Question 1

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 2

Copper Hill Inc.manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year.The following partially completed manufacturing cost schedule has been prepared:
​
   ​
Complete the preceding cost schedule,identifying each cost by the appropriate letter (a)through (o).

Accepted Answer

The answer of Copper Hill Inc.manufactures laser printers within a...

Question 3

For the past year,Pedi Company had fixed costs of $70,000,unit variable costs of $32,and a unit selling price of $40.For the coming year,no changes are expected in revenues and costs,except that property taxes are expected to increase by $10,000.Determine the break-even sales (units)for (a)the past year and (b)the coming year.

Accepted Answer

The answer of For the past year,Pedi Company had fixed...

Question 4

Absorption costing is required for financial reporting under generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 5

In cost-volume-profit analysis,all costs are classified into the following two categories:

Accepted Answer

A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs 
A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs

Question 6

Reynold's Grocery has fixed costs of $350,000,the unit selling price is $29,and the unit variable costs are $20.What is the break-even sales (units)if the variable costs are decreased by $4?

Accepted Answer

A)  26,923 units 
B)  12,069 units 
C)  21,875 units 
D)  38,889 units 
A)  26,923 units 
B)  12,069 units 
C)  21,875 units 
D)  38,889 units

Question 7

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

Accepted Answer

A) True 
 B)False

Question 8

If sales total $2,000,000,fixed costs total $800,000,and variable costs are 60% of sales,the contribution margin ratio is 60%.

Accepted Answer

A) True 
 B)False

Question 9

Even if a business sells six products,it is possible to estimate the break-even point.

Accepted Answer

A) True 
 B)False

Question 10

Given the following information:
​
Variable cost per unit = $5.00
July fixed cost per unit = $7.00
Units sold and produced in July = 28,000
​
What is total estimated cost for August if 30,000 units are projected to be produced and sold?

Accepted Answer

Total fixed costs = $7.00 × 28

Question 11

Costs that remain constant in total dollar amount as the level of activity changes are called

Accepted Answer

A)  fixed costs 
B)  mixed costs 
C)  product costs 
D)  variable costs 
A)  fixed costs 
B)  mixed costs 
C)  product costs 
D)  variable costs

Question 12

What was Rusty Co.'s weighted average unit selling price?

Accepted Answer

A)  $180.00 
B)  $75.00 
C)  $100.00 
D)  $110.00 
A)  $180.00 
B)  $75.00 
C)  $100.00 
D)  $110.00

Question 13

In a cost-volume-profit chart,the

Accepted Answer

A)  total cost line begins at zero 
B)  slope of the total cost line is dependent on the fixed cost per unit 
C)  total cost line begins at the total fixed cost value on the vertical axis 
D)  total cost line normally ends at the highest sales value 
A)  total cost line begins at zero 
B)  slope of the total cost line is dependent on the fixed cost per unit 
C)  total cost line begins at the total fixed cost value on the vertical axis 
D)  total cost line normally ends at the highest sales value

Question 14

Define operating leverage.Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.

Accepted Answer

Operating leverage is the relationship b

Question 15

If employees accept a wage contract that increases the unit contribution margin,the break-even point will decrease.

Accepted Answer

A) True 
 B)False

Question 16

Because variable costs are assumed to change in direct proportion to changes in the activity level,the graph of the variable costs when plotted against the activity level appears as a circle.

Accepted Answer

A) True 
 B)False

Question 17

Spice Inc.'s unit selling price is $60,the unit variable costs are $35,fixed costs are $125,000,and current sales are 10,000 units.How much will operating income change if sales increase by 8,000 units?

Accepted Answer

A)  $150,000 decrease 
B)  $175,000 increase 
C)  $200,000 increase 
D)  $150,000 increase 
A)  $150,000 decrease 
B)  $175,000 increase 
C)  $200,000 increase 
D)  $150,000 increase

Question 18

Given the following:
​
Variable cost as a percentage of sales = 60%
Unit variable cost = $30
Fixed costs = $200,000
​
What is the break-even point in units?

Accepted Answer

$30 / 60% = $50 selling price

Question 19

Safari Co.sells two products,Orks and Zins.Last year,Safari sold 21,000 units of Orks and 14,000 units of Zins.Related data are
​
   ​
Calculate the following: 
a.Safari Co.'s sales mix
b.Safari Co.'s unit selling price of E?
c.Safari Co.'s unit contribution margin of E?
d.Safari Co.'s break-even point assuming that last year's fixed costs were $160,000.

Accepted Answer

a.Orks:21,000 / (21,000 + 14,000)= 60% Z

Question 20

The Klein Company reports the following data:
​
​
   Determine Klein Company's operating leverage.Round your answer to two decimal places.

Accepted Answer

($980,000 - $500,000

Exam 19: Cost-Volume-Profit Analysis

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Absorption costing is required for financial reporting under generally accepted accounting principles.

In cost-volume-profit analysis,all costs are classified into the following two categories:

Reynold's Grocery has fixed costs of $350,000,the unit selling price is $29,and the unit variable costs are $20.What is the break-even sales (units)if the variable costs are decreased by $4?

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

If sales total $2,000,000,fixed costs total $800,000,and variable costs are 60% of sales,the contribution margin ratio is 60%.

Even if a business sells six products,it is possible to estimate the break-even point.

Given the following information: ​ Variable cost per unit = $5.00 July fixed cost per unit = $7.00 Units sold and produced in July = 28,000 ​ What is total estimated cost for August if 30,000 units are projected to be produced and sold?

Costs that remain constant in total dollar amount as the level of activity changes are called

What was Rusty Co.'s weighted average unit selling price?

In a cost-volume-profit chart,the

Define operating leverage.Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.

If employees accept a wage contract that increases the unit contribution margin,the break-even point will decrease.

Because variable costs are assumed to change in direct proportion to changes in the activity level,the graph of the variable costs when plotted against the activity level appears as a circle.

Spice Inc.'s unit selling price is $60,the unit variable costs are $35,fixed costs are $125,000,and current sales are 10,000 units.How much will operating income change if sales increase by 8,000 units?

Given the following: ​ Variable cost as a percentage of sales = 60% Unit variable cost = $30 Fixed costs = $200,000 ​ What is the break-even point in units?

The Klein Company reports the following data: ​ ​ Determine Klein Company's operating leverage.Round your answer to two decimal places.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Given the following information: Variable cost per unit = $5.00 July fixed cost per unit = $7.00 Units sold and produced in July = 28,000 What is total estimated cost for August if 30,000 units are projected to be produced and sold?

Given the following: Variable cost as a percentage of sales = 60% Unit variable cost = $30 Fixed costs = $200,000 What is the break-even point in units?

The Klein Company reports the following data: Determine Klein Company's operating leverage.Round your answer to two decimal places.