Question 1

Companies with large amounts of fixed costs will generally have a high operating leverage.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following conditions would cause the break-even point to decrease?

Accepted Answer

A)  total fixed costs increase 
B)  unit selling price decreases 
C)  unit variable cost decreases 
D)  unit variable cost increases 
A)  total fixed costs increase 
B)  unit selling price decreases 
C)  unit variable cost decreases 
D)  unit variable cost increases

Question 3

Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17.What amount of units must be sold in order to realize an operating income of $100,000?

Accepted Answer

A)  5,000 
B)  41,176 
C)  47,059 
D)  58,882 
A)  5,000 
B)  41,176 
C)  47,059 
D)  58,882

Question 4

If sales are $400,000,variable costs are 80% of sales,and operating income is $40,000,what is the operating leverage?

Accepted Answer

A)  0.0 
B)  7.5 
C)  2.0 
D)  1.3 
A)  0.0 
B)  7.5 
C)  2.0 
D)  1.3

Question 5

The manufacturing cost of Mocha Industries for three months of the year are provided below:
​
   Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed costs.

Accepted Answer

(a)($100,900 - $63,100) / (2,6

Question 6

Silver River Company sells Products S and T and has made the following estimates for the coming year:
​
   Fixed costs are estimated at $202,400.Determine (a)the estimated sales in units of the overall product necessary to reach the break-even point for the coming year,(b)the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year,and (c)the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year.

Accepted Answer

The answer of Silver River Company sells Products S and...

Question 7

Currently,the unit selling price is $50,the variable cost,$34,and the total fixed costs,$108,000.A proposal is being evaluated to increase the selling price to $54.

Accepted Answer

The answer of Currently,the unit selling price is $50,the variable...

Question 8

Bobby Company has fixed costs of $160,000.The unit selling price,variable cost per unit,and contribution margin per unit for the company's two products are provided below.
​
   The sales mix for product X and Y is 60% and 40%,respectively.Determine the break-even point in units of X and Y.

Accepted Answer

Unit contribution margin of sa

Question 9

If sales total $2,000,000,fixed costs total $800,000,and variable costs are 60% of sales,the contribution margin ratio is 40%.

Accepted Answer

A) True 
 B)False

Question 10

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 11

What was Carter Co.'s unit selling price of E,with E representing one overall "enterprise" product?

Accepted Answer

A)  $200 
B)  $100 
C)  $80 
D)  $88 
A)  $200 
B)  $100 
C)  $80 
D)  $88

Question 12

When a business sells more than one product at varying selling prices,the business's break-even point can be determined as long as the number of products does not exceed

Accepted Answer

A)  two 
B)  three 
C)  fifteen 
D)  there is no limit 
A)  two 
B)  three 
C)  fifteen 
D)  there is no limit

Question 13

Gladstorm Enterprises sells a product for $60 per unit.The variable cost is $20 per unit,while fixed costs are $85,000.Determine the (a)break-even point in sales units,and (b)break-even point in sales units if the selling price increased to $80 per unit.Round your answer to the nearest whole number.

Accepted Answer

a.SP $60 - VC $20 = CM $40 $85

Question 14

The Dean Company has sales of $500,000,and the break-even point in sales dollars of $300,000.Determine the company's margin of safety percentage.

Accepted Answer

40% ($500,

Question 15

Total variable costs change as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 16

What would Timmer's net income be for the year using absorption costing?

Accepted Answer

A)  $114,000 
B)  $110,000 
C)  $4,000 
D)  $106,000 
A)  $114,000 
B)  $110,000 
C)  $4,000 
D)  $106,000

Question 17

A low operating leverage is normal for highly automated industries.

Accepted Answer

A) True 
 B)False

Question 18

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Accepted Answer

A) True 
 B)False

Question 19

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Accepted Answer

A) True 
 B)False

Question 20

Connor Company's fixed costs are $400,000,the unit selling price is $25,and the unit variable costs are $15.What is the break-even sales (units)if the variable costs are increased by $2?

Accepted Answer

A)  50,000 units 
B)  30,770 units 
C)  40,000 units 
D)  26,667 units 
A)  50,000 units 
B)  30,770 units 
C)  40,000 units 
D)  26,667 units

Exam 19: Cost-Volume-Profit Analysis

Companies with large amounts of fixed costs will generally have a high operating leverage.

Which of the following conditions would cause the break-even point to decrease?

Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17.What amount of units must be sold in order to realize an operating income of $100,000?

If sales are $400,000,variable costs are 80% of sales,and operating income is $40,000,what is the operating leverage?

The manufacturing cost of Mocha Industries for three months of the year are provided below: ​ Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed costs.

Currently,the unit selling price is $50,the variable cost,$34,and the total fixed costs,$108,000.A proposal is being evaluated to increase the selling price to $54.

Bobby Company has fixed costs of $160,000.The unit selling price,variable cost per unit,and contribution margin per unit for the company's two products are provided below. ​ The sales mix for product X and Y is 60% and 40%,respectively.Determine the break-even point in units of X and Y.

If sales total $2,000,000,fixed costs total $800,000,and variable costs are 60% of sales,the contribution margin ratio is 40%.

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

What was Carter Co.'s unit selling price of E,with E representing one overall "enterprise" product?

When a business sells more than one product at varying selling prices,the business's break-even point can be determined as long as the number of products does not exceed

The Dean Company has sales of $500,000,and the break-even point in sales dollars of $300,000.Determine the company's margin of safety percentage.

Total variable costs change as the level of activity changes.

What would Timmer's net income be for the year using absorption costing?

A low operating leverage is normal for highly automated industries.

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Connor Company's fixed costs are $400,000,the unit selling price is $25,and the unit variable costs are $15.What is the break-even sales (units)if the variable costs are increased by $2?

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

The manufacturing cost of Mocha Industries for three months of the year are provided below: Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed costs.

Bobby Company has fixed costs of $160,000.The unit selling price,variable cost per unit,and contribution margin per unit for the company's two products are provided below. The sales mix for product X and Y is 60% and 40%,respectively.Determine the break-even point in units of X and Y.