Question 1

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Accepted Answer

A) True 
 B)False

Question 2

What was Rusty Co.'s weighted average unit contribution margin?

Accepted Answer

A)  $60.00 
B)  $20.00 
C)  $40.00 
D)  $22.50 
A)  $60.00 
B)  $20.00 
C)  $40.00 
D)  $22.50

Question 3

For the coming year,River Company estimates fixed costs at $109,000,the unit variable cost at $21,and the unit selling price at $85.Determine (a)the break-even point in units of sales,(b)the unit sales required to realize operating income of $150,000 and (c)the probable operating income if sales total $500,000.
​
Round units to the nearest whole number and percentage to one decimal place.

Accepted Answer

The answer of For the coming year,River Company estimates fixed...

Question 4

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 5

The Rocky Company reports the following data: ​
​
  Rocky Company's operating leverage is

Accepted Answer

A)  6.7 
B)  2.7 
C)  1.0 
D)  1.3 
A)  6.7 
B)  2.7 
C)  1.0 
D)  1.3

Question 6

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

A)  total fixed costs decrease 
B)  unit selling price increases 
C)  unit variable cost decreases 
D)  unit variable cost increases 
A)  total fixed costs decrease 
B)  unit selling price increases 
C)  unit variable cost decreases 
D)  unit variable cost increases

Question 7

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

Accepted Answer

A) True 
 B)False

Question 8

Beemer's sales are $400,000,variable costs are 75% of sales,and operating income is $50,000.The operating leverage is

Accepted Answer

A)  2.5 
B)  7.5 
C)  2.0 
D)  0 
A)  2.5 
B)  7.5 
C)  2.0 
D)  0

Question 9

If sales are $820,000,variable costs are 55% of sales,and operating income is $260,000,what is the contribution margin ratio?

Accepted Answer

A)  45% 
B)  55% 
C)  62% 
D)  32% 
A)  45% 
B)  55% 
C)  62% 
D)  32%

Question 10

If fixed costs are $300,000,the unit selling price is $31,and the unit variable costs are $22,what is the break-even sales (units)if fixed costs are reduced by $30,000?

Accepted Answer

A)  30,000 units 
B)  8,710 units 
C)  12,273 units 
D)  20,000 units 
A)  30,000 units 
B)  8,710 units 
C)  12,273 units 
D)  20,000 units

Question 11

Trail Bikes,Inc.sells three Deluxe bikes for every seven Standard bikes.The Deluxe bike sells for $1,800 and has variable costs of $1,200.The Standard bike sells for $600 and has variable costs of $200.
Required
(a)If Trail Bikes has fixed costs that total $1,702,000,how many bikes must be sold in order for the company to
break even?
(b)How many of these bikes will be Deluxe bikes and how many will be the Standard bikes?

Accepted Answer

(a)Weighted average contributi

Question 12

The manufacturing cost of Carrie Industries for the first three months of the year are provided below:
​
   Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed cost.

Accepted Answer

(a)($115,500 - $79,5

Question 13

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

Accepted Answer

A)  unaffected 
B)  expected to increase by 3% 
C)  expected to increase by 48% 
D)  expected to increase by 4 % 
A)  unaffected 
B)  expected to increase by 3% 
C)  expected to increase by 48% 
D)  expected to increase by 4 %

Question 14

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units)?

Accepted Answer

A)  3,425 units 
B)  2,381 units 
C)  2,000 units 
D)  4,808 units 
A)  3,425 units 
B)  2,381 units 
C)  2,000 units 
D)  4,808 units

Question 15

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.

Accepted Answer

The answer of For the past year,Iris Company had fixed...

Question 16

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 17

Companies with large amounts of fixed costs will generally have a high operating leverage.

Accepted Answer

A) True 
 B)False

Question 18

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 19

With the aid of computer software,managers can vary assumptions regarding selling prices,costs,and volume,and can immediately see the effects of each change on the break-even point and profit.This is called

Accepted Answer

A)  "what if" or sensitivity analysis 
B)  vary the data analysis 
C)  computer aided analysis 
D)  data gathering 
A)  "what if" or sensitivity analysis 
B)  vary the data analysis 
C)  computer aided analysis 
D)  data gathering

Question 20

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

Accepted Answer

A) True 
 B)False

Exam 19: Cost-Volume-Profit Analysis

Cost-volume-profit analysis can be presented in both equation form and graphic form.

What was Rusty Co.'s weighted average unit contribution margin?

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

The Rocky Company reports the following data: ​ ​ Rocky Company's operating leverage is

Which of the following conditions would cause the break-even point to increase?

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

Beemer's sales are $400,000,variable costs are 75% of sales,and operating income is $50,000.The operating leverage is

If sales are $820,000,variable costs are 55% of sales,and operating income is $260,000,what is the contribution margin ratio?

If fixed costs are $300,000,the unit selling price is $31,and the unit variable costs are $22,what is the break-even sales (units)if fixed costs are reduced by $30,000?

The manufacturing cost of Carrie Industries for the first three months of the year are provided below: ​ Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed cost.

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units)?

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%.

Companies with large amounts of fixed costs will generally have a high operating leverage.

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%.

With the aid of computer software,managers can vary assumptions regarding selling prices,costs,and volume,and can immediately see the effects of each change on the break-even point and profit.This is called

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

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 Rocky Company reports the following data: Rocky Company's operating leverage is

The manufacturing cost of Carrie Industries for the first three months of the year are provided below: Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed cost.