Exam 21: Cost-Volume-Profit Analysis

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

For the next year,the Drenning Birch Company predicts the sale of 16,000 units of a product with a contribution margin of $7 per unit and 32,000 units of another product with a contribution margin of $10 per unit.The weighted-average contribution margin per unit is $9.

Period costs under the variable costing method include ________.

Crystal Pools,Inc.has provided the following information for the year. Units produced 13,000 units Sales price \ 200 per unit Direct materials \ 50 per unit Direct labor \ 45 per unit Variable manufacturing overhead \ 65 per unit Fixed manufacturing overhead \ 440,000 per year Variable selling and administration costs \ 60 per unit Fixed selling and administration costs \ 250,000 per year What is the unit product cost using absorption costing?

Hoppy Cat Toy Company has estimated the following amounts for its next fiscal year: Total fixed expenses \ 833,500 Sale price per unit 40 Variable expenses per unit 25 If the company spends an additional $34,000 on advertising,sales volume would increase by 2,900 units.What effect will this decision have on the operating income?

The degree of operating leverage can be measured by ________.

Silver Rex,Inc.has provided the following data for the year ended December 31,2017: Direct materials \ 10 per unit Direct labor \ 15 per unit Variable manufacturing overhead \ 20 per unit Fixed manufacturing overhead \ 25,000 per year Fixed selling and administrative costs \ 15,000 per year Sales price \ 75 per unit Beginning Finished Goods Inventory 500 units Units produced 5,000 units Units sold 4,500 units Requirements:

When the total variable costs are deducted from total mixed costs,we obtain ________.

The phone bill for Laurel Accounting consists of both fixed and variable costs.Refer to the four month data below and apply the high-low method to answer the question.(Round your calculation to two decimal places.) Minutes Total Bill May 480 \ 3,000 June 240 \ 2,675 July 160 \ 2,640 August 320 \ 2,880 What is the variable cost per minute?

When all the units produced are sold,the operating income calculated under absorption costing is higher when compared to the operating income calculated under variable costing.Assume that there is no beginning Finished Goods Inventory.

In its first year of business,Greenlam,Inc.produced 600 units and sold 400 units.If Greenlam uses variable costing,________.

Contribution margin is the amount that contributes to covering variable costs.

Contribution margin is the difference between net sales revenue and variable costs.

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

From the graph given below,identify the sales revenue line.

Total variable costs change in direct proportion to changes in the volume of production.

During the current year,Albee Company incurred $7,000 of fixed and $16,000 variable costs.If the number of units produced is halved next year,the company will incur $3,500 as fixed and $8,000 as variable costs.

Frittata,Inc.started the year with 200 units in the Finished Goods Inventory account.It produced 600 units during the year and sold 800 units.If Frittata uses variable costing,________.

Sensitivity analysis empowers managers with better information for decision making by analyzing how various business strategies will affect profits earned by the company.

Sensitivity analysis allows managers to see how various business strategies will affect profit levels.