Question 1

A company has a margin of safety of 25%,a contribution margin ratio of 30%,and sales of $1,000,000.

Accepted Answer

The answer of A company has a margin of safety...

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

If the contribution margin ratio for France Company is 45%,sales were $425,000,and fixed costs were $100,000,what was the income from operations?

Accepted Answer

A)  $233,750 
B)  $91,250 
C)  $191,250 
D)  $133,750 
A)  $233,750 
B)  $91,250 
C)  $191,250 
D)  $133,750

Question 4

A firm operated at 80% of capacity for the past year,during which fixed costs were $330,000,variable costs were 70% of sales,and sales were $1,000,000.Operating profit (loss)was

Accepted Answer

A)  $140,000 
B)  $(30,000) 
C)  $370,000 
D)  $670,000 
A)  $140,000 
B)  $(30,000) 
C)  $370,000 
D)  $670,000

Question 5

Understanding how costs behave is useful to management for all the following reasons except

Accepted Answer

A)  predicting customer demand 
B)  predicting profits as sales and production volumes change 
C)  estimating costs 
D)  changing an existing product production 
A)  predicting customer demand 
B)  predicting profits as sales and production volumes change 
C)  estimating costs 
D)  changing an existing product production

Question 6

Cost behavior refers to the manner in which

Accepted Answer

A)  a cost changes as the related activity changes 
B)  a cost is allocated to products 
C)  a cost is used in setting selling prices 
D)  a cost is estimated 
A)  a cost changes as the related activity changes 
B)  a cost is allocated to products 
C)  a cost is used in setting selling prices 
D)  a cost is estimated

Question 7

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit,and fixed costs are $270,000.
​
Determine the (a)unit sales price,and (b)break-even points in sales units if the company desires a target profit of $36,000.

Accepted Answer

a.$270,000 / ($X - $

Question 8

If the property tax rates are increased,this change in fixed costs will result in a decrease in the break-even point.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Accepted Answer

A)  electricity per KWH to operate factory equipment 
B)  direct materials cost 
C)  straight-line depreciation on factory equipment 
D)  wages of assembly worker 
A)  electricity per KWH to operate factory equipment 
B)  direct materials cost 
C)  straight-line depreciation on factory equipment 
D)  wages of assembly worker

Question 10

Mia Enterprises sells a product for $90 per unit.The variable cost is $40 per unit,while fixed costs are $75,000.Determine the (a)break-even point in sales units,and (b)break-even point in sales units if the selling price increased to $100 per unit.

Accepted Answer

a.SP $90 - VC $40 = CM $50 per

Question 11

If the contribution margin ratio for France Company is 45%,sales were $425,000,and fixed costs were $100,000,what was the income from operations?

Accepted Answer

A)  $233,750 
B)  $91,250 
C)  $191,250 
D)  $133,750 
A)  $233,750 
B)  $91,250 
C)  $191,250 
D)  $133,750

Question 12

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

Accepted Answer

A) True 
 B)False

Question 13

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

Question 14

If a business sells four products,it is not possible to estimate the break-even point.

Accepted Answer

A) True 
 B)False

Question 15

The three most common cost behavior classifications are

Accepted Answer

A)  variable costs,product costs,and sunk costs 
B)  fixed costs,variable costs,and mixed costs 
C)  variable costs,period costs,and differential costs 
D)  variable costs,sunk costs,and opportunity costs 
A)  variable costs,product costs,and sunk costs 
B)  fixed costs,variable costs,and mixed costs 
C)  variable costs,period costs,and differential costs 
D)  variable costs,sunk costs,and opportunity costs

Question 16

A cost that has characteristics of both a variable cost and a fixed cost is called a

Accepted Answer

A)  variable / fixed cost 
B)  mixed cost 
C)  discretionary cost 
D)  sunk cost 
A)  variable / fixed cost 
B)  mixed cost 
C)  discretionary cost 
D)  sunk cost

Question 17

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

Accepted Answer

A) True 
 B)False

Question 18

Only a single line,which represents the difference between total sales revenues and total costs,is plotted on the cost-volume-profit chart.

Accepted Answer

A) True 
 B)False

Question 19

The systematic examination of the relationships among selling prices,volume of sales and production,costs,and profits is termed

Accepted Answer

A)  contribution margin analysis 
B)  cost-volume-profit analysis 
C)  budgetary analysis 
D)  gross profit analysis 
A)  contribution margin analysis 
B)  cost-volume-profit analysis 
C)  budgetary analysis 
D)  gross profit analysis

Question 20

Understanding how costs behave is useful to management for all the following reasons except

Accepted Answer

A)  predicting customer demand 
B)  predicting profits as sales and production volumes change 
C)  estimating costs 
D)  changing an existing product production 
A)  predicting customer demand 
B)  predicting profits as sales and production volumes change 
C)  estimating costs 
D)  changing an existing product production

Exam 19: Cost-Volume-Profit Analysis

A company has a margin of safety of 25%,a contribution margin ratio of 30%,and sales of $1,000,000.

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

If the contribution margin ratio for France Company is 45%,sales were $425,000,and fixed costs were $100,000,what was the income from operations?

A firm operated at 80% of capacity for the past year,during which fixed costs were $330,000,variable costs were 70% of sales,and sales were $1,000,000.Operating profit (loss)was

Understanding how costs behave is useful to management for all the following reasons except

Cost behavior refers to the manner in which

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit,and fixed costs are $270,000. ​ Determine the (a)unit sales price,and (b)break-even points in sales units if the company desires a target profit of $36,000.

If the property tax rates are increased,this change in fixed costs will result in a decrease in the break-even point.

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Mia Enterprises sells a product for $90 per unit.The variable cost is $40 per unit,while fixed costs are $75,000.Determine the (a)break-even point in sales units,and (b)break-even point in sales units if the selling price increased to $100 per unit.

If the contribution margin ratio for France Company is 45%,sales were $425,000,and fixed costs were $100,000,what was the income from operations?

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

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?

If a business sells four products,it is not possible to estimate the break-even point.

The three most common cost behavior classifications are

A cost that has characteristics of both a variable cost and a fixed cost is called a

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

Only a single line,which represents the difference between total sales revenues and total costs,is plotted on the cost-volume-profit chart.

The systematic examination of the relationships among selling prices,volume of sales and production,costs,and profits is termed

Understanding how costs behave is useful to management for all the following reasons except

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 Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit,and fixed costs are $270,000. Determine the (a)unit sales price,and (b)break-even points in sales units if the company desires a target profit of $36,000.