Better Bonds Better Bonds provided the following data: $\begin{array}{lr} \text { Sales } & \$ 540,000 \\ \text { Variable costs } & \$ 378,000 \\ \text { Fixed costs } & \$ 120,000 \\ \text { Expected production and sales in units } & 40,000 \end{array}$ -Refer to Woods Company. What is the revised expected operating income for the coming year?

A) $62,400 B) $180,000 C) $222,000 D) $360,000 A) $62,400 B) $180,000 C) $222,000 D) $360,000

Better Bonds Better Bonds provided the following data: $\begin{array}{lr} \text { Sales } & \$ 540,000 \\ \text { Variable costs } & \$ 378,000 \\ \text { Fixed costs } & \$ 120,000 \\ \text { Expected production and sales in units } & 40,000 \end{array}$ -Refer to Plastic Gym. The company expects tree house demand to increase from 4,000 to 8,000 units per year. How many tree houses are sold at break-even using this new sales mix?

A) 668 B) 875 C) 1,002 D) 1,750 A) 668 B) 875 C) 1,002 D) 1,750

The income statement for Thompson Manufacturing Company is as follows: $\begin{array}{lr} \text { Sales }(10,000 \text { units) } & \$ 150,000 \\ \text { Variable costs } & 102,000 \\ \text { Contribution margin } & \$ 48,000 \\ \text { Fixed costs } & 36,000\\ \text { Operating income }&\$12,000 \end{array}$ What is the contribution margin per unit?

A) $1.20 B) $4.80 C) $7.20 D) $120,000.00 A) $1.20 B) $4.80 C) $7.20 D) $120,000.00

Better Bonds Better Bonds provided the following data: $\begin{array}{lr} \text { Sales } & \$ 540,000 \\ \text { Variable costs } & \$ 378,000 \\ \text { Fixed costs } & \$ 120,000 \\ \text { Expected production and sales in units } & 40,000 \end{array}$ -Refer to ePiano. How many practice models are sold at break-even?

A) 180 B) 220 C) 440 D) 1,320 A) 180 B) 220 C) 440 D) 1,320

Exam 4: Cost-Volume-Profit Analysis: a Managerial Planning Tool

In the equation to determine the number of units that must be sold to earn a target income, targeted income is added to fixed cost in the denominator.

Free

(True/False)

4.8/5

(64)

Question 1

Correct Answer:

Verified

False

Refer to Books and Things. What is the contribution margin per unit?

Free

(Multiple Choice)

4.9/5

(73)

Question 2

Correct Answer:

Verified

What would be the effect on the break-even point if sales remain the same and the margin of safety increases?

Free

(Multiple Choice)

4.9/5

(75)

Question 3

Correct Answer:

Verified

Match each following terms with their correct description from the items listed below. -Measured in units sold

(Multiple Choice)

4.9/5

(79)

Question 4

If a multi-product company simply wants to know the overall break-even point and is willing to assume its product mix stays constant, it is easiest to use the break-even point in dollar sales revenue approach.

(True/False)

4.9/5

(81)

Question 5

Refer to Books and Things. What is the contribution margin ratio?

(Multiple Choice)

4.8/5

(75)

Question 6

What is the result when the contribution margin ratio increases?

(Multiple Choice)

4.8/5

(75)

Question 7

What measures the percentage change in profits resulting from a percentage change in sales?

(Multiple Choice)

4.8/5

(71)

Question 8

Wendall Company sells only one product at a regular sales price of $7.50 per unit. At that sales price, variable costs are 60% of sales, and fixed costs are $30,000. Management has decided to decrease the sales price to $6 in hopes of increasing its volume of sales. What is the contribution margin ratio when the sales price is reduced to $6 per unit?

(Multiple Choice)

4.7/5

(69)

Question 9

Match each following terms with their correct description from the items listed below. -Break-even point

(Multiple Choice)

4.9/5

(80)

Question 10

Direct fixed expenses are the fixed costs that are traceable to the segments and would remain even if one of the segments was eliminated.

