Exam 19: Cost-Volume-Profit Analysis

Carrolton,Inc.currently sells widgets for $80 per unit.The variable cost is $30 per unit and total fixed costs equal $240,000 per year.Sales are currently 20,000 units annually. ​ The company is considering a 20% drop in selling price that it believes will raise units sold by 20%.Assuming all costs stay the same,what is the impact on income if this change is made?

If fixed costs increased and variable costs per unit decreased,the break-even point would

For the past year,Iris Company had fixed costs of $6,708,000,a unit variable cost of $444,and a unit selling price of $600.For the coming year,no changes are expected in revenues and costs,except that a new wage contract will increase variable costs by $6 per unit.Determine the break-even sales (units)for (a)the past year and (b)the coming year.

The fixed cost per unit varies with changes in the level of activity.

If fixed costs are $500,000,the unit selling price is $55,and the unit variable costs are $30,what is the break-even sales (units)if fixed costs are increased by $80,000?

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?

In an absorption costing income statement,the manufacturing margin is the excess of sales over the variable cost of goods sold.

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?

If direct materials cost per unit increases,the break-even point will decrease.

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

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

Which of the graphs in Figure 21-1 illustrates the behavior of a total fixed cost?

The manufacturing cost of Calico Industries for three months of the year are provided below: ​ Using the high-low method,the variable cost per unit and the total fixed costs are

If fixed costs are $500,000 and the unit contribution margin is $20,what is the break-even point in units if fixed costs are reduced by $80,000?

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

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

If fixed costs are $561,000 and the unit contribution margin is $8.00,what is the break-even point in units if variable costs are decreased by $0.50 a unit?

Zipee Inc.'s unit selling price is $90,the unit variable costs are $40.50,fixed costs are $170,000,and current sales are 12,000 units.How much will operating income change if sales increase by 5,000 units?

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

Variable costs as a percentage of sales for Lemon Inc.are 80%,current sales are $600,000,and fixed costs are $130,000.How much will operating income change if sales increase by $40,000?