ 20,000 What is the contribution margin ratio?

(Multiple Choice)

4.7/5

(79)

Question 159

Johar Company provides the following information about its product: Targeted operating income \ 65,000 Selling price per unit 12.00 Variable cost per unit 1.80 Total fixed costs 130,000 What is the contribution margin ratio?

(Multiple Choice)

4.8/5

(66)

Question 160

Showing 141 - 160 of 238

The Button-Down Custom Co.sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 30%.What is the variable cost per shirt?

If fixed costs go up,and all other factors remain the same,the margin of safety will become larger.

A cost-volume-profit (CVP)graph shows how changes in the level of sales will affect profits.

The dollar amount that provides for covering fixed costs and then provides for operating income is called ________.

Which of the following is a variable cost?

Indiana Hot Tubs,Inc.reports the following information for August: Sales Revenue \ 770,000 Variable Costs 220,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

Which of the following statements is true if the variable cost per unit increases while the sale price per unit and total fixed costs remain constant?

When there are no units in the beginning Finished Goods Inventory and the units produced are more than the units sold,the operating income will be higher under variable costing than absorption costing.

When all of the units produced are sold,the operating income is the same under both the absorption and variable costing methods.Assume no beginning and ending inventories.Which of the following gives the correct reason for the above statement?

Which of the following costs changes in total in direct proportion to a change in volume?

Tanaka Company has fixed costs of $14,000.Their contribution margin ratio is 40% and ratio of selling expenses to sales is 20%.What is the breakeven point in sales dollars?

A contribution margin income statement classifies costs by function; that is,costs are classified as either product costs or period costs.

When the total fixed costs decreases,the contribution margin per unit ________.

A(n)________ groups cost by behavior; that is,costs are classified as either variable costs or fixed costs.

One of the assumptions of cost-volume-profit (CVP)analysis is that there are no changes in the ________.

Ito Company has provided the following information: Price per unit \ 48 Variable cost per unit 18 Fixed costs per month \ 20,000 What is the contribution margin ratio?

Johar Company provides the following information about its product: Targeted operating income \ 65,000 Selling price per unit 12.00 Variable cost per unit 1.80 Total fixed costs 130,000 What is the contribution margin ratio?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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