Question 1

Assume the following cost behavior data for Graphic Arts Company:   What volume of sales dollars is required to earn a before-tax income of $27,000?

Accepted Answer

A)  $90,000 
B)  $180,000 
C)  $198,000 
D)  $270,000 
A)  $90,000 
B)  $180,000 
C)  $198,000 
D)  $270,000

Question 2

The income statement for Symbiosis Manufacturing Company for 2014 is as follows:   If sales increase by 1,000 units, what will happen to profit?

Accepted Answer

A)  increase by $1,200 
B)  increase by $4,800 
C)  increase by $7,200 
D)  increase by $12,000 
A)  increase by $1,200 
B)  increase by $4,800 
C)  increase by $7,200 
D)  increase by $12,000

Question 3

Assume the following cost behavior data for Graphic Arts Company:   What volume of sales dollars is required to earn an after-tax income of $40,500?

Accepted Answer

A)  $360,000 
B)  $90,000 
C)  $252,000 
D)  $495,000 
A)  $360,000 
B)  $90,000 
C)  $252,000 
D)  $495,000

Question 4

Units to earn target profit equal total fixed costs plus target profit divided by the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 5

Bugatti, Inc. decided to institute an advertising campaign that would cost $75,000. Variable costs will remain at $15 per unit. Bugatti is currently selling 100,000 units of its product at $25 per unit. The marketing department is estimating that there will be a 10 percent increase in sales volume. With all else remaining the same, what will be the result of this decision?

Accepted Answer

A)  An increase in sales of $25,000 
B)  A decrease in operating income of $75,000 
C)  An increase in operating income of $25,000 
D)  none of the above 
A)  An increase in sales of $25,000 
B)  A decrease in operating income of $75,000 
C)  An increase in operating income of $25,000 
D)  none of the above

Question 6

Summersville Production Company had the following projected information for 2014:   What is the profit when one unit more than the break-even point is sold?

Accepted Answer

A)  $60 
B)  $150 
C)  $1,500,150 
D)  $600,060 
A)  $60 
B)  $150 
C)  $1,500,150 
D)  $600,060

Question 7

ChowMein Company is the exclusive Montana distributor of lawn mowers for a small manufacturing company. It sells only one model at $600 per unit and for which ChowMein pays $250. ChowMein's other variable costs amount to $50 per unit. Fixed costs are $2,000. In April, ChowMein sold 15 lawn mowers and it sold 20 in May.
Required:
Calculate the following values:

Accepted Answer

The answer of ChowMein Company is the exclusive Montana distributor...

Question 8

A profit-volume graph

Accepted Answer

A)  measures profit or loss on the horizontal axis. 
B)  illustrates total revenues, total cost, and profits at various sales volumes. 
C)  is not subject to the same limiting assumptions as cost-volume-profit graphs. 
D)  illustrates the relationship between volume and profits. 
A)  measures profit or loss on the horizontal axis. 
B)  illustrates total revenues, total cost, and profits at various sales volumes. 
C)  is not subject to the same limiting assumptions as cost-volume-profit graphs. 
D)  illustrates the relationship between volume and profits.

Question 9

Summersville Production Company had the following projected information for 2014:   What is the break-even point in units?

Accepted Answer

A)  2,000 units 
B)  5,000 units 
C)  3,333 units 
D)  60,000 units 
A)  2,000 units 
B)  5,000 units 
C)  3,333 units 
D)  60,000 units

Question 10

In the cost-volume-profit analysis, income taxes

Accepted Answer

A)  are treated as a fixed cost. 
B)  increase the sales volume required to break even. 
C)  increase the sales volume required to earn a desired profit. 
A)  are treated as a fixed cost. 
B)  increase the sales volume required to break even. 
C)  increase the sales volume required to earn a desired profit.

Question 11

Information about the Harmonious Company's two products includes:   What is the total monthly sales volume in units required to break even when the sales mix in units is 70 percent Product X and 30 percent Product Y?

Accepted Answer

A)  4,333 units 
B)  26,563 units 
C)  8,667 units 
D)  28,667 units 
A)  4,333 units 
B)  26,563 units 
C)  8,667 units 
D)  28,667 units

Question 12

Peyton Place Corporation had the following income statement for 2014:
   Required:

Accepted Answer

The answer of Peyton Place Corporation had the following income...

Question 13

In a profit-volume graph, the slope of the profit line represents

Accepted Answer

A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin. 
A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin.

Question 14

Gigondas Incorporated had the following information:
   Required:

Accepted Answer

The answer of Gigondas Incorporated had the following information:
 ...

