Question 1

Match each item with the correct statement below.
-The relative combination of products (or services) being sold by an organization.

Accepted Answer

A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix 
A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix

Question 2

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care.
-What is the variable cost ratio?

Accepted Answer

A)  50% 
B)  40% 
C)  33% 
D)  67% 
E)  60% 
A)  50% 
B)  40% 
C)  33% 
D)  67% 
E)  60%

Question 3

Match each item with the correct statement below.
-The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume.

Accepted Answer

A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix 
A) break-even point 
B) Common fixed expenses 
C) Contribution margin 
D) Direct fixed expenses 
E) Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix

Question 4

Omega Company makes and sells jungle gyms and tree houses for children.For jungle gyms, the price is $150 and variable expenses are $100 per unit.For tree houses, the price is $180 and variable expenses are $120.Total fixed expenses are $215,250.Last year, Omega sold 10,000 gyms and 6,000 tree houses.Using the lowest whole numbers, what is the sales mix of gyms and tree houses?

Accepted Answer

A)  4:1 
B)  5:3 
C)  3:2 
D)  2:3 
E)  1:4 
A)  4:1 
B)  5:3 
C)  3:2 
D)  2:3 
E)  1:4

Question 5

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care.
-What is the break-even point in sales dollars?

Accepted Answer

A)  $130,000 
B)  $195,000 
C)  $252,000 
D)  $420,000 
E)  $342,000 
A)  $130,000 
B)  $195,000 
C)  $252,000 
D)  $420,000 
E)  $342,000

Question 6

In order for the break-even computation to be meaningful to management, sales mix should be computed using the

Accepted Answer

A)  expected mix. 
B)  most desirable mix. 
C)  least desirable mix. 
D)  traditional mix. 
E)  average mix over the past 5 years. 
A)  expected mix. 
B)  most desirable mix. 
C)  least desirable mix. 
D)  traditional mix. 
E)  average mix over the past 5 years.

Question 7

Workshape Company sells office chairs at $400 per unit, incurs variable cost per unit of $150, and has a total fixed expense of $40,000.How many units must be sold to achieve a target operating income of $60,000?

Accepted Answer

A)  200 units 
B)  400 units 
C)  180 units 
D)  450 units 
E)  275 units 
A)  200 units 
B)  400 units 
C)  180 units 
D)  450 units 
E)  275 units

Question 8

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care.
-What is the budgeted operating income?

Accepted Answer

A)  $342,000 
B)  $174,000 
C)  $168,000 
D)  $90,000 
E)  $420,000 
A)  $342,000 
B)  $174,000 
C)  $168,000 
D)  $90,000 
E)  $420,000

Question 9

A company provided the following data: 
 
How many units must be sold to earn a profit of $40,000?

Accepted Answer

A)  8,500 
B)  23,333 
C)  22,000 
D)  2,000 
E)  20,000 
A)  8,500 
B)  23,333 
C)  22,000 
D)  2,000 
E)  20,000

Question 10

A company provided the following data:

- What is the break-even point in units?

Accepted Answer

A)  20,000 
B)  10,000 
C)  6,667 
D)  13,333 
E)  12,000 
A)  20,000 
B)  10,000 
C)  6,667 
D)  13,333 
E)  12,000

Question 11

Direct fixed expenses are the fixed costs that are not traceable to the segments and would remain even if one of the segments was eliminated.

Accepted Answer

A) True 
 B)False

Question 12

Variable expense per unit consists only of direct materials, direct labor, and variable overhead.

Accepted Answer

A) True 
 B)False

Question 13

The _________________________________ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

Accepted Answer

degree of

Question 14

Standlar Company makes wireless speakers.The standard model price is $360 and variable expenses are $210.The deluxe model price is $500 and variable expenses are $300.The superior model price is $1,600 and variable expense per unit is $600.Total fixed expenses are $300,000.Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold.
-Using the sales mix to form a package, what is the total package contribution margin?

Accepted Answer

A)  $2,000 
B)  $1,110 
C)  $3,000 
D)  $900 
E)  $1,200 
A)  $2,000 
B)  $1,110 
C)  $3,000 
D)  $900 
E)  $1,200

Question 15

The break-even point in sales dollars is equal to the break-even units multiplied by cost.

Accepted Answer

A) True 
 B)False

Question 16

Total contribution margin divided by total sales is the

Accepted Answer

A)  indifference point. 
B)  margin of safety. 
C)  sales ratio. 
D)  target income. 
E)  contribution margin ratio. 
A)  indifference point. 
B)  margin of safety. 
C)  sales ratio. 
D)  target income. 
E)  contribution margin ratio.

