Question 1

Sales ´ Contribution Margin is a short-cut of what formula?

Accepted Answer

A)  Sales - (Variable cost ratio ´ Sales) 
B)  Sales - (Fixed Costs + Variable Costs) 
C)  Sales / Fixed Costs 
D)  Fixed Costs / Unit Contribution Margin 
A)  Sales - (Variable cost ratio ´ Sales) 
B)  Sales - (Fixed Costs + Variable Costs) 
C)  Sales / Fixed Costs 
D)  Fixed Costs / Unit Contribution Margin A

Question 2

Assume the following cost behavior data for Portrait 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 A

Question 3

At a price of $32, the estimated monthly sales of a product are 12,000 units.Variable costs include manufacturing costs of $18 and distribution costs of $6.Fixed costs are $40,000 per month.
Required:
Determine each of the following values:

Accepted Answer

The answer of At a price of $32, the estimated...

Question 4

Thomas Company had the following information:  
- How many units need to be sold to produce a before-tax profit of $120,000 using ABC?

Accepted Answer

A)  51,000 units 
B)  36,000 units 
C)  21,000 units 
D)  81,000 units 
A)  51,000 units 
B)  36,000 units 
C)  21,000 units 
D)  81,000 units

Question 5

Assume the following information:   How many units must be sold to generate a before-tax profit of $45,000?

Accepted Answer

A)  3,000 units 
B)  2,500 units 
C)  4,500 units 
D)  3,750 units 
A)  3,000 units 
B)  2,500 units 
C)  4,500 units 
D)  3,750 units

Question 6

Assuming all other things are the same, variable cost per unit must have _______________ if there was an increase in the break-even point.

Accepted Answer

A)  remained the same 
B)  increased first, then decreased 
C)  increased 
D)  depends on the circumstances 
A)  remained the same 
B)  increased first, then decreased 
C)  increased 
D)  depends on the circumstances

Question 7

Peterson Company and Olson Corporation have the following income statements for 2011:   What is the degree of operating leverage for Peterson Company for 2011?

Accepted Answer

A)  2.667 
B)  0.375 
C)  1.667 
D)  1.250 
A)  2.667 
B)  0.375 
C)  1.667 
D)  1.250

Question 8

Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis?

Accepted Answer

A)  the ability to conduct sensitivity analysis of cost or price changes 
B)  the identification of price and efficiency variances 
C)  how many units must be sold to break even 
D)  what is the impact on the break-even point of an increase or decrease in fixed costs 
A)  the ability to conduct sensitivity analysis of cost or price changes 
B)  the identification of price and efficiency variances 
C)  how many units must be sold to break even 
D)  what is the impact on the break-even point of an increase or decrease in fixed costs

Question 9

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. Angel's 2011 break-even sales volume was

Accepted Answer

A)  $36,000. 
B)  $37,500. 
C)  $49,500. 
D)  $54,000. 
A)  $36,000. 
B)  $37,500. 
C)  $49,500. 
D)  $54,000.

Question 10

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 11

On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

Accepted Answer

A)  profit of $1,000. 
B)  profit equal to zero. 
C)  profit equal to fixed costs. 
D)  loss equal to fixed costs. 
A)  profit of $1,000. 
B)  profit equal to zero. 
C)  profit equal to fixed costs. 
D)  loss equal to fixed costs.

Question 12

Assuming all other things are equal, fixed costs must have _______________ if there was a decrease in the break-even point.

Accepted Answer

A)  remained the same 
B)  increased first, then decreased 
C)  increased 
D)  decreased 
A)  remained the same 
B)  increased first, then decreased 
C)  increased 
D)  decreased

Question 13

A decrease in the sales price in the basic cost-volume-profit model would

Accepted Answer

A)  require a recomputation of the gross profit per unit. 
B)  be offset by an increase in unit costs. 
C)  decrease the break-even volume. 
D)  increase the break-even volume. 
A)  require a recomputation of the gross profit per unit. 
B)  be offset by an increase in unit costs. 
C)  decrease the break-even volume. 
D)  increase the break-even volume.

Question 14

Sales mix refers to

Accepted Answer

A)  the different volume of sales achieved during the year. 
B)  the contribution margins achieved on the different products during the year. 
C)  the relative proportions of different products that constitute total sales. 
D)  the mix of variable and fixed costs. 
A)  the different volume of sales achieved during the year. 
B)  the contribution margins achieved on the different products during the year. 
C)  the relative proportions of different products that constitute total sales. 
D)  the mix of variable and fixed costs.

Question 15

Cost-volume-profit models assume that

Accepted Answer

A)  the sales mix may vary among multiple products. 
B)  unit selling prices are constant. 
C)  inventories are dynamic and subject to change. 
D)  the total cost function is quadratic. 
A)  the sales mix may vary among multiple products. 
B)  unit selling prices are constant. 
C)  inventories are dynamic and subject to change. 
D)  the total cost function is quadratic.

