Question 1

The Tom Company reports the following data:
Determine Tom Company's operating leverage.

Accepted Answer

($600,000 - $400,000

Question 2

As production increases,variable costs per unit

Accepted Answer

A)  stay the same 
B)  increase 
C)  decrease 
D)  either increase or decrease,depending on the fixed costs 
A)  stay the same 
B)  increase 
C)  decrease 
D)  either increase or decrease,depending on the fixed costs

Question 3

Unit variable cost does not change as the number of units of activity changes.

Accepted Answer

A) True 
 B)False

Question 4

If a business had sales of $4,000,000 and a margin of safety of 25%,the break-even point was

Accepted Answer

A)  $5,000,000 
B)  $3,000,000 
C)  $12,000,000 
D)  $1,000,000 
A)  $5,000,000 
B)  $3,000,000 
C)  $12,000,000 
D)  $1,000,000

Question 5

If fixed costs are $1,200,000,the unit selling price is $240,and the unit variable costs are $110,what is the amount of sales required to realize an operating income of $200,000?

Accepted Answer

A)  9,231 units 
B)  12,000 units 
C)  10,769 units 
D)  5,833 units 
A)  9,231 units 
B)  12,000 units 
C)  10,769 units 
D)  5,833 units

Question 6

Harley Company has sales of $500,000,variable costs are 75% of sales,and operating income is $40,000.What is Harley's operating leverage?

Accepted Answer

A)  0.0 
B)  1.2 
C)  1.3 
D)  3.1 
A)  0.0 
B)  1.2 
C)  1.3 
D)  3.1

Question 7

The Klein Company reports the following data:
​
​
   Determine Klein Company's operating leverage.Round your answer to two decimal places.

Accepted Answer

($980,000 - $500,000

Question 8

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

Current Scenario:SP $80 VC 30 CM $50 × 2

Question 10

Which of the graphs in Figure 21-1 illustrates the nature of a mixed cost?

Accepted Answer

A)  Graph 2 
B)  Graph 3 
C)  Graph 4 
D)  Graph 1 
A)  Graph 2 
B)  Graph 3 
C)  Graph 4 
D)  Graph 1

Question 11

For the current year ending April 30,Hal Company expects fixed costs of $60,000,a unit variable cost of $70,and anticipated break-even of 1,715 sales units.
Round your answer to the nearest whole number.

Accepted Answer

The answer of For the current year ending April 30,Hal...

Question 12

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 13

If Kaden Company's 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)?

Accepted Answer

A)  2,400 
B)  1,950 
C)  1,114 
D)  2,600 
A)  2,400 
B)  1,950 
C)  1,114 
D)  2,600

Question 14

What was Rusty Co.'s unit variable cost of E?

Accepted Answer

A)  $52.50 
B)  $70.00 
C)  $120.00 
D)  $50.00 
A)  $52.50 
B)  $70.00 
C)  $120.00 
D)  $50.00

Question 15

Payton Industries has fixed costs of $490,000,the unit selling price is $35,and the unit variable costs are $20.What is the break-even sales (units)if fixed costs are reduced by $40,000?

Accepted Answer

A)  32,667 units 
B)  14,000 units 
C)  30,000 units 
D)  24,500 units 
A)  32,667 units 
B)  14,000 units 
C)  30,000 units 
D)  24,500 units

Question 16

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 17

If fixed costs are $650,000 and the unit contribution margin is $30,the sales necessary to earn an operating income of $30,000 are 14,000 units.

Accepted Answer

A) True 
 B)False

Question 18

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

Accepted Answer

A)  decrease 
B)  increase 
C)  remain the same 
D)  increase or decrease,depending upon the percentage increase in wage rates 
A)  decrease 
B)  increase 
C)  remain the same 
D)  increase or decrease,depending upon the percentage increase in wage rates

Question 19

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 20

Total fixed costs change as the level of activity changes.

Accepted Answer

A) True 
 B)False

Exam 19: Cost-Volume-Profit Analysis

The Tom Company reports the following data: Determine Tom Company's operating leverage.

As production increases,variable costs per unit

Unit variable cost does not change as the number of units of activity changes.

If a business had sales of $4,000,000 and a margin of safety of 25%,the break-even point was

If fixed costs are $1,200,000,the unit selling price is $240,and the unit variable costs are $110,what is the amount of sales required to realize an operating income of $200,000?

Harley Company has sales of $500,000,variable costs are 75% of sales,and operating income is $40,000.What is Harley's operating leverage?

The Klein Company reports the following data: ​ ​ Determine Klein Company's operating leverage.Round your answer to two decimal places.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Which of the graphs in Figure 21-1 illustrates the nature of a mixed cost?

For the current year ending April 30,Hal Company expects fixed costs of $60,000,a unit variable cost of $70,and anticipated break-even of 1,715 sales units. Round your answer to the nearest whole number.

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 Kaden Company's 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)?

What was Rusty Co.'s unit variable cost of E?

Payton Industries has fixed costs of $490,000,the unit selling price is $35,and the unit variable costs are $20.What is the break-even sales (units)if fixed costs are reduced by $40,000?

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

If fixed costs are $650,000 and the unit contribution margin is $30,the sales necessary to earn an operating income of $30,000 are 14,000 units.

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

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.

Total fixed costs change as the level of activity changes.

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 Klein Company reports the following data: Determine Klein Company's operating leverage.Round your answer to two decimal places.

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.