Question 1

___________________________________ is the income statement format that is based on the separation of costs into fixed and variable components.

Accepted Answer

Contributi

Question 2

If a multi-product company simply wants to know the overall break-even point, it is easiest to use the break-even in sales revenue approach.

Accepted Answer

A) True 
 B)False

Question 3

If fixed costs increase, the break-even point in units will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  remain the same; however, contribution per unit will decrease. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  remain the same; however, contribution per unit will decrease.

Question 4

Shorter Company had originally expected to earn operating income of $130,000 in the coming year.Shorter's degree of operating leverage is 2.4.Recently, Shorter revised its plans and now expects to increase sales by 20% next year.What is Shorter's revised expected operating income for the coming year?

Accepted Answer

A)  $192,400 
B)  $156,000 
C)  $312,000 
D)  $130,000 
E)  $62,400 
A)  $192,400 
B)  $156,000 
C)  $312,000 
D)  $130,000 
E)  $62,400

Question 5

__________ is the relative combination of products being sold by a firm.

Accepted Answer

The answer of __________ is the relative combination of products...

Question 6

Sales mix can be expressed in terms of

Accepted Answer

A)  units but not revenues. 
B)  either revenues or units. 
C)  revenues but not units. 
D)  neither units nor revenue. 
A)  units but not revenues. 
B)  either revenues or units. 
C)  revenues but not units. 
D)  neither units nor revenue.

Question 7

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 contribution margin ratio?

Accepted Answer

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

Question 8

Rocha & Noel Company makes and sells dolls.The price is $15 and the variable expense per unit is $10.What is the contribution margin ratio? (Note: Round answer to two decimal places.)

Accepted Answer

A)  62.55% 
B)  37.45% 
C)  55.67% 
D)  33.33% 
E)  60.27% 
A)  62.55% 
B)  37.45% 
C)  55.67% 
D)  33.33% 
E)  60.27%

Question 9

Given the following numbers from Webster Company, match the correct value with its appropriate term.Webster Company sells a product for $20.Unit cost information is as follows:
Webster normally produces 50,000 units and the fixed overhead rate is based on this amount.Fixed selling and administrative expense is $87,000.  
-Variable cost per unit

Accepted Answer

A) $6 
B) 30% 
C) $14 
D) 70% 
E) $290,000
F)14,500 
A) $6 
B) 30% 
C) $14 
D) 70% 
E) $290,000
F)14,500

Question 10

At the break-even point,

Accepted Answer

A)  total revenue equals variable cost. 
B)  total fixed cost equals variable cost. 
C)  total contribution margin equals total fixed cost. 
D)  total sales equals total fixed cost. 
E)  total margin of safety equals variable cost. 
A)  total revenue equals variable cost. 
B)  total fixed cost equals variable cost. 
C)  total contribution margin equals total fixed cost. 
D)  total sales equals total fixed cost. 
E)  total margin of safety equals variable cost.

Question 11

The contribution margin is

Accepted Answer

A)  the difference between sales and variable costs. 
B)  the difference between target income and operating income. 
C)  the difference between operating income and margin of safety. 
D)  equal to sales. 
E)  when total sales equals total costs. 
A)  the difference between sales and variable costs. 
B)  the difference between target income and operating income. 
C)  the difference between operating income and margin of safety. 
D)  equal to sales. 
E)  when total sales equals total costs.

Question 12

If variable expenses decrease and the price increases, the break-even point decreases.

Accepted Answer

A) True 
 B)False

Question 13

Foster Company makes power tools.The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500.What is the break-even point in sales dollars?

Accepted Answer

A)  $350,000 
B)  $420,000 
C)  $650,000 
D)  $780,000 
E)  $567,000 
A)  $350,000 
B)  $420,000 
C)  $650,000 
D)  $780,000 
E)  $567,000

Question 14

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.How many units must be sold to yield targeted income of $36,000?

Accepted Answer

A)  6,000 
B)  5,833 
C)  8,167 
D)  14,000 
E)  12,000 
A)  6,000 
B)  5,833 
C)  8,167 
D)  14,000 
E)  12,000

Question 15

Firm X and Firm Y are competitors within the same industry.Firm X produces its product using large amounts of direct labor.Firm Y has replaced direct labor with investment in machinery.Projected sales for both firms are 15% less than in the prior year.Which statement regarding projected profits is true?

Accepted Answer

A)  Firm X will lose more profit than Firm Y. 
B)  Firm Y will lose more profit than Firm X. 
C)  Firm X and Firm Y will lose the same amount of profit. 
D)  Neither Firm X nor Firm Y will lose profit. 
A)  Firm X will lose more profit than Firm Y. 
B)  Firm Y will lose more profit than Firm X. 
C)  Firm X and Firm Y will lose the same amount of profit. 
D)  Neither Firm X nor Firm Y will lose profit.

Question 16

To determine the number of units that must be sold to earn a target operating income, one can use the equation for operating income and replace the operating income term with the target operating income.

Accepted Answer

A) True 
 B)False

Question 17

______________________ are those fixed costs that can be traced to each segment and would be avoided if the segment did not exist.

Accepted Answer

Direct fix

Question 18

The _________________________ is the proportion of each sales dollar available to cover fixed costs and provide for profit.

Accepted Answer

contributi

Question 19

Managers can use CVP analysis to handle risk and uncertainty.

Accepted Answer

A) True 
 B)False

Question 20

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 ratio?

Accepted Answer

A)  36% 
B)  40% 
C)  50% 
D)  60% 
E)  44% 
A)  36% 
B)  40% 
C)  50% 
D)  60% 
E)  44%

___________________________________ is the income statement format that is based on the separation of costs into fixed and variable components.

If a multi-product company simply wants to know the overall break-even point, it is easiest to use the break-even in sales revenue approach.

If fixed costs increase, the break-even point in units will

__________ is the relative combination of products being sold by a firm.

Sales mix can be expressed in terms of

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 contribution margin ratio?

Rocha & Noel Company makes and sells dolls.The price is $15 and the variable expense per unit is $10.What is the contribution margin ratio? (Note: Round answer to two decimal places.)

At the break-even point,

The contribution margin is

If variable expenses decrease and the price increases, the break-even point decreases.

Foster Company makes power tools.The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500.What is the break-even point in sales dollars?

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.How many units must be sold to yield targeted income of $36,000?

To determine the number of units that must be sold to earn a target operating income, one can use the equation for operating income and replace the operating income term with the target operating income.

______________________ are those fixed costs that can be traced to each segment and would be avoided if the segment did not exist.

The _________________________ is the proportion of each sales dollar available to cover fixed costs and provide for profit.

Managers can use CVP analysis to handle risk and uncertainty.

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 ratio?

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

Exam 7: Cost-Volume-Profit Analysis

___________________________________ is the income statement format that is based on the separation of costs into fixed and variable components.

If a multi-product company simply wants to know the overall break-even point, it is easiest to use the break-even in sales revenue approach.

If fixed costs increase, the break-even point in units will

__________ is the relative combination of products being sold by a firm.

Sales mix can be expressed in terms of

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 contribution margin ratio?

Rocha & Noel Company makes and sells dolls.The price is $15 and the variable expense per unit is $10.What is the contribution margin ratio? (Note: Round answer to two decimal places.)

At the break-even point,

The contribution margin is

If variable expenses decrease and the price increases, the break-even point decreases.

Foster Company makes power tools.The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500.What is the break-even point in sales dollars?

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.How many units must be sold to yield targeted income of $36,000?

To determine the number of units that must be sold to earn a target operating income, one can use the equation for operating income and replace the operating income term with the target operating income.

______________________ are those fixed costs that can be traced to each segment and would be avoided if the segment did not exist.

The _________________________ is the proportion of each sales dollar available to cover fixed costs and provide for profit.

Managers can use CVP analysis to handle risk and uncertainty.

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 ratio?

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