Exam 21: Cost-Volume-Profit Analysis

The amount by which sales can decrease before the company incurs an operating loss is called the breakeven point.

A company that sells multiple products will always set sales prices such that all products have the same contribution margin.

Which of the following will appear as a line item in the traditional format of an income statement?

When the total fixed costs decrease,the breakeven point ________.

Mackenzie,Inc.has collected the following data.(There are no beginning inventories.) Units produced 600 units Sales price \ 120 per unit Direct materials \ 20 per unit Direct labor \ 12 per unit Variable manufacturing overhead \ 6 per unit Fixed manufacturing overhead \ 17,400 per year Variable selling and administrative costs \ 5 per unit Fixed selling and administrative costs \ 13,700 per year What is the ending balance in Finished Goods Inventory using absorption costing if 550 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Carrabelle Company has provided the following information: Sales price per unit \ 56 Variable cost per unit 12 Fixed costs per month \ 12,000 Calculate the contribution margin ratio.(Round your answer to two decimal places.)

In variable costing,fixed manufacturing overhead is considered a period cost because ________.

Asher Company sells two products-X and Y.Product X is sold for $30 per unit and has a variable cost per unit of $15.Product Y is sold for $30 per unit and has a variable cost of $10 per unit.Total fixed costs for the company are $20,000.Asher Company typically sells three units of Product X for every unit of Product Y.What is the breakeven point in total units? (Round any intermediate calculations to two decimal places,and your answer to the nearest unit.)

Last year,Adara Company produced 7000 units and sold 5000 units.The company had no beginning inventory.They incurred the following costs: Direct materials per unit \ 15 Direct labor per unit \ 6 Variable overhead per unit \ 3 Total fixed manufacturing pverhead \ 28,000 Total selling and administrative \ 75,000 Adara's product cost per unit under variable costing is

Which of the following formulas is the right formula for calculating contribution margin ratio?

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

The fixed manufacturing overhead is considered a product cost in variable costing and a period cost in absorption costing.

Resolute Company sells two generators-Model A and Model B-for $456 per unit and $394 per unit,respectively.The variable cost of Model A is $406 per unit and of Model B is $304 per unit.The company will generate lower revenues but a higher net income if it sells more of Model B than Model A.

Higher fixed costs decrease the total contribution margin required to break even.

In the graph below,the area between the lines AC and OB to the right of point E represents ________.