Question 16

Dirth Company sells only one product at a regular price of $7.50 per unit.Variable expenses are 60 percent of sales and fixed expenses are $30,000.Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.
- What is the new break-even point in units for Dirth Company when the selling price is $6.00?

Accepted Answer

A)  10,000 units 
B)  6,667 units 
C)  4,000 units 
D)  20,000 units 
A)  10,000 units 
B)  6,667 units 
C)  4,000 units 
D)  20,000 units

Question 17

Thomas Company had the following information:   Suppose Thomas could reduce setup costs by $500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours.How many units must be sold to break even in this case?

Accepted Answer

A)  30,000 units 
B)  25,050 units 
C)  25,650 units 
D)  11,250 units 
A)  30,000 units 
B)  25,050 units 
C)  25,650 units 
D)  11,250 units

Question 18

The Young Manufacturing Company produces the following three products:
   Fixed costs are $76,000 per year.
Fifty percent of all sales in units are hammers, 30 percent are screwdrivers, and 20 percent are saws.
Required:
Calculate the following values:

Accepted Answer

The answer of The Young Manufacturing Company produces the following...

Question 19

The break-even point in units can be calculated using the contribution margin approach in the formula

Accepted Answer

A)  Total Costs / Unit Contribution Margin. 
B)  Total Costs / Fixed Costs. 
C)  Fixed Costs / Selling Price per unit. 
D)  Fixed Costs / Unit Contribution Margin. 
A)  Total Costs / Unit Contribution Margin. 
B)  Total Costs / Fixed Costs. 
C)  Fixed Costs / Selling Price per unit. 
D)  Fixed Costs / Unit Contribution Margin.

Question 20

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in units for Baker Company?

Accepted Answer

A)  375 units 
B)  3,600 units 
C)  250 units 
D)  2,400 units 
A)  375 units 
B)  3,600 units 
C)  250 units 
D)  2,400 units

Sales ´ Contribution Margin is a short-cut of what formula?

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

At a price of $32, the estimated monthly sales of a product are 12,000 units.Variable costs include manufacturing costs of $18 and distribution costs of $6.Fixed costs are $40,000 per month. Required: Determine each of the following values:

Thomas Company had the following information: - How many units need to be sold to produce a before-tax profit of $120,000 using ABC?

Assume the following information: How many units must be sold to generate a before-tax profit of $45,000?

Assuming all other things are the same, variable cost per unit must have _______________ if there was an increase in the break-even point.

Peterson Company and Olson Corporation have the following income statements for 2011: What is the degree of operating leverage for Peterson Company for 2011?

Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis?

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. Angel's 2011 break-even sales volume was

The break-even point is

On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

Assuming all other things are equal, fixed costs must have _______________ if there was a decrease in the break-even point.

A decrease in the sales price in the basic cost-volume-profit model would

Sales mix refers to

Cost-volume-profit models assume that

Thomas Company had the following information: Suppose Thomas could reduce setup costs by $500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours.How many units must be sold to break even in this case?

The Young Manufacturing Company produces the following three products: Fixed costs are $76,000 per year. Fifty percent of all sales in units are hammers, 30 percent are screwdrivers, and 20 percent are saws. Required: Calculate the following values:

The break-even point in units can be calculated using the contribution margin approach in the formula

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in units for Baker Company?

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

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

Sales ´ Contribution Margin is a short-cut of what formula?

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

At a price of $32, the estimated monthly sales of a product are 12,000 units.Variable costs include manufacturing costs of $18 and distribution costs of $6.Fixed costs are $40,000 per month. Required: Determine each of the following values:

Thomas Company had the following information: - How many units need to be sold to produce a before-tax profit of $120,000 using ABC?

Assume the following information: How many units must be sold to generate a before-tax profit of $45,000?

Assuming all other things are the same, variable cost per unit must have _______________ if there was an increase in the break-even point.

Peterson Company and Olson Corporation have the following income statements for 2011: What is the degree of operating leverage for Peterson Company for 2011?

Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis?

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. Angel's 2011 break-even sales volume was

The break-even point is

On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

Assuming all other things are equal, fixed costs must have _______________ if there was a decrease in the break-even point.

A decrease in the sales price in the basic cost-volume-profit model would

Sales mix refers to

Cost-volume-profit models assume that

Thomas Company had the following information: Suppose Thomas could reduce setup costs by $500 per setup and could reduce the number of engineering hours needed to 1,216 2/3 hours.How many units must be sold to break even in this case?

The Young Manufacturing Company produces the following three products: Fixed costs are $76,000 per year. Fifty percent of all sales in units are hammers, 30 percent are screwdrivers, and 20 percent are saws. Required: Calculate the following values:

The break-even point in units can be calculated using the contribution margin approach in the formula

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in units for Baker Company?

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

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