Date Company Date Company makes calendars. Information on cost per unit is as follows: \[\begin{array} { l l } \text { Direct materials } & \$ 1.50 \\ \text { Direct labour } & \$ 1.20 \\ \text { Variable overhead } & \$ 0.90 \\ \text { Variable marketing expense } & \$ 0.40 \end{array}\] Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the variable product expense per unit?

A) $1.30 B) $3.60 C) $4.00 D) $4.60 A) $1.30 B) $3.60 C) $4.00 D) $4.60

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. What is the unit sales mix of jungle gyms and tree houses? (rounded down to whole numbers)

A) 2:3 B) 3:1 C) 3:2 D) 4:1 A) 2:3 B) 3:1 C) 3:2 D) 4:1

Date Company Date Company makes calendars. Information on cost per unit is as follows: \[\begin{array} { l l } \text { Direct materials } & \$ 1.50 \\ \text { Direct labour } & \$ 1.20 \\ \text { Variable overhead } & \$ 0.90 \\ \text { Variable marketing expense } & \$ 0.40 \end{array}\] Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the contribution margin per unit?

A) $5.00 B) $5.40 C) $6.00 D) $6.30 A) $5.00 B) $5.40 C) $6.00 D) $6.30

The HandyTool Manufacturing Company produces the following three products: $\begin{array}{lccc}&\text { Hammers}&\text { Screw drivers}&\text { Saws }\\ \text { Selling sales price per unit } & \$ 40 & \$ 16 & \$ 50 \\ \text { Variable costs per unit } & \underline{28} & 12 & 30 \\ \text { Contribution per unit } & \$ 12 & \$ 4 & \$ 20 \end{array}$ Fixed costs are $76,000 per year. Of all units sold, 50% are hammers, 30% are screwdrivers, and 20% are saws. Required: Calculate the following values: A. Break-even point in units B. Number of hammers that will be sold at break-even C. Total sales in units to obtain a before-tax profit of $19,000

A. Average CM/unit = ($12 × 0.5) + ($4 ×

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 Better Bonds. How many sales in dollars are needed to generate a profit of $30,000?

A) $100,000 B) $150,000 C) $214,286 D) $500,000 A) $100,000 B) $150,000 C) $214,286 D) $500,000

Date Company Date Company makes calendars. Information on cost per unit is as follows: \[\begin{array} { l l } \text { Direct materials } & \$ 1.50 \\ \text { Direct labour } & \$ 1.20 \\ \text { Variable overhead } & \$ 0.90 \\ \text { Variable marketing expense } & \$ 0.40 \end{array}\] Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the variable cost per unit?

A) $1.30 B) $3.70 C) $4.00 D) $4.60 A) $1.30 B) $3.70 C) $4.00 D) $4.60

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 jungle gyms are sold at break-even using this new sales mix?

A) 668 B) 875 C) 1,002 D) 2,625 A) 668 B) 875 C) 1,002 D) 2,625

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

Date Company Date Company makes calendars. Information on cost per unit is as follows: Direct materials \ 1.50 Direct labour \ 1.20 Variable overhead \ 0.90 Variable marketing expense \ 0.40 Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the variable product expense per unit?

(Multiple Choice)

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Question 101

What is the purpose of doing a cost-volume-profit (CVP) analysis?

(Multiple Choice)

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Question 102

Managers can use cost-volume-profit analysis to help handle risk and uncertainty.

(True/False)

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Question 103

TriTech Company sells a product for $12. Variable costs are $6 per unit, and total fixed costs are $6,000. How many units must Melody sell to earn an operating profit of $240?

(Multiple Choice)

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(81)

Question 104

The cost-volume-profit graph shows the relationship between cost, volume, and operating income.

(True/False)

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Question 105

Operating leverage is the use of variable cost to extract higher percentage changes in profits as sales activity changes.

(True/False)

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Question 106

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. What is the unit sales mix of jungle gyms and tree houses? (rounded down to whole numbers)

(Multiple Choice)

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Question 107

Which type of ratio reflects total contribution margin divided by sales revenue?

