Exam 20: Cost-Volume-Profit Analysis

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Millar Company produces a single product which it sells for $89 a unit.If the fixed costs of manufacturing and selling the product are $68,400 a month and the variable costs are $57 a unit,which of the below is correct?

(Multiple Choice)

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Question 81

Cost-volume-profit analysis and strategy A manufacturing company experiencing severe financial difficulties has applied for a large government guaranteed loan.As a condition for obtaining the guarantee,the government mandates that the company significantly reduce its annual break-even point.What steps might the company take to achieve the required reduction in its break-even point?

(Essay)

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Question 82

If the monthly sales volume required to break even is $190,000 and monthly fixed costs are $55,900,the contribution margin ratio is closest to:

(Multiple Choice)

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Question 83

If the unit sales price is $12,variable costs are $6 per unit and fixed costs are $36,000 what are the sales in dollars necessary to break-even?

(Multiple Choice)

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Question 84

Product X sells for $35 per unit and has related variable costs of $25 per unit.The fixed costs of producing product X are $65,000 per month.How many units of product X must be sold each month to earn a monthly operating income of $85,000?

(Multiple Choice)

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Question 85

Multiple product companies Pet Park International sells cat food and dog food.Its monthly fixed costs average $620,000.Cat food sales represent 80% of the company's total revenue.Dog food sales constitute the remaining 20%.The company has provided the following information expressed on a per-case basis: (a)The total monthly sales revenue required to break-even is $.(Rounded) (b)The total monthly sales revenue required to earn an operating income of $135,000 is $. (c)The company's margin of safety at a monthly sales level of $2,500,000 is $. (d)If monthly fixed costs increase by $10,000,the break-even point,expressed in sales dollars,will increase to $.

(Essay)

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Question 86

Sales of products with high contribution margins often are described as quantity sales.

(True/False)

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Question 87

Contribution margin ratio is equal to contribution margin per unit divided by unit sales price.

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Question 88

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Millar Company produces a single product which it sells for $89 a unit.If the fixed costs of manufacturing and selling the product are $68,400 a month and the variable costs are $57 a unit,which of the below is correct?

If the monthly sales volume required to break even is $190,000 and monthly fixed costs are $55,900,the contribution margin ratio is closest to:

If the unit sales price is $12,variable costs are $6 per unit and fixed costs are $36,000 what are the sales in dollars necessary to break-even?

Product X sells for $35 per unit and has related variable costs of $25 per unit.The fixed costs of producing product X are $65,000 per month.How many units of product X must be sold each month to earn a monthly operating income of $85,000?

Sales of products with high contribution margins often are described as quantity sales.

Contribution margin ratio is equal to contribution margin per unit divided by unit sales price.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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