Question 1

The following monthly data are available for the Wyatt Corporation and its only product:   The margin of safety for the company during May was:

Accepted Answer

A) $27,000 
B) $56,000 
C) $6,000 
D) $106,000 
A) $27,000 
B) $56,000 
C) $6,000 
D) $106,000

Question 2

Spartan Systems reported total sales of $300,000,at a price of $20 and per unit variable expenses of $12,for the sales of their single product.   What is the amount of contribution margin if sales volume increases by 30%?

Accepted Answer

A) $19,500 
B) $15,000 
C) $156,000 
D) $120,000 
A) $19,500 
B) $15,000 
C) $156,000 
D) $120,000

Question 3

Data concerning Marchman Corporation's single product appear below:   The company is currently selling 4,000 units per month.Fixed expenses are $166,000 per month.Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation.Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $11,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 800 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) increase of $21,800 
B) decrease of $21,800 
C) increase of $79,400 
D) decrease of $6,200 
A) increase of $21,800 
B) decrease of $21,800 
C) increase of $79,400 
D) decrease of $6,200

Question 4

The management of Pacubas Corporation expects sales in July to be $121,000.The company's contribution margin ratio is 64% and its fixed monthly expenses are $40,000.
Required:
Estimate the company's net operating income for July,assuming that the fixed monthly expenses do not change.Show your work!

Accepted Answer

Profit = (CM ratio × Sales)- F

Question 5

Moccio Enterprises,Inc. ,produces and sells a single product whose selling price is $120.00 per unit and whose variable expense is $37.20 per unit.The company's monthly fixed expense is $356,040. Assume the company's target profit is $15,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A) $371,040 
B) $537,739 
C) $701,894 
D) $1,196,903 
A) $371,040 
B) $537,739 
C) $701,894 
D) $1,196,903

Question 6

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will be higher in the company with a higher proportion of fixed expenses in its cost structure.

Accepted Answer

A) True 
 B)False

Question 7

On a cost-volume-profit graph,the revenue line will be shown below the total expense line for any activity level above the break-even point.

Accepted Answer

A) True 
 B)False

Question 8

Reynold Enterprises sells a single product for $25.The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales.The company's net operating income will increase by $10 if one more unit is sold.

Accepted Answer

A) True 
 B)False

Question 9

A cement manufacturer has supplied the following data:   The company's contribution margin ratio is closest to:

Accepted Answer

A) 40.0% 
B) 50.0% 
C) 60.0% 
D) 10.7% 
A) 40.0% 
B) 50.0% 
C) 60.0% 
D) 10.7%

Question 10

A manufacturer of premium wire strippers has supplied the following data:   The company's degree of operating leverage is closest to:

Accepted Answer

A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64 
A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64

Question 11

Hartung Corporation produces and sells a single product.Data concerning that product appear below:   Fixed expenses are $147,000 per month.The company is currently selling 2,000 units per month.The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $13 per unit.In exchange,the sales staff would accept a decrease in their salaries of $22,000 per month.(This is the company's savings for the entire sales staff. )The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units.What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) increase of $16,800 
B) increase of $226,000 
C) increase of $30,000 
D) decrease of $14,000 
A) increase of $16,800 
B) increase of $226,000 
C) increase of $30,000 
D) decrease of $14,000

Question 12

Garcia Veterinary Clinic expects the following operating results next year:   What is Garcia's break-even point next year in sales dollars?

Accepted Answer

A) $240,000 
B) $375,000 
C) $400,000 
D) $420,000 
A) $240,000 
B) $375,000 
C) $400,000 
D) $420,000

Question 13

The Breiden Corporation sells rodaks for $6.00 per unit.Fixed expenses total $37,500 per month and variable expenses are $2.00 per unit.The number of units that must be sold each month to realize a profit of 15% of sales is closest to:

Accepted Answer

A) 9,375 units 
B) 11,029 units 
C) 12,097 units 
D) 9,740 units 
A) 9,375 units 
B) 11,029 units 
C) 12,097 units 
D) 9,740 units

Question 14

Wrobbel Corporation produces and sells a single product.Data concerning that product appear below:   Fixed expenses are $307,000 per month.The company is currently selling 6,000 units per month.
Required:
Management is considering using a new component that would increase the unit variable cost by $2.Since the new component would improve the company's product,the marketing manager predicts that monthly sales would increase by 200 units.What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? Show your work!

Accepted Answer

@#IMG-DLM& Because fixed expenses are no

Question 15

The contribution margin ratio of Baginski Corporation's only product is 53%.The company's monthly fixed expense is $617,980 and the company's monthly target profit is $23,000.The dollar sales to attain that target profit is closest to:

Accepted Answer

A) $1,166,000 
B) $1,209,396 
C) $339,719 
D) $327,529 
A) $1,166,000 
B) $1,209,396 
C) $339,719 
D) $327,529

Question 16

Garth Corporation sells a single product.If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change,then:

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 17

Seiersen Corporation's contribution format income statement for February appears below:   The degree of operating leverage is closest to:

Accepted Answer

A) 10.98 
B) 0.22 
C) 0.09 
D) 4.48 
A) 10.98 
B) 0.22 
C) 0.09 
D) 4.48

Question 18

The selling price of Roscioli Corporation's only product is $210.00 per unit and its variable expense is $75.60 per unit.The company's monthly fixed expense is $537,600.
Required:
Assume the company's monthly target profit is $13,440.Determine the unit sales to attain that target profit.Show your work!

