Exam 21: Cost-Volume-Profit Analysis

Schmidt Company sells glass vases at a wholesale price of $3 per unit.The variable cost of manufacture is $1.75 per unit.The fixed costs are $18,000 per month.Schmidt sold 5,500 units during this month.Calculate Schmidt's operating income (loss)for this month.

Tanaka Company has fixed costs of $14,000.Their contribution margin ratio is 40% and ratio of selling expenses to sales is 20%.What is the breakeven point in sales dollars?

Sales mix,or product mix,is the combination of products that make up total sales.

The sales mix provides the weights that make up total product sales.

The breakeven point is the point where the sales revenues are equal to the total variable costs plus the total fixed costs.

Unit product cost calculations using absorption costing do not include ________.

Which of the following is a variable cost?

A company that sells multiple products will always set selling prices such that all products have the same contribution margin.

Variable cost per unit is constant throughout various relevant ranges.

Fixed cost per unit is inversely proportional to the volume of units produced.

Candy Man,Inc.reports the following information: What is the unit product cost using variable costing? (Round your answer to the nearest cent. )

Silver Rex,Inc.has provided the following data for the year ended December 31,2017: Requirements: a)Compute Silver Rex's unit product cost under absorption costing and variable costing. b)Prepare income statements for Silver Rex using absorption costing and variable costing. c)Calculate the balance in Finished Goods Inventory using absorption costing and variable costing. Assume that the production level,costs,and sales prices were the same in the previous year.

When the selling price per unit decreases,the breakeven point ________.

A(n)________ groups cost by behavior;that is,costs are classified as either variable costs or fixed costs.

Following GAAP,the income statement issued to investors and creditors must ________.

Which of the following appears as a line item in a contribution margin income statement?

Variable costing considers direct materials,direct labor,variable manufacturing overhead,and fixed manufacturing overhead as product costs.

Managers can use CVP relationships to conduct sensitivity analysis.

Variable costing considers only ________ costs when determining product costs.

Rustic Replicas is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 43 flintlock muskets per month.The cost data for the muskets are as follows: If Rustic expects to sell 40 units per month,what is his margin of safety expressed in units per month?