Question 1

Quinn Corporation had the following income statement for 2011:   What is the degree of operating leverage for Quinn Corporation for 2011?

Accepted Answer

A)  0.333 
B)  2.000 
C)  3.000 
D)  2.333 
A)  0.333 
B)  2.000 
C)  3.000 
D)  2.333

Question 2

Place Corporation had the following income statement for 2011:
   Required:

Accepted Answer

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

Question 3

The income statement for Thomas Manufacturing Company for 2006 is as follows:   What is the contribution margin ratio?

Accepted Answer

A)  40% 
B)  60% 
C)  100% 
D)  30% 
A)  40% 
B)  60% 
C)  100% 
D)  30%

Question 4

Sarah Smith, a sole proprietor, has the following projected figures for next year:   What is the contribution margin ratio?

Accepted Answer

A)  0.300 
B)  1.429 
C)  0.429 
D)  3.333 
A)  0.300 
B)  1.429 
C)  0.429 
D)  3.333

Question 5

Malone Printing Company projected the following information for next year:   How many units must be sold to obtain an after-tax profit of $67,500?

Accepted Answer

A)  3,750 units 
B)  7,750 units 
C)  5,625 units 
D)  5,167 units 
A)  3,750 units 
B)  7,750 units 
C)  5,625 units 
D)  5,167 units

Question 6

The following data pertain to the three products produced by Alberts Corporation:   Fixed costs are $90,000 per month.
Sixty percent of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C.What is the monthly break-even point for total units?

Accepted Answer

A)  45,000 units 
B)  36,000 units 
C)  60,000 units 
D)  180,000 units 
A)  45,000 units 
B)  36,000 units 
C)  60,000 units 
D)  180,000 units

Question 7

Figure 16 - 1 The Kringel Company provides the following information:
  
-Refer to Figure 16-1.What is the net income for Kringel?

Accepted Answer

A)  $500,000 
B)  $200,000 
C)  $250,000 
D)  $50,000 
A)  $500,000 
B)  $200,000 
C)  $250,000 
D)  $50,000

Question 8

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 sales dollars for Baker Company?

Accepted Answer

A)  $3,600 
B)  $5,400 
C)  $15,000 
D)  $9,000 
A)  $3,600 
B)  $5,400 
C)  $15,000 
D)  $9,000

Question 9

The Valdez Mug Company manufactures plastic mugs that sell to wholesalers for $4.00 each.Variable and fixed costs are as follows:
   Valdez Mug produced and sold 10,000 cups during April 2011.There were no beginning or ending inventories.
Required:

Accepted Answer

The answer of The Valdez Mug Company manufactures plastic mugs...

Question 10

Urban Incorporated had the following information:   
-How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Accepted Answer

A)  13,250 units 
B)  11,500 units 
C)  14,000 units 
D)  7,500 units 
A)  13,250 units 
B)  11,500 units 
C)  14,000 units 
D)  7,500 units

Question 11

Figure 16 - 1 The Kringel Company provides the following information:
  
-Refer to Figure 16-1.What is the variable cost per unit for Kringel?

Accepted Answer

A)  $0.85 
B)  $1.25 
C)  $0.40 
D)  200,000 units 
A)  $0.85 
B)  $1.25 
C)  $0.40 
D)  200,000 units

Question 12

The margin of safety is

Accepted Answer

A)  the number of units that need to be sold to achieve a profit target. 
B)  the amount of units expected to be sold above the break-even level. 
C)  the sales dollars needed to cover fixed costs. 
D)  the use of fixed costs to extract higher percentage changes in profits as sales volume changes. 
A)  the number of units that need to be sold to achieve a profit target. 
B)  the amount of units expected to be sold above the break-even level. 
C)  the sales dollars needed to cover fixed costs. 
D)  the use of fixed costs to extract higher percentage changes in profits as sales volume changes.

Question 13

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 sales dollar level is needed to obtain a before-tax profit of $60,000 when the selling price is $6.00 per unit?

Accepted Answer

A)  $360,000 
B)  $120,000 
C)  $72,000 
D)  $90,000 
A)  $360,000 
B)  $120,000 
C)  $72,000 
D)  $90,000

Question 14

Figure 16 - 1 The Kringel Company provides the following information:
  
-Refer to Figure 16-1.What is the total contribution margin for Kringel?

Accepted Answer

A)  $500,000 
B)  $200,000 
C)  $250,000 
D)  $50,000 
A)  $500,000 
B)  $200,000 
C)  $250,000 
D)  $50,000

Question 15

When a company sells more units than the break-even point,

Accepted Answer

A)  it moves above the relevant range. 
B)  profits are positive. 
C)  there are no new variable costs incurred. 
D)  profits are negative. 
A)  it moves above the relevant range. 
B)  profits are positive. 
C)  there are no new variable costs incurred. 
D)  profits are negative.

Question 16

Patricia Company produces two products, X and Y, which account for 60 percent and 40 percent, respectively, of total sales dollars.Contribution margin ratios are 50 percent for X and 25 percent for Y.Total fixed costs are $120,000.What is Patricia's break-even point in sales dollars?