Question 15

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

Accepted Answer

A)  $45,000 
B)  $37,500 
C)  $97,500 
D)  $72,500 
A)  $45,000 
B)  $37,500 
C)  $97,500 
D)  $72,500

Question 16

The break-even point is

Accepted Answer

A)  the volume of activity where all fixed costs are recovered. 
B)  where fixed costs equal total variable costs. 
C)  where total revenues equal total costs. 
D)  where total costs equal total contribution margin. 
A)  the volume of activity where all fixed costs are recovered. 
B)  where fixed costs equal total variable costs. 
C)  where total revenues equal total costs. 
D)  where total costs equal total contribution margin.

Question 17

Which of the following statements is TRUE in a cost-volume-profit graph?

Accepted Answer

A)  The slope of the total cost line is dependent on the variable cost per unit. 
B)  The total cost line normally begins at zero. 
C)  The total revenue line typically begins above zero. 
D)  The slope of the total revenue line is the contribution margin per unit. 
A)  The slope of the total cost line is dependent on the variable cost per unit. 
B)  The total cost line normally begins at zero. 
C)  The total revenue line typically begins above zero. 
D)  The slope of the total revenue line is the contribution margin per unit.

Question 18

When using either the equation or the contribution margin approach, the after-tax profit must be converted to a before-tax profit target.

Accepted Answer

A) True 
 B)False

Question 19

Total contribution margin is calculated by subtracting

Accepted Answer

A)  cost of goods sold from total revenues. 
B)  fixed costs from total revenues. 
C)  total manufacturing costs from total revenues. 
D)  total variable costs from total revenues. 
A)  cost of goods sold from total revenues. 
B)  fixed costs from total revenues. 
C)  total manufacturing costs from total revenues. 
D)  total variable costs from total revenues.

Question 20

At a monthly volume of $31,250, a company incurs variable cost of $23,750 and fixed costs of $7,500.
Required:
Determine each of the following values:

Accepted Answer

The answer of At a monthly volume of $31,250, a...

Assume the following cost behavior data for Graphic Arts Company: What volume of sales dollars is required to earn a before-tax income of $27,000?

The income statement for Symbiosis Manufacturing Company for 2014 is as follows: If sales increase by 1,000 units, what will happen to profit?

Assume the following cost behavior data for Graphic Arts Company: What volume of sales dollars is required to earn an after-tax income of $40,500?

Units to earn target profit equal total fixed costs plus target profit divided by the contribution margin ratio.

Summersville Production Company had the following projected information for 2014: What is the profit when one unit more than the break-even point is sold?

A profit-volume graph

Summersville Production Company had the following projected information for 2014: What is the break-even point in units?

In the cost-volume-profit analysis, income taxes

Information about the Harmonious Company's two products includes: What is the total monthly sales volume in units required to break even when the sales mix in units is 70 percent Product X and 30 percent Product Y?

Peyton Place Corporation had the following income statement for 2014: Required:

In a profit-volume graph, the slope of the profit line represents

Gigondas Incorporated had the following information: Required:

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

The break-even point is

Which of the following statements is TRUE in a cost-volume-profit graph?

When using either the equation or the contribution margin approach, the after-tax profit must be converted to a before-tax profit target.

Total contribution margin is calculated by subtracting

At a monthly volume of $31,250, a company incurs variable cost of $23,750 and fixed costs of $7,500. Required: Determine each of the following values:

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 16: Cost-Volume-Profit Analysis

Assume the following cost behavior data for Graphic Arts Company: What volume of sales dollars is required to earn a before-tax income of $27,000?

The income statement for Symbiosis Manufacturing Company for 2014 is as follows: If sales increase by 1,000 units, what will happen to profit?

Assume the following cost behavior data for Graphic Arts Company: What volume of sales dollars is required to earn an after-tax income of $40,500?

Units to earn target profit equal total fixed costs plus target profit divided by the contribution margin ratio.

Summersville Production Company had the following projected information for 2014: What is the profit when one unit more than the break-even point is sold?

A profit-volume graph

Summersville Production Company had the following projected information for 2014: What is the break-even point in units?

In the cost-volume-profit analysis, income taxes

Information about the Harmonious Company's two products includes: What is the total monthly sales volume in units required to break even when the sales mix in units is 70 percent Product X and 30 percent Product Y?

Peyton Place Corporation had the following income statement for 2014: Required:

In a profit-volume graph, the slope of the profit line represents

Gigondas Incorporated had the following information: Required:

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

The break-even point is

Which of the following statements is TRUE in a cost-volume-profit graph?

When using either the equation or the contribution margin approach, the after-tax profit must be converted to a before-tax profit target.

Total contribution margin is calculated by subtracting

At a monthly volume of $31,250, a company incurs variable cost of $23,750 and fixed costs of $7,500. Required: Determine each of the following values:

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters