Question 1

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 2

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Accepted Answer

A)  38% 
B)  26.8% 
C)  11.8% 
D)  62% 
A)  38% 
B)  26.8% 
C)  11.8% 
D)  62%

Question 3

What was Carter Co.'s variable cost of E?

Accepted Answer

A)  $140 
B)  $70 
C)  $64 
D)  $60 
A)  $140 
B)  $70 
C)  $64 
D)  $60

Question 4

Most operating decisions of management focus on a narrow range of activity called the

Accepted Answer

A)  relevant range of production 
B)  strategic level of production 
C)  optimal level of production 
D)  tactical operating level of production 
A)  relevant range of production 
B)  strategic level of production 
C)  optimal level of production 
D)  tactical operating level of production

Question 5

Break-even analysis is one type of cost-volume-profit analysis.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

The difference between the current sales revenue and the sales at the break-even point is called the

Accepted Answer

A)  contribution margin 
B)  margin of safety 
C)  price factor 
D)  operating leverage 
A)  contribution margin 
B)  margin of safety 
C)  price factor 
D)  operating leverage

Question 10

Which of the following describes the behavior of a variable cost per unit?

Accepted Answer

A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level 
A)  varies in increasing proportion with changes in the activity level 
B)  varies in decreasing proportion with changes in the activity level 
C)  remains constant with changes in the activity level 
D)  varies in direct proportion with the activity level

Question 11

The data required for determining the break-even point for a business are the total estimated fixed costs for a period,stated as a percentage of net sales.

Accepted Answer

A) True 
 B)False

Question 12

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Accepted Answer

A)  38% 
B)  26.8% 
C)  11.8% 
D)  62% 
A)  38% 
B)  26.8% 
C)  11.8% 
D)  62%

Question 13

The graph of a variable cost when plotted against its related activity base appears as a

Accepted Answer

A)  circle 
B)  rectangle 
C)  straight line 
D)  curved line 
A)  circle 
B)  rectangle 
C)  straight line 
D)  curved line

Question 14

Bobby 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 contribution margin of sa

Question 15

A mixed cost has characteristics of both a variable and a fixed cost.

Accepted Answer

A) True 
 B)False

Question 16

A firm operated at 90% of capacity for the past year,during which fixed costs were $420,000,variable costs were 40% of sales,and sales were $1,000,000.Operating profit was

Accepted Answer

A)  $180,000 
B)  $420,000 
C)  $1,080,000 
D)  $980,000 
A)  $180,000 
B)  $420,000 
C)  $1,080,000 
D)  $980,000

Question 17

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

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

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

Accepted Answer

A)  $0.78 per unit and $4,000 
B)  $0.40 per unit and $8,000 
C)  $4.00 per unit and $800 
D)  $7.80 per unit and $4,000 
A)  $0.78 per unit and $4,000 
B)  $0.40 per unit and $8,000 
C)  $4.00 per unit and $800 
D)  $7.80 per unit and $4,000

Question 20

Strait Co.manufactures office furniture.During the most productive month of the year,3,000 desks were manufactured at a total cost of $59,000.In the month of lowest production the company made 1,125 desks at a cost of $38,000.Using the high-low method of cost estimation,total fixed costs are

Accepted Answer

A)  $21,000 
B)  $25,400 
C)  $42,000 
D)  $13,000 
A)  $21,000 
B)  $25,400 
C)  $42,000 
D)  $13,000

Exam 19: Cost-Volume-Profit Analysis

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%.

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

What was Carter Co.'s variable cost of E?

Most operating decisions of management focus on a narrow range of activity called the

Break-even analysis is one type of cost-volume-profit analysis.

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

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.

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

The difference between the current sales revenue and the sales at the break-even point is called the

Which of the following describes the behavior of a variable cost per unit?

The data required for determining the break-even point for a business are the total estimated fixed costs for a period,stated as a percentage of net sales.

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

The graph of a variable cost when plotted against its related activity base appears as a

Bobby 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.

A mixed cost has characteristics of both a variable and a fixed cost.

A firm operated at 90% of capacity for the past year,during which fixed costs were $420,000,variable costs were 40% of sales,and sales were $1,000,000.Operating profit was

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

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

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

Strait Co.manufactures office furniture.During the most productive month of the year,3,000 desks were manufactured at a total cost of $59,000.In the month of lowest production the company made 1,125 desks at a cost of $38,000.Using the high-low method of cost estimation,total fixed costs are

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 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.

Bobby 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.

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