Question 1

If fixed costs are $500,000 and variable costs are 60% of break-even sales,profit is zero when sales revenue is $930,000.

Accepted Answer

A) True 
 B)False

Question 2

The fixed cost per unit varies with changes in the level of activity.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not an assumption underlying cost-volume-profit analysis?

Accepted Answer

A)  The break-even point will be passed during the period. 
B)  Total sales and total costs can be represented by straight lines. 
C)  Costs can be accurately divided into fixed and variable components. 
D)  The sales mix is constant. 
A)  The break-even point will be passed during the period. 
B)  Total sales and total costs can be represented by straight lines. 
C)  Costs can be accurately divided into fixed and variable components. 
D)  The sales mix is constant.

Question 4

If fixed costs are $500,000 and the unit contribution margin is $20,what is the break-even point in units if fixed costs are reduced by $80,000?

Accepted Answer

A)  25,000 
B)  29,000 
C)  4,000 
D)  21,000 
A)  25,000 
B)  29,000 
C)  4,000 
D)  21,000

Question 5

If fixed costs are $850,000 and the unit contribution margin is $50,profit is zero when 15,000 units are sold.

Accepted Answer

A) True 
 B)False

Question 6

If the unit selling price is $40,the volume of sales is $3,000,000,sales at the break-even point amount to $2,500,000,and the maximum possible sales are $3,300,000,the margin of safety is 11,500 units.

Accepted Answer

A) True 
 B)False

Question 7

If the property tax rates are increased,this change in fixed costs will result in a decrease in the break-even point.

Accepted Answer

A) True 
 B)False

Question 8

The three most common cost behavior classifications are

Accepted Answer

A)  variable costs,product costs,and sunk costs 
B)  fixed costs,variable costs,and mixed costs 
C)  variable costs,period costs,and differential costs 
D)  variable costs,sunk costs,and opportunity costs 
A)  variable costs,product costs,and sunk costs 
B)  fixed costs,variable costs,and mixed costs 
C)  variable costs,period costs,and differential costs 
D)  variable costs,sunk costs,and opportunity costs

Question 9

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Given the following costs and activities for Dance Company electrical costs,use the high-low method to calculate Dance's variable electrical costs per machine hour. ​

Accepted Answer

A)  ​$2.08 
B)  ​$6.00 
C)  ​$0.60 
D)  ​$1.20 
A)  ​$2.08 
B)  ​$6.00 
C)  ​$0.60 
D)  ​$1.20

Question 12

Charlotte Co.has budgeted salary increases to factory supervisors totaling 9%.If selling prices and all other cost relationships are held constant,next year's break-even point

Accepted Answer

A)  will decrease by 9% 
B)  will increase by 9% 
C)  cannot be determined from the data given 
D)  will increase at a rate greater than 9% 
A)  will decrease by 9% 
B)  will increase by 9% 
C)  cannot be determined from the data given 
D)  will increase at a rate greater than 9%

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

The contribution margin ratio is the same as the profit-volume ratio.

Accepted Answer

A) True 
 B)False

Question 17

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 18

In an absorption costing income statement,the manufacturing margin is the excess of sales over the variable cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 19

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit,and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are

Accepted Answer

A)  47% and $11 per unit 
B)  53% and $7 per unit 
C)  47% and $8 per unit 
D)  52% and $11 per unit 
A)  47% and $11 per unit 
B)  53% and $7 per unit 
C)  47% and $8 per unit 
D)  52% and $11 per unit

Question 20

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

Accepted Answer

A)  the maximum possible operating loss 
B)  the maximum possible operating income 
C)  the total fixed costs 
D)  the break-even point 
A)  the maximum possible operating loss 
B)  the maximum possible operating income 
C)  the total fixed costs 
D)  the break-even point

Exam 19: Cost-Volume-Profit Analysis

If fixed costs are $500,000 and variable costs are 60% of break-even sales,profit is zero when sales revenue is $930,000.

The fixed cost per unit varies with changes in the level of activity.

Which of the following is not an assumption underlying cost-volume-profit analysis?

If fixed costs are $500,000 and the unit contribution margin is $20,what is the break-even point in units if fixed costs are reduced by $80,000?

If fixed costs are $850,000 and the unit contribution margin is $50,profit is zero when 15,000 units are sold.

If the unit selling price is $40,the volume of sales is $3,000,000,sales at the break-even point amount to $2,500,000,and the maximum possible sales are $3,300,000,the margin of safety is 11,500 units.

If the property tax rates are increased,this change in fixed costs will result in a decrease in the break-even point.

The three most common cost behavior classifications are

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

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

Given the following costs and activities for Dance Company electrical costs,use the high-low method to calculate Dance's variable electrical costs per machine hour. ​

Charlotte Co.has budgeted salary increases to factory supervisors totaling 9%.If selling prices and all other cost relationships are held constant,next year's break-even point

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

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

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

The contribution margin ratio is the same as the profit-volume ratio.

As production increases,variable costs per unit

In an absorption costing income statement,the manufacturing margin is the excess of sales over the variable cost of goods sold.

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit,and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

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

Given the following costs and activities for Dance Company electrical costs,use the high-low method to calculate Dance's variable electrical costs per machine hour.