Question 1

Lee Industry sales are $525,000,variable costs are 53% of sales,and operating income is $19,000.What is the contribution margin ratio?

Accepted Answer

A)  47% 
B)  26.5% 
C)  9.5% 
D)  53% 
A)  47% 
B)  26.5% 
C)  9.5% 
D)  53%

Question 2

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

Accepted Answer

A) True 
 B)False

Question 3

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)  insurance premiums on factory building 
D)  wages of assembly worker 
A)  electricity per KWH to operate factory equipment 
B)  direct materials cost 
C)  insurance premiums on factory building 
D)  wages of assembly worker

Question 4

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Accepted Answer

A) True 
 B)False

Question 5

Reynold's Grocery has fixed costs of $350,000,the unit selling price is $29,and the unit variable costs are $20.What is the break-even sales (units)if the variable costs are decreased by $4?

Accepted Answer

A)  26,923 units 
B)  12,069 units 
C)  21,875 units 
D)  38,889 units 
A)  26,923 units 
B)  12,069 units 
C)  21,875 units 
D)  38,889 units

Question 6

If fixed costs are $400,000 and the unit contribution margin is $20,what amount of units must be sold in order to have a zero profit?

Accepted Answer

A)  25,000 units 
B)  10,000 units 
C)  400,000 units 
D)  20,000 units 
A)  25,000 units 
B)  10,000 units 
C)  400,000 units 
D)  20,000 units

Question 7

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

Accepted Answer

A)  Total fixed costs increase 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Total fixed costs decrease 
A)  Total fixed costs increase 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Total fixed costs decrease

Question 8

Assume that Corn Co.sold 8,000 units of Product A and 2,000 units of Product B during the past year.The unit contribution margins for Products A and B are $30 and $60,respectively.Corn has fixed costs of $378,000.The break-even point in units is

Accepted Answer

A)  8,000 units 
B)  6,300 units 
C)  12,600 units 
D)  10,500 units 
A)  8,000 units 
B)  6,300 units 
C)  12,600 units 
D)  10,500 units

Question 9

Piper Technology's fixed costs are $1,500,000,the unit selling price is $250,and the unit variable costs are $130,what is the amount of sales required to realize an operating income of $200,000?

Accepted Answer

A)  14,167 units 
B)  12,500 units 
C)  16,000 units 
D)  11,538 units 
A)  14,167 units 
B)  12,500 units 
C)  16,000 units 
D)  11,538 units

Question 10

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

Accepted Answer

A)  no difference 
B)  $2,000 greater 
C)  $4,000 less 
D)  $6,000 less 
A)  no difference 
B)  $2,000 greater 
C)  $4,000 less 
D)  $6,000 less

Question 11

If a business sells four products,it is not possible to estimate the break-even point.

Accepted Answer

A) True 
 B)False

Question 12

Blane Company has the following data:
​
   What will operating income be if units sold double to 100,000 units?

Accepted Answer

The answer of Blane Company has the following data:
​
 ...

Question 13

Gladstorm Enterprises sells a product for $60 per unit.The variable cost is $20 per unit,while fixed costs are $85,000.Determine the (a)break-even point in sales units,and (b)break-even point in sales units if the selling price increased to $80 per unit.Round your answer to the nearest whole number.

Accepted Answer

a.SP $60 - VC $20 = CM $40 $85

Question 14

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable,fixed,or mixed cost for units produced and sold.

Accepted Answer

The answer of The following is a list of various...

Question 15

For purposes of analysis,mixed costs are

Accepted Answer

A)  classified as fixed costs 
B)  classified as variable costs 
C)  classified as period costs 
D)  separated into their variable and fixed cost components 
A)  classified as fixed costs 
B)  classified as variable costs 
C)  classified as period costs 
D)  separated into their variable and fixed cost components

Question 16

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 17

Which of the graphs in Figure 21-1 illustrates the behavior of a total fixed 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 18

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

Accepted Answer

A)  direct labor 
B)  salary of a factory supervisor 
C)  units-of-production depreciation on factory equipment 
D)  direct materials 
A)  direct labor 
B)  salary of a factory supervisor 
C)  units-of-production depreciation on factory equipment 
D)  direct materials

Question 19

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

Accepted Answer

A)  number of truck drivers 
B)  total of miles driven 
C)  how many trucks are in service 
D)  number of packages picked up 
A)  number of truck drivers 
B)  total of miles driven 
C)  how many trucks are in service 
D)  number of packages picked up

Question 20

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

Accepted Answer

A)  margin of safety ratio 
B)  contribution margin ratio 
C)  costs and expenses ratio 
D)  profit ratio 
A)  margin of safety ratio 
B)  contribution margin ratio 
C)  costs and expenses ratio 
D)  profit ratio

Exam 19: Cost-Volume-Profit Analysis

Lee Industry sales are $525,000,variable costs are 53% of sales,and operating income is $19,000.What is the contribution margin ratio?

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

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

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Reynold's Grocery has fixed costs of $350,000,the unit selling price is $29,and the unit variable costs are $20.What is the break-even sales (units)if the variable costs are decreased by $4?

If fixed costs are $400,000 and the unit contribution margin is $20,what amount of units must be sold in order to have a zero profit?

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

Assume that Corn Co.sold 8,000 units of Product A and 2,000 units of Product B during the past year.The unit contribution margins for Products A and B are $30 and $60,respectively.Corn has fixed costs of $378,000.The break-even point in units is

Piper Technology's fixed costs are $1,500,000,the unit selling price is $250,and the unit variable costs are $130,what is the amount of sales required to realize an operating income of $200,000?

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

If a business sells four products,it is not possible to estimate the break-even point.

Blane Company has the following data: ​ What will operating income be if units sold double to 100,000 units?

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable,fixed,or mixed cost for units produced and sold.

For purposes of analysis,mixed costs are

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

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

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

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

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

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?