Exam 19: Cost-Volume-Profit Analysis

For every unit that a company produces and sells above the breakeven point,its profitability is improved (ignoring taxes)by the unit's

Listed below are selected costs of a sports car manufacturer at a production level of 4,000 cars.(a)Identify three variable costs.(b)Support your answer by illustrating the cost behavior pattern per unit and in total as the annual volume of cars produced increases from 4,000 cars to 8,000 cars,for one variable cost.(Note: The production increase is within the relevant range. ) Assume there are 52 weeks in a year and existing workers are working at full capacity.

If direct materials costs are increased,the breakeven point will decrease.

Meredith Marshall owns a home inspection business,offering her services to homeowners.She currently charges $180 per inspection but wants to know if her fee should be raised.She has provided the following data from the past six months:

Margin of safety is the excess of actual sales over break even sales.

In 2014,a small publishing company sold 60,000 copies of Super Travel paperbacks (its only product)at $5 per book;total fixed costs were $15,000;and total variable costs were $3 per book.What is this company's breakeven point in units?

At the breakeven point,the total contribution margin

Dapper Hat Makers is in the business of designing and producing specialty hats.The material used for derbies costs $4.50 per unit,and Dapper pays each of its two full-time employees $250 per week.If the company makes 30 derbies in a week,what is the variable cost per derby?

If targeted sales are 12,000 units,the sales price per unit is $70,fixed costs are $130,000,and variable costs are $40 per unit,then planned profit must be $360,000.

The salary of a retail organization's sales personnel consist of a base amount plus a commission of 5 percent on each sale.Which of the following would properly classify the cost of sales salaries?

Plunda Co.is planning production for the coming year.The information to be used is based on a projection of cost information for the current year.Projections of the following costs are as follows: Plunda Co.sells its product for $90.00 per unit.Compute the following,showing your calculations: a.The breakeven point in sales units b.The breakeven point in sales dollars c.The sales level in both sales units and dollars if a profit of $122,400 is projected

Which of the following costs is most likely to remain fixed within a relevant range?

Which of the following would not require the use of cost behavior analysis?

An organization's normal capacity is the average annual level of operating capacity needed to meet its expected sales demand.

Using or not using the contribution margin for cost-volume-profit computations will not change the resulting amount of breakeven units in a given situation.

Electric power charges are an example of a mixed cost.

Breakeven analysis adjusted for a targeted profit

Which of the following is the realistic measure of what an organization is likely to produce,not what it can produce?

Costs that change,in total,in direct proportion to changes in productive output,or activity,are called variable costs.

The unit contribution margin of a product cannot be more than its selling price.