Exam 21: Cost-Volume-Profit Analysis

Groovelex,Inc.has collected the following data for the current year: What is the unit product cost using absorption costing? (Round your answer to the nearest cent. )

Crystal Pools,Inc.has provided the following information for the year. What is the unit product cost using absorption costing?

Answer the following absorption costing questions:

The sales level at which operating income is zero is called the breakeven point.

Answer the following variable costing questions:

Volplex,Inc.produces paper and office supplies and uses the just-in-time inventory system.Currently,the company is using variable costing.Which of the following is true of the effect of costing systems on the financial results of Volplex?

McFadden,Inc.has collected the following data.(There are no beginning inventories. ) What is the ending balance in Finished Goods Inventory using variable costing if 500 units are sold?

Hoppy Cat Toy Company has estimated the following amounts for its next fiscal year: If the company spends an additional $34,000 on advertising,sales volume would increase by 2,900 units.What effect will this decision have on the operating income?

If a company reduces its fixed costs,the operating income will increase by the same amount as the cost reduction.

The fixed manufacturing overhead is considered a product cost in variable costing and a period cost in absorption costing.

Danby,Inc.has the following cost data: Calculate the unit product cost using absorption costing when production is 200 units,400 units,and 800 units.

Ito Company has provided the following information: What is the contribution margin ratio?

Which of the following is considered a period cost in absorption costing?

Badlands,Inc.reports the following information for the year ended December 31: The operating income calculated using variable costing and absorption costing amounted to $10,000 and $13,300,respectively.There were no beginning inventories.Determine the total number of units produced during the year.

Costs that have both variable and fixed components are called ________.

Sensitivity analysis allows managers to see how various business strategies will affect profit levels.

A cost-volume-profit (CVP)graph shows how changes in the level of sales will affect profits.

In its first year of business,Greenlam,Inc.produced 600 units and sold 400 units.If Greenlam uses variable costing,________.

The degree of operating leverage can be measured by ________.

Contribution margin is the amount that contributes to covering variable costs.