(Multiple Choice)

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Question 108

Campbell Corporation developed the following income statement using a contribution margin approach: Campbell Corporation Projected Income Statement For the Current Year Ending December 31 Sales \7 50,000 Less variable costs: Variable manufacturing costs \ 280,000 Variable selling costs 120,000 Total variable costs \ 400,000 Contribution margin \ 350,000 Less fixed costs: Fixed manufacturing costs \ 130,000 Fixed selling and administrative 80,000 costs Total fixed costs \2 10,000 Operating income \1 40,000 The projected income statement was based on sales of 100,000 units. Thomas has the capacity to produce 120,000 units during the year. A. Determine the break-even point in units. B. The sales manager believes the company could increase sales by 8,000 units if advertising expenditures were increased by $22,000. By how much will income increase or decrease if this plan is put into effect? C. What is the maximum amount the company could pay for advertising if the sales would really increase by 8,000 units?

(Essay)

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Question 109

Bonda, Inc. sells its product for $90. It has a variable cost ratio of 50% and total fixed costs of $14,000. What is the break-even point in sales dollars?

(Multiple Choice)

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Question 110

Date Company Date Company makes calendars. Information on cost per unit is as follows: Direct materials \ 1.50 Direct labour \ 1.20 Variable overhead \ 0.90 Variable marketing expense \ 0.40 Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the contribution margin per unit?

(Multiple Choice)

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(74)

Question 111

Match each following terms with their correct description from the items listed below. -Sales revenue minus total variable cost or sales price minus unit variable cost

(Multiple Choice)

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Question 112

The HandyTool Manufacturing Company produces the following three products: Hammers Screw drivers Saws Selling sales price per unit \ 40 \ 16 \ 50 Variable costs per unit 12 30 Contribution per unit \ 12 \ 4 \ 20 Fixed costs are $76,000 per year. Of all units sold, 50% are hammers, 30% are screwdrivers, and 20% are saws. Required: Calculate the following values: A. Break-even point in units B. Number of hammers that will be sold at break-even C. Total sales in units to obtain a before-tax profit of $19,000

(Essay)

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(87)

Question 113

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 Better Bonds. How many sales in dollars are needed to generate a profit of $30,000?

(Multiple Choice)

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Question 114

Which statement describes a characteristic of the cost-volume-profit graph?

(Multiple Choice)

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Question 115

Ashley Furniture provided the following data for next month: Selling sales price per unit $500 Variable manufacturing costs per unit $150 Fixed manufacturing costs per unit $ 75 Variable selling costs per unit $ 50 Fixed selling costs per unit $ 50 Expected production and sales 2,000 units A. Calculate contribution margin per unit. B. Calculate the contribution margin ratio. C. Calculate the break-even point in units. D. Calculate the sales in dollars needed to obtain on operating income of $20,000.

(Essay)

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Question 116

The cost-volume-profit graph depicts the relationships among cost, volume, and profits by plotting the total revenue line and the total cost line on the graph.

(True/False)

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Question 117

Date Company Date Company makes calendars. Information on cost per unit is as follows: Direct materials \ 1.50 Direct labour \ 1.20 Variable overhead \ 0.90 Variable marketing expense \ 0.40 Fixed marketing expense totalled $13,000, and fixed administrative expense totalled $35,000. The sales price per calendar is $10. -Refer to Date Company. What is the variable cost per unit?

(Multiple Choice)

4.8/5

(70)

Question 118

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 jungle gyms are sold at break-even using this new sales mix?

(Multiple Choice)

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(77)

Question 119

Refer to Books and Things. What is the variable cost ratio?

(Multiple Choice)

4.8/5

(72)

Question 120

What is the purpose of doing a cost-volume-profit (CVP) analysis?

Managers can use cost-volume-profit analysis to help handle risk and uncertainty.

TriTech Company sells a product for $12. Variable costs are $6 per unit, and total fixed costs are $6,000. How many units must Melody sell to earn an operating profit of $240?

The cost-volume-profit graph shows the relationship between cost, volume, and operating income.

Operating leverage is the use of variable cost 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 Plastic Gym. What is the unit sales mix of jungle gyms and tree houses? (rounded down to whole numbers)

Which type of ratio reflects total contribution margin divided by sales revenue?

Bonda, Inc. sells its product for $90. It has a variable cost ratio of 50% and total fixed costs of $14,000. What is the break-even point in sales dollars?

Match each following terms with their correct description from the items listed below. -Sales revenue minus total variable cost or sales price minus unit variable cost

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 Better Bonds. How many sales in dollars are needed to generate a profit of $30,000?

Which statement describes a characteristic of the cost-volume-profit graph?

The cost-volume-profit graph depicts the relationships among cost, volume, and profits by plotting the total revenue line and the total cost line on the graph.

Refer to Books and Things. What is the variable cost ratio?

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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