Question 1

If fixed costs are $750,000 and variable costs are 60% of sales,what is the break-even point in sales dollars?

Accepted Answer

A)  $1,250,000 
B)  $450,000 
C)  $1,875,000 
D)  $300,000 
A)  $1,250,000 
B)  $450,000 
C)  $1,875,000 
D)  $300,000

Question 2

Bluegill Company sells 45,000 units at $18 per unit.Fixed costs are $62,000 and income from operations is $298,000.Determine the (a)variable cost per unit,(b)unit contribution margin,and (c)contribution margin ratio.

Accepted Answer

The answer of Bluegill Company sells 45,000 units at $18...

Question 3

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 4

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

Accepted Answer

A) True 
 B)False

Question 5

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s break-even point in units?

Accepted Answer

A)  16,875 units 
B)  30,100 units 
C)  30,000 units 
D)  11,250 units 
A)  16,875 units 
B)  30,100 units 
C)  30,000 units 
D)  11,250 units

Question 6

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 7

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 8

The point where the profit line intersects the horizontal axis on the profit-volume chart represents

Accepted Answer

A)  the maximum possible operating loss 
B)  the maximum possible operating income 
C)  the total fixed costs 
D)  the break-even point 
A)  the maximum possible operating loss 
B)  the maximum possible operating income 
C)  the total fixed costs 
D)  the break-even point

Question 9

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 10

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Accepted Answer

A) True 
 B)False

Question 11

Variable costs are costs that vary in total in direct proportion to changes in the activity level.

Accepted Answer

A) True 
 B)False

Question 12

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 13

A company with a break-even point at $900,000 in sales revenue had fixed costs of $225,000.When actual sales were
$1,000,000,variable costs were $750,000.Determine (a)the margin of safety expressed in dollars,(b)the margin of safety
expressed as a percentage of sales,(c)the contribution margin ratio,and (d)the operating income.

Accepted Answer

The answer of A company with a break-even point at...

Question 14

Which of the following is an example of a cost that varies in total as the number of units produced changes?

Accepted Answer

A)  salary of a production supervisor 
B)  direct materials cost 
C)  property taxes on factory buildings 
D)  straight-line depreciation on factory equipment 
A)  salary of a production supervisor 
B)  direct materials cost 
C)  property taxes on factory buildings 
D)  straight-line depreciation on factory equipment

Question 15

Piper Technology's fixed costs are $1,500,000,the unit selling price is $250,and the unit variable costs are $130,what is the amount of sales required to realize an operating income of $200,000?

Accepted Answer

A)  14,167 units 
B)  12,500 units 
C)  16,000 units 
D)  11,538 units 
A)  14,167 units 
B)  12,500 units 
C)  16,000 units 
D)  11,538 units

Question 16

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 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

Accepted Answer

A) True 
 B)False

Question 20

O'Boyle Co.'s fixed costs are $256,000,the unit selling price is $36,and the unit variable costs are $20,what is the break-even sales (units)?

Accepted Answer

A)  12,800 units 
B)  4,571 units 
C)  16,000 units 
D)  7,111 units 
A)  12,800 units 
B)  4,571 units 
C)  16,000 units 
D)  7,111 units

Exam 19: Cost-Volume-Profit Analysis

If fixed costs are $750,000 and variable costs are 60% of sales,what is the break-even point in sales dollars?

Bluegill Company sells 45,000 units at $18 per unit.Fixed costs are $62,000 and income from operations is $298,000.Determine the (a)variable cost per unit,(b)unit contribution margin,and (c)contribution margin ratio.

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?

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s break-even point in units?

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.

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

The point where the profit line intersects the horizontal axis on the profit-volume chart represents

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

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Variable costs are costs that vary in total in direct proportion to changes in the activity level.

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.

Which of the following is an example of a cost that varies in total as the number of units produced changes?

Piper Technology's fixed costs are $1,500,000,the unit selling price is $250,and the unit variable costs are $130,what is the amount of sales required to realize an operating income of $200,000?

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

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.

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

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

O'Boyle Co.'s fixed costs are $256,000,the unit selling price is $36,and the unit variable costs are $20,what is the break-even sales (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

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.