Exam 21: Cost-Volume-Profit Analysis

Mendoza Company's highest point of total cost was $80,000 in June.Their point of lowest cost was $65,000 in January.The company makes a single product.Production volume in June and January were 16,000 and 8,000 units,respectively.What is the fixed cost per month?

Watson,Inc.has collected the following data for the current year: The beginning Finished Goods Inventory costs were $3,800 under absorption costing and $2,500 under variable costing. What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. )

Fontana Pizza Company sells pizzas in two different sizes-medium and large.The number of medium pizzas sold is twice the number of large pizzas sold.The contribution margin of a medium pizza is $12 and the contribution margin of a large pizza is $18.The weighted average contribution margin is $15.

Fixed cost per unit is assumed to be constant within a particular relevant range of activity.

Aspen Manufacturers produces flooring material.The monthly fixed costs are $12,000 per month.The unit selling price is $85 and variable cost per unit is $45.Aspen wishes to earn an operating income of $25,000.Using the contribution martin ratio,calculate the total revenue.(Round your intermediate calculations to five decimal places. )

The phone bill for Ace Accounting consists of both fixed and variable costs.Refer to the four month data below and apply the high-low method to answer the question.(Round your intermediate calculations to two decimal places. ) What is the fixed portion of the total cost?

When production is greater than sales,the operating income will be higher under absorption costing than variable costing.Assume zero beginning and ending inventories.Which of the following gives the correct reason for the above statement?

Dentofax,Inc.reports the following information for August: Calculate the operating income for August using absorption costing.

If the variable cost per unit decreases,the total number of units required to breakeven will increase.

Which of the following costs does not change in total despite changes in volume?

When the total fixed costs increases,the contribution margin per unit ________.

Absorption costing considers fixed selling and administrative costs as product costs.

Fasetech,Inc.has collected the following data.(There are no beginning inventories. ) What is the operating income using absorption costing if 500 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. )

Variable costing prepares the income statement using the traditional format.

One of the assumptions of cost-volume-profit (CVP)analysis is that there are no changes in the ________.

Contribution margin ratio is equal to ________.

Water Rockets Company has provided the following information regarding the two products that it sells: Annual fixed costs are $290,000. How many units must be sold in order for Water Rockets to breakeven,assuming the company sells five jet boats for every two ski boats sold? (Round intermediary dollar amounts to the nearest dollar and round unit amounts up to the next whole unit. )

________ is a "what if" technique that estimates profit or loss results if selling price,costs,volume,or underlying assumptions change.