Exam 7: Cost-Volume-Profit Analysis

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. - What is the number of standard models sold at break-even?

The income statement for Elite Manufacturing Company for the current year is as follows: What is the contribution margin per unit? (Note: Round answer to two decimal places.)

Yerke Company makes jungle gyms and tree houses for children.For jungle gyms, the price is $120 and variable expenses are $90 per unit.For tree houses, the price is $200 and variable expenses are $100.Total fixed expenses are $253,750.Last year, Yerke sold 12,000 gyms and 4,000 tree houses.Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units. - What is the number of tree houses sold at break-even?

Which of the following is true of a contribution margin ratio?

Paney Company makes calendars.Information on cost per unit is as follows: - Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000.The price per calendar is $10.What is the break-even point in sales dollars?

Full Serve Company makes and sells power tools.The budgeted sales are $460,000, the budgeted variable costs are $160,000, and the budgeted fixed cost is $240,000.What is the budgeted contribution margin?

Synergy Company expects the following results for the next accounting period: The sales manager believes that sales could be increased by 500 units if advertising expenditures were increased by $14,000.Which of the following is the effect on operating income if an increase in the advertising expenditures result in an increase in sales by 500 units? (Note: Round the sale price per unit and the variable cost per unit to two decimal places.)

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. - What is the overall sales revenue at break-even?

The cost-volume-profit graph:

The degree of operating leverage is calculated as:

Paney Company makes calendars.Information on cost per unit is as follows: - Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000.The price per calendar is $10.What is the contribution margin per unit?

If the break-even point increases, the margin of safety increases.

The margin of safety in dollars is calculated by:

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 hours? (Round to the nearest whole hour.)

Which of the following equations calculates the number of units to sell to earn a targeted income?

Fixed costs that are not traceable to the segments and would remain even if one of the segments was eliminated are known as _____________________________.

If fixed costs increase, the break-even point decreases.

The contribution margin ratio can be calculated by subtracting the variable cost ratio from one.

The _________________ is the units sold or the revenue earned above the break-even volume.

Operating leverage is the relative mix of