(True/False)

4.9/5

(79)

Question 11

Better Bonds Better Bonds provided the following data: Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to Woods Company. What is the revised expected operating income for the coming year?

(Multiple Choice)

4.9/5

(81)

Question 12

Dollmaker manufactures dolls. The sales price of a doll is $15, and the variable cost is $7 per doll. What is the contribution margin ratio?

(Multiple Choice)

4.9/5

(74)

Question 13

Better Bonds Better Bonds provided the following data: Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to Plastic Gym. The company expects tree house demand to increase from 4,000 to 8,000 units per year. How many tree houses are sold at break-even using this new sales mix?

(Multiple Choice)

4.7/5

(85)

Question 14

Orbee Company sells a product for $24. Variable costs are $14 per unit, and total fixed costs are $6,000. What is the per unit contribution margin?

(Multiple Choice)

4.9/5

(75)

Question 15

To determine the number of units that must be sold to earn a target operating income, one can use the equation for operating income and replace the operating income term with the target operating income.

(True/False)

4.8/5

(82)

Question 16

The income statement for Thompson Manufacturing Company is as follows: Sales (10,000 units) \ 150,000 Variable costs 102,000 Contribution margin \ 48,000 Fixed costs 36,000 Operating income \1 2,000 What is the contribution margin per unit?

(Multiple Choice)

4.8/5

(68)

Question 17

Match each following terms with their correct description from the items listed below. -The use of fixed costs to extract higher percentage changes in profits as sales activity changes

(Multiple Choice)

4.8/5

(79)

Question 18

Better Bonds Better Bonds provided the following data: Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to ePiano. How many practice models are sold at break-even?

(Multiple Choice)

4.9/5

(72)

Question 19

Suppose the contribution margin ratio increases. What will be the effect on the break-even point in sales dollars?

(Multiple Choice)

4.8/5

(77)

Question 20

Showing 1 - 20 of 154

In the equation to determine the number of units that must be sold to earn a target income, targeted income is added to fixed cost in the denominator.

Refer to Books and Things. What is the contribution margin per unit?

What would be the effect on the break-even point if sales remain the same and the margin of safety increases?

Match each following terms with their correct description from the items listed below. -Measured in units sold

If a multi-product company simply wants to know the overall break-even point and is willing to assume its product mix stays constant, it is easiest to use the break-even point in dollar sales revenue approach.

Refer to Books and Things. What is the contribution margin ratio?

What is the result when the contribution margin ratio increases?

What measures the percentage change in profits resulting from a percentage change in sales?

Match each following terms with their correct description from the items listed below. -Break-even point

Direct fixed expenses are the fixed costs that are traceable to the segments and would remain even if one of the segments was eliminated.

Better Bonds Better Bonds provided the following data: Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to Woods Company. What is the revised expected operating income for the coming year?

Dollmaker manufactures dolls. The sales price of a doll is $15, and the variable cost is $7 per doll. What is the contribution margin ratio?

Orbee Company sells a product for $24. Variable costs are $14 per unit, and total fixed costs are $6,000. What is the per unit contribution margin?

To determine the number of units that must be sold to earn a target operating income, one can use the equation for operating income and replace the operating income term with the target operating income.

The income statement for Thompson Manufacturing Company is as follows: Sales (10,000 units) \ 150,000 Variable costs 102,000 Contribution margin \ 48,000 Fixed costs 36,000 Operating income \1 2,000 What is the contribution margin per unit?

Match each following terms with their correct description from the items listed below. -The use of fixed costs to extract higher percentage changes in profits as sales activity changes

Better Bonds Better Bonds provided the following data: Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to ePiano. How many practice models are sold at break-even?

Suppose the contribution margin ratio increases. What will be the effect on the break-even point in sales dollars?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

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