Accepted Answer

@#IMG-DLM& Unit sales to attain target p

Question 19

Maddaloni International,Inc. ,produces and sells a single product.The product sells for $160.00 per unit and its variable expense is $46.40 per unit.The company's monthly fixed expense is $219,248.
Required:
Determine the monthly break-even in total dollar sales.Show your work!

Accepted Answer

@#IMG-DLM& Dollar sales to bre

Question 20

Fost Corporation's contribution margin ratio is 20%.If the degree of operating leverage is 15 at the $225,000 sales level,net operating income at the $225,000 sales level must equal:

Accepted Answer

A) $2,250 
B) $6,750 
C) $3,000 
D) $5,063 
A) $2,250 
B) $6,750 
C) $3,000 
D) $5,063

The following monthly data are available for the Wyatt Corporation and its only product: The margin of safety for the company during May was:

Spartan Systems reported total sales of $300,000,at a price of $20 and per unit variable expenses of $12,for the sales of their single product. What is the amount of contribution margin if sales volume increases by 30%?

The management of Pacubas Corporation expects sales in July to be $121,000.The company's contribution margin ratio is 64% and its fixed monthly expenses are $40,000. Required: Estimate the company's net operating income for July,assuming that the fixed monthly expenses do not change.Show your work!

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will be higher in the company with a higher proportion of fixed expenses in its cost structure.

On a cost-volume-profit graph,the revenue line will be shown below the total expense line for any activity level above the break-even point.

Reynold Enterprises sells a single product for $25.The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales.The company's net operating income will increase by $10 if one more unit is sold.

A cement manufacturer has supplied the following data: The company's contribution margin ratio is closest to:

A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Garcia Veterinary Clinic expects the following operating results next year: What is Garcia's break-even point next year in sales dollars?

The Breiden Corporation sells rodaks for $6.00 per unit.Fixed expenses total $37,500 per month and variable expenses are $2.00 per unit.The number of units that must be sold each month to realize a profit of 15% of sales is closest to:

The contribution margin ratio of Baginski Corporation's only product is 53%.The company's monthly fixed expense is $617,980 and the company's monthly target profit is $23,000.The dollar sales to attain that target profit is closest to:

Garth Corporation sells a single product.If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change,then:

Seiersen Corporation's contribution format income statement for February appears below: The degree of operating leverage is closest to:

Maddaloni International,Inc. ,produces and sells a single product.The product sells for $160.00 per unit and its variable expense is $46.40 per unit.The company's monthly fixed expense is $219,248. Required: Determine the monthly break-even in total dollar sales.Show your work!

Fost Corporation's contribution margin ratio is 20%.If the degree of operating leverage is 15 at the $225,000 sales level,net operating income at the $225,000 sales level must equal:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 6: Cost-Volume-Profit Relationships

The following monthly data are available for the Wyatt Corporation and its only product: The margin of safety for the company during May was:

Spartan Systems reported total sales of $300,000,at a price of $20 and per unit variable expenses of $12,for the sales of their single product. What is the amount of contribution margin if sales volume increases by 30%?

The management of Pacubas Corporation expects sales in July to be $121,000.The company's contribution margin ratio is 64% and its fixed monthly expenses are $40,000. Required: Estimate the company's net operating income for July,assuming that the fixed monthly expenses do not change.Show your work!

In two companies making the same product and with the same total sales and total expenses,the contribution margin ratio will be higher in the company with a higher proportion of fixed expenses in its cost structure.

On a cost-volume-profit graph,the revenue line will be shown below the total expense line for any activity level above the break-even point.

Reynold Enterprises sells a single product for $25.The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales.The company's net operating income will increase by $10 if one more unit is sold.

A cement manufacturer has supplied the following data: The company's contribution margin ratio is closest to:

A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Garcia Veterinary Clinic expects the following operating results next year: What is Garcia's break-even point next year in sales dollars?

The Breiden Corporation sells rodaks for $6.00 per unit.Fixed expenses total $37,500 per month and variable expenses are $2.00 per unit.The number of units that must be sold each month to realize a profit of 15% of sales is closest to:

The contribution margin ratio of Baginski Corporation's only product is 53%.The company's monthly fixed expense is $617,980 and the company's monthly target profit is $23,000.The dollar sales to attain that target profit is closest to:

Garth Corporation sells a single product.If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change,then:

Seiersen Corporation's contribution format income statement for February appears below: The degree of operating leverage is closest to:

Maddaloni International,Inc. ,produces and sells a single product.The product sells for $160.00 per unit and its variable expense is $46.40 per unit.The company's monthly fixed expense is $219,248. Required: Determine the monthly break-even in total dollar sales.Show your work!

Fost Corporation's contribution margin ratio is 20%.If the degree of operating leverage is 15 at the $225,000 sales level,net operating income at the $225,000 sales level must equal:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters