Exam 19: Cost-Volume-Profit Analysis

Using the contribution margin approach,find the breakeven point in units if the selling price per unit is $10,the variable cost per unit is $6,and the fixed costs are $9,000.

The following graphical breakeven analysis is for Nicronea's new line of desktop computers.Questions related to the graph should be answered in the spaces provided. a.Production at point J would be at a __________. b.The area depicting profitable operations is __________. c.The fixed costs line is depicted by letters __________. d.The breakeven point for sales units is at letter __________. e.Letter A represents __________. f.The line H-B represents what CVP element? ___________. g.Total cost of operations is reflected in line __________.

An organization's practical capacity is its theoretical or ideal capacity reduced by normal and anticipated work stoppages,such as machine breakdowns.

Myrid Inc.sells each crystal goblet that it produces for $75.The contribution margin per goblet is $20.Total monthly fixed costs are estimated to be $82,600.How many units should Myrid sell in a month to breakeven? (Round your answer to the nearest whole number. )

How many total dollars of sales must Windblow Company sell to break even,if the selling price per unit is $10,variable costs are $5.00 per unit,and fixed costs are $10,000?

Ryan's Landscaping sells a quality brand of hoes,shovels,and rakes in a sales mix of 2:4:2.The company's fixed costs are $61,600.Product data include the following: a.Compute the weighted-average contribution margin. b.Determine the weighted-average breakeven point. c.Calculate the breakeven point for each product. d.Determine the breakeven point in sales dollars.

Contribution margin income statement helps managers to view revenue and cost relationships on a per unit basis or as a percentage of sales.

a.Provide two different ways of computing breakeven units: one with the contribution margin in the computation and one without the contribution margin. b.Compare and contrast the two different methods of computing breakeven units.Does the use of the contribution margin alter the resulting number of breakeven units? Why or why not? c.Comment on how the contribution margin affects the computation of breakeven units.Would an increase in the contribution margin increase or decrease the number of breakeven units required?

Which of the following statements most accurately explains the behavior of costs?

In a breakeven graph,the slope the total cost line is dependent on the variable costs per unit.

A product line's contribution margin represents its contribution to paying off variable costs and to generating a profit.

Lakeside has gathered the following data in order to calculate the weighted-average breakeven point: The weighted-average breakeven point is

Contribution margin is calculated by deducting variable costs from sales.

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

If the contribution margin on a new product line is $15,fixed costs are $165,000,and the total market for the product is 22,000 units,then the breakeven analysis would recommend that the company

Cristy Lake Inc.sold goods worth $144,000 in 2014.It sells each unit for $5.50 and has a 30 percent contribution margin.The company's fixed costs amount to $33,000. Calculate Cristy's breakeven point in units.

Which of the following is not an assumption underlying cost-volume-profit analysis?

In cost-volume-profit analysis,sales revenue is computed by multiplying units sold by the selling price per unit,and the targeted profit is projected by management.

Theoretical capacity reduced by normal and expected work stoppages is called

If fixed costs are $24,000,variable costs are $25 per unit,and the product sells for $45,the total contribution margin at the breakeven point is $24,000.