Question 1

Assuming that last year's fixed costs totaled $960,000,what was Carter Co.'s break-even point in units?

Accepted Answer

A)  40,000 units 
B)  12,000 units 
C)  35,000 units 
D)  28,000 units 
A)  40,000 units 
B)  12,000 units 
C)  35,000 units 
D)  28,000 units

Question 2

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 3

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 4

Cordell,Inc.has an operating leverage of 3.Sales are expected to increase by 9% next year.What is the expected change in operating income next year?

Accepted Answer

If sales increase 9% and the o

Question 5

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?

Accepted Answer

A)  66,000 
B)  70,125 
C)  74,800 
D)  60,000 
A)  66,000 
B)  70,125 
C)  74,800 
D)  60,000

Question 6

If fixed costs are $600,000 and the unit contribution margin is $40,what is the break-even point if fixed costs are increased by $90,000?

Accepted Answer

A)  17,250 
B)  15,000 
C)  8,333 
D)  9,667 
A)  17,250 
B)  15,000 
C)  8,333 
D)  9,667

Question 7

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $50,000 are 10,000 units.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Global Publishers has collected the following data for recent months:
Month Issues published Total cost
March 20,500 $20,960
April 21,800 22,464
May 17,750 18,495
June 21,200 21,395
​
Required:
(a)Using the high-low method,find variable cost per unit,total fixed costs,and the total cost equation.
(b)What is the estimated cost for a month in which 19,000 issues are published?

Accepted Answer

(a)Variable cost per unit = ($22,464 - $

Question 10

If direct materials cost per unit decreases,the amount of sales necessary to earn a desired amount of profit will decrease.

Accepted Answer

A) True 
 B)False

Question 11

What was Carter Co.'s unit contribution margin of E?

Accepted Answer

A)  $24 
B)  $60 
C)  $92 
D)  $20 
A)  $24 
B)  $60 
C)  $92 
D)  $20

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30,the break-even point is

Accepted Answer

A)  16,000 units 
B)  8,000 units 
C)  6,000 units 
D)  4,000 units 
A)  16,000 units 
B)  8,000 units 
C)  6,000 units 
D)  4,000 units

Question 14

The Waterfall Company sells a product for $150 per unit.The variable cost is $80 per unit,and fixed costs are $270,000.
​
Determine the (a)break-even point in sales units,and (b)break-even points in sales units if the company desires a target profit of $36,000.Round your answer to the nearest whole number.

Accepted Answer

a.$150 - $80 = $70 $

Question 15

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 16

The manufacturing cost of Mocha Industries for 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 costs.

Accepted Answer

(a)($100,900 - $63,100) / (2,6

Question 17

In order to choose the proper activity base for a cost,managerial accountants must be familiar with the operations of the entity.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Accepted Answer

A) True 
 B)False

Question 20

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?

Accepted Answer

A)  $8,000 increase 
B)  $8,000 decrease 
C)  $30,000 decrease 
D)  $30,000 increase 
A)  $8,000 increase 
B)  $8,000 decrease 
C)  $30,000 decrease 
D)  $30,000 increase

Exam 19: Cost-Volume-Profit Analysis

Assuming that last year's fixed costs totaled $960,000,what was Carter Co.'s break-even point in units?

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

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.

Cordell,Inc.has an operating leverage of 3.Sales are expected to increase by 9% next year.What is the expected change in operating income next year?

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?

If fixed costs are $600,000 and the unit contribution margin is $40,what is the break-even point if fixed costs are increased by $90,000?

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $50,000 are 10,000 units.

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

If direct materials cost per unit decreases,the amount of sales necessary to earn a desired amount of profit will decrease.

What was Carter Co.'s unit contribution margin of E?

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

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30,the break-even point is

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

The manufacturing cost of Mocha Industries for 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 costs.

In order to choose the proper activity base for a cost,managerial accountants must be familiar with the operations of the entity.

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

Cost behavior refers to the manner in which a cost changes as the related activity changes.

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?

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 Mocha Industries for 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 costs.