Accepted Answer

A)  $300,000 
B)  $328,767 
C)  $342,856 
D)  $375,000 
A)  $300,000 
B)  $328,767 
C)  $342,856 
D)  $375,000

Question 17

Information about the Harmon Company's two products includes:   If the sales mix in units is 50 percent Product X and 50 percent Product Y, the monthly break-even total sales dollars is

Accepted Answer

A)  $150,000. 
B)  $450,000. 
C)  $510,000. 
D)  $630,000. 
A)  $150,000. 
B)  $450,000. 
C)  $510,000. 
D)  $630,000.

Question 18

Which of the following equations is CORRECT?

Accepted Answer

A)  Sales revenues = Variable expenses - (Fixed expenses + Operating income) 
B)  Sales revenues - Variable expenses - Fixed expenses = Operating income 
C)  Sales revenues + Variable expenses + Fixed expenses = Operating income 
D)  Sales revenues - Fixed expenses = Variable expenses - Operating income 
A)  Sales revenues = Variable expenses - (Fixed expenses + Operating income) 
B)  Sales revenues - Variable expenses - Fixed expenses = Operating income 
C)  Sales revenues + Variable expenses + Fixed expenses = Operating income 
D)  Sales revenues - Fixed expenses = Variable expenses - Operating income

Question 19

The Allen Company had the following income statement for the month of July 2011:  
- Allen Company's break-even sales volume is

Accepted Answer

A)  20,000 units. 
B)  7,000 units. 
C)  11,211 units. 
D)  10,000 units. 
A)  20,000 units. 
B)  7,000 units. 
C)  11,211 units. 
D)  10,000 units.

Question 20

The total revenue line rises with a slope equal to

Accepted Answer

A)  the selling price. 
B)  the contribution margin. 
C)  the variable cost per unit. 
D)  none of these. 
A)  the selling price. 
B)  the contribution margin. 
C)  the variable cost per unit. 
D)  none of these.

Quinn Corporation had the following income statement for 2011: What is the degree of operating leverage for Quinn Corporation for 2011?

Place Corporation had the following income statement for 2011: Required:

The income statement for Thomas Manufacturing Company for 2006 is as follows: What is the contribution margin ratio?

Sarah Smith, a sole proprietor, has the following projected figures for next year: What is the contribution margin ratio?

Malone Printing Company projected the following information for next year: How many units must be sold to obtain an after-tax profit of $67,500?

The following data pertain to the three products produced by Alberts Corporation: Fixed costs are $90,000 per month. Sixty percent of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C.What is the monthly break-even point for total units?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the net income for Kringel?

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 sales dollars for Baker Company?

The Valdez Mug Company manufactures plastic mugs that sell to wholesalers for $4.00 each.Variable and fixed costs are as follows: Valdez Mug produced and sold 10,000 cups during April 2011.There were no beginning or ending inventories. Required:

Urban Incorporated had the following information: -How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the variable cost per unit for Kringel?

The margin of safety is

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the total contribution margin for Kringel?

When a company sells more units than the break-even point,

Patricia Company produces two products, X and Y, which account for 60 percent and 40 percent, respectively, of total sales dollars.Contribution margin ratios are 50 percent for X and 25 percent for Y.Total fixed costs are $120,000.What is Patricia's break-even point in sales dollars?

Information about the Harmon Company's two products includes: If the sales mix in units is 50 percent Product X and 50 percent Product Y, the monthly break-even total sales dollars is

Which of the following equations is CORRECT?

The Allen Company had the following income statement for the month of July 2011: - Allen Company's break-even sales volume is

The total revenue line rises with a slope equal to

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

Quinn Corporation had the following income statement for 2011: What is the degree of operating leverage for Quinn Corporation for 2011?

Place Corporation had the following income statement for 2011: Required:

The income statement for Thomas Manufacturing Company for 2006 is as follows: What is the contribution margin ratio?

Sarah Smith, a sole proprietor, has the following projected figures for next year: What is the contribution margin ratio?

Malone Printing Company projected the following information for next year: How many units must be sold to obtain an after-tax profit of $67,500?

The following data pertain to the three products produced by Alberts Corporation: Fixed costs are $90,000 per month. Sixty percent of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C.What is the monthly break-even point for total units?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the net income for Kringel?

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 sales dollars for Baker Company?

The Valdez Mug Company manufactures plastic mugs that sell to wholesalers for $4.00 each.Variable and fixed costs are as follows: Valdez Mug produced and sold 10,000 cups during April 2011.There were no beginning or ending inventories. Required:

Urban Incorporated had the following information: -How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the variable cost per unit for Kringel?

The margin of safety is

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the total contribution margin for Kringel?

When a company sells more units than the break-even point,

Patricia Company produces two products, X and Y, which account for 60 percent and 40 percent, respectively, of total sales dollars.Contribution margin ratios are 50 percent for X and 25 percent for Y.Total fixed costs are $120,000.What is Patricia's break-even point in sales dollars?

Information about the Harmon Company's two products includes: If the sales mix in units is 50 percent Product X and 50 percent Product Y, the monthly break-even total sales dollars is

Which of the following equations is CORRECT?

The Allen Company had the following income statement for the month of July 2011: - Allen Company's break-even sales volume is

The total revenue line rises with a slope equal to

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