Question 17

If actual sales equal break-even sales

Accepted Answer

A)  the margin of safety is negative. 
B)  the margin of safety is positive. 
C)  it is impossible to say anything about the margin of safety. 
D)  the margin of safety equals zero. 
E)  the margin of safety is negative or positive. 
A)  the margin of safety is negative. 
B)  the margin of safety is positive. 
C)  it is impossible to say anything about the margin of safety. 
D)  the margin of safety equals zero. 
E)  the margin of safety is negative or positive.

Question 18

Match each item with the correct statement below.
-measured in units sold

Accepted Answer

A) horizontal-axis of CVP graph 
B) vertical-axis of CVP graph 
C) slope of revenue line 
D) slope of cost line 
E) point where the total revenue line and the total cost line intersect 
A) horizontal-axis of CVP graph 
B) vertical-axis of CVP graph 
C) slope of revenue line 
D) slope of cost line 
E) point where the total revenue line and the total cost line intersect

Question 19

The linear equation for total cost is (Unit variable cost × Units) + Fixed cost.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following equations calculates the operating income?

Accepted Answer

A)  Operating Income = (Price × Units Sold) − (Unit Variable Cost × Units Sold) - Fixed Cost 
B)  Operating Income = Sales − Fixed Cost 
C)  Operating Income = (Unit Variable Cost × Units Sold) − Fixed Cost 
D)  Operating Income = Sales − Total Contribution Margin 
E)  Operating Income = (Unit Variable Cost × Units Sold) − (Price × Units Sold) + Total Contribution Margin 
A)  Operating Income = (Price × Units Sold) − (Unit Variable Cost × Units Sold) - Fixed Cost 
B)  Operating Income = Sales − Fixed Cost 
C)  Operating Income = (Unit Variable Cost × Units Sold) − Fixed Cost 
D)  Operating Income = Sales − Total Contribution Margin 
E)  Operating Income = (Unit Variable Cost × Units Sold) − (Price × Units Sold) + Total Contribution Margin

Match each item with the correct statement below. -The relative combination of products (or services) being sold by an organization.

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the variable cost ratio?

Match each item with the correct statement below. -The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume.

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the break-even point in sales dollars?

In order for the break-even computation to be meaningful to management, sales mix should be computed using the

Workshape Company sells office chairs at $400 per unit, incurs variable cost per unit of $150, and has a total fixed expense of $40,000.How many units must be sold to achieve a target operating income of $60,000?

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the budgeted operating income?

A company provided the following data: How many units must be sold to earn a profit of $40,000?

A company provided the following data: - What is the break-even point in units?

Direct fixed expenses are the fixed costs that are not traceable to the segments and would remain even if one of the segments was eliminated.

Variable expense per unit consists only of direct materials, direct labor, and variable overhead.

The _________________________________ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

The break-even point in sales dollars is equal to the break-even units multiplied by cost.

Total contribution margin divided by total sales is the

If actual sales equal break-even sales

Match each item with the correct statement below. -measured in units sold

The linear equation for total cost is (Unit variable cost × Units) + Fixed cost.

Which of the following equations calculates the operating income?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 7: Cost-Volume-Profit Analysis

Match each item with the correct statement below. -The relative combination of products (or services) being sold by an organization.

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the variable cost ratio?

Match each item with the correct statement below. -The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume.

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the break-even point in sales dollars?

In order for the break-even computation to be meaningful to management, sales mix should be computed using the

Workshape Company sells office chairs at $400 per unit, incurs variable cost per unit of $150, and has a total fixed expense of $40,000.How many units must be sold to achieve a target operating income of $60,000?

Pauley Company provides home health care.Pauley charges $35/hour for professional care.Variable costs are $21/hour and fixed costs are $78,000.Next year, Pauley expects to charge out 12,000 hours of home health care. -What is the budgeted operating income?

A company provided the following data: How many units must be sold to earn a profit of $40,000?

A company provided the following data: - What is the break-even point in units?

Direct fixed expenses are the fixed costs that are not traceable to the segments and would remain even if one of the segments was eliminated.

Variable expense per unit consists only of direct materials, direct labor, and variable overhead.

The _________________________________ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

The break-even point in sales dollars is equal to the break-even units multiplied by cost.

Total contribution margin divided by total sales is the

If actual sales equal break-even sales

Match each item with the correct statement below. -measured in units sold

The linear equation for total cost is (Unit variable cost × Units) + Fixed cost.

Which of the following equations calculates the operating income?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters