Question 1

The contribution margin ratio is

Accepted Answer

A)  the same as the variable cost ratio 
B)  the same as profit 
C)  the portion of equity contributed by the stockholders 
D)  the same as the profit-volume ratio 
A)  the same as the variable cost ratio 
B)  the same as profit 
C)  the portion of equity contributed by the stockholders 
D)  the same as the profit-volume ratio

Question 2

Given the following cost data,what type of cost is shown? ​
​
  ​

Accepted Answer

A)  mixed cost 
B)  variable cost 
C)  fixed cost 
D)  period cost 
A)  mixed cost 
B)  variable cost 
C)  fixed cost 
D)  period cost

Question 3

If direct materials cost per unit decreases,the amount of sales necessary to earn a desired amount of profit will decrease.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following describes the behavior of a variable cost per unit?

Accepted Answer

A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level 
A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level

Question 5

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 45.8%.

Accepted Answer

A) True 
 B)False

Question 6

As production increases,the fixed cost per unit

Accepted Answer

A)  increases 
B)  decreases 
C)  remains the same 
D)  either increases or decreases,depending on the variable costs 
A)  increases 
B)  decreases 
C)  remains the same 
D)  either increases or decreases,depending on the variable costs

Question 7

Steven 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 selling price of sales mix = $148 (

Question 8

The relevant activity base for a cost depends upon which base is most closely associated with the cost and the decision-making needs of management.

Accepted Answer

A) True 
 B)False

Question 9

Perfect Stampers makes and sells aftermarket hub caps.The variable cost for each hub cap is $4.75 and the hub cap sells for $9.95.Perfect Stampers has fixed costs per month of $3,120.Compute the contribution margin per unit and break-even sales in units and in dollars for the month.

Accepted Answer

Contribution margin: $9.95 sel

Question 10

A low operating leverage is normal for highly automated industries.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true regarding fixed and variable costs?

Accepted Answer

A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total,and variable costs are constant per unit. 
D)  Variable costs are constant in total,and fixed costs vary in total. 
A)  Both costs are constant when considered on a per-unit basis. 
B)  Both costs are constant when considered on a total basis. 
C)  Fixed costs are constant in total,and variable costs are constant per unit. 
D)  Variable costs are constant in total,and fixed costs vary in total.

Question 14

What was Carter Co.'s sales mix last year?

Accepted Answer

A)  20% Arks,80% Bins 
B)  12% Arks,28% Bins 
C)  70% Arks,30% Bins 
D)  40% Arks,20% Bins 
A)  20% Arks,80% Bins 
B)  12% Arks,28% Bins 
C)  70% Arks,30% Bins 
D)  40% Arks,20% Bins

Question 15

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 16

The Grant Company has sales of $300,000,and the break-even point in sales dollars if $225,000.Determine the company's margin of safety percentage.

Accepted Answer

25% ($300,

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Flying Cloud Co.has the following operating data for its manufacturing operations: ​
  The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant,the next break-even point for Flying Cloud Co.will be

Accepted Answer

A)  increased by 640 units 
B)  increased by 400 units 
C)  decreased by 640 units 
D)  increased by 800 units 
A)  increased by 640 units 
B)  increased by 400 units 
C)  decreased by 640 units 
D)  increased by 800 units

Question 19

If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units)if the variable costs are decreased by $2?

Accepted Answer

A)  2,127 
B)  1,114 
C)  2,340 
D)  1,950 
A)  2,127 
B)  1,114 
C)  2,340 
D)  1,950

Question 20

Assuming that last year's fixed costs totaled $960,000,what was Carter Co.'s break-even point in units?

Accepted Answer

A)  40,000 units 
B)  12,000 units 
C)  35,000 units 
D)  28,000 units 
A)  40,000 units 
B)  12,000 units 
C)  35,000 units 
D)  28,000 units

Exam 19: Cost-Volume-Profit Analysis

The contribution margin ratio is

Given the following cost data,what type of cost is shown? ​ ​ ​

If direct materials cost per unit decreases,the amount of sales necessary to earn a desired amount of profit will decrease.

Which of the following describes the behavior of a variable cost per unit?

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 45.8%.

As production increases,the fixed cost per unit

Steven 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.

The relevant activity base for a cost depends upon which base is most closely associated with the cost and the decision-making needs of management.

Perfect Stampers makes and sells aftermarket hub caps.The variable cost for each hub cap is $4.75 and the hub cap sells for $9.95.Perfect Stampers has fixed costs per month of $3,120.Compute the contribution margin per unit and break-even sales in units and in dollars for the month.

A low operating leverage is normal for highly automated industries.

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.

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Which of the following statements is true regarding fixed and variable costs?

What was Carter Co.'s sales mix last year?

The Grant Company has sales of $300,000,and the break-even point in sales dollars if $225,000.Determine the company's margin of safety percentage.

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

If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units)if the variable costs are decreased by $2?

Assuming that last year's fixed costs totaled $960,000,what was Carter Co.'s break-even point in units?

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 cost data,what type of cost is shown?

Steven 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.