Question 1

A company that makes organic fertilizer has supplied the following data:  
-The company's unit contribution margin is closest to:

Accepted Answer

A)  $4.50 
B)  $6.90 
C)  $3.60 
D)  $4.20 
A)  $4.50 
B)  $6.90 
C)  $3.60 
D)  $4.20 C

Question 2

Sullens Inc, which produces and sells a single product, has provided its contribution format income statement for July.  
-If the company sells 8,600 units, its total contribution margin should be closest to:

Accepted Answer

A)  $113,400 
B)  $111,800 
C)  $110,500 
D)  $24,788 
A)  $113,400 
B)  $111,800 
C)  $110,500 
D)  $24,788 B

Question 3

Data concerning Vogelgesang Corporation's single product appear below:  
The break-even in monthly dollar sales is closest to:

Accepted Answer

A)  $850,000 
B)  $527,000 
C)  $921,281 
D)  $1,386,842 
A)  $850,000 
B)  $527,000 
C)  $921,281 
D)  $1,386,842 A

Question 4

Bello Corporation produces and sells two products. In the most recent month, Product D99P had sales of $33,000 and variable expenses of $15,840. Product G71P had sales of $42,000 and variable expenses of $4,410. The fixed expenses of the entire company were $49,790.
-If the sales mix were to shift toward Product D99P with total sales remaining constant, the overall break-even point for the entire company:

Accepted Answer

A)  would not change. 
B)  would increase. 
C)  could increase or decrease. 
D)  would decrease. 
A)  would not change. 
B)  would increase. 
C)  could increase or decrease. 
D)  would decrease.

Question 5

Hooper Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products:   The company's total monthly fixed cost is $15,000.
-The break-even in sales dollars for the expected sales mix is closest to:

Accepted Answer

A)  $160,772 
B)  $95,178 
C)  $109,091 
D)  $175,644 
A)  $160,772 
B)  $95,178 
C)  $109,091 
D)  $175,644

Question 6

Steckelberg Inc. produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $54.00 per unit. The fixed expense is $154,560 per month. The break-even in monthly unit sales is closest to:

Accepted Answer

A)  1,610 
B)  1,030 
C)  1,834 
D)  2,862 
A)  1,610 
B)  1,030 
C)  1,834 
D)  2,862

Question 7

Boettner Corporation produces and sells a single product. In April, the company sold 9,700 units. Its total sales were $543,200, its total variable expenses were $329,800, and its total fixed expenses were $182,200.
Required:
a. Construct the company's contribution format income statement for April in good form.
b. Redo the company's contribution format income statement assuming that the company sells 10,100 units.

Accepted Answer

The answer of Boettner Corporation produces and sells a single...

Question 8

All other things the same, a decrease in variable expense per unit will reduce the break-even point.

Accepted Answer

A) True 
 B)False

Question 9

The following is last month's contribution format income statement:  
What is the company's degree of operating leverage?

Accepted Answer

A)  0.125 
B)  8.0 
C)  3.0 
D)  0.333 
A)  0.125 
B)  8.0 
C)  3.0 
D)  0.333

Question 10

Austin Manufacturing had the following operating data for the year just ended.  
Management plans to improve the quality of its only product by: (1) replacing a component that costs $3.50 with a higher-grade component that costs $5.50; and (2) renting a packing machine for $18,000 a year. If the desired target profit is $288,000, the company must sell:

Accepted Answer

A)  19,300 units 
B)  21,316 units 
C)  22,500 units 
D)  20,842 units 
A)  19,300 units 
B)  21,316 units 
C)  22,500 units 
D)  20,842 units

Question 11

Forest Corporation has prepared the following budgeted data based on a sales forecast of $3,000,000:  
What would be the amount of dollar sales at the break-even point?

Accepted Answer

A)  $1,125,000 
B)  $2,000,000 
C)  $2,650,000 
D)  $1,750,000 
A)  $1,125,000 
B)  $2,000,000 
C)  $2,650,000 
D)  $1,750,000

Question 12

Seyal Inc.'s contribution margin ratio is 55% and its fixed monthly expenses are $34,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $94,000?

Accepted Answer

A)  $17,700 
B)  $60,000 
C)  $8,300 
D)  $51,700 
A)  $17,700 
B)  $60,000 
C)  $8,300 
D)  $51,700

Question 13

Yundt Corporation produces and sells a single product. Data concerning that product appear below:   
Required:
Determine the monthly break-even in total dollar sales. Show your work!

Accepted Answer

@#IMG-DLM& Dollar sales to bre

Question 14

Fietsam Corporation's only product sells for $120 per unit. Its current sales are 43,400 units and its break-even sales are 37,324 units.
Required:
Compute the margin of safety in both dollars and as a percentage of sales.

Accepted Answer

The answer of Fietsam Corporation's only product sells for $120...

Question 15

Isaza Corporation produces and sells two products. In the most recent month, Product U82U had sales of $28,000 and variable expenses of $13,440. Product P89W had sales of $18,000 and variable expenses of $7,260. And the fixed expenses of the entire company were $24,650. If the sales mix were to shift toward Product U82U with total sales remaining constant, the overall break-even point for the entire company:

Accepted Answer

A)  would decrease. 
B)  would not change. 
C)  could increase or decrease. 
D)  would increase. 
A)  would decrease. 
B)  would not change. 
C)  could increase or decrease. 
D)  would increase.

Question 16

Boening Enterprises, Inc., produces and sells a single product whose selling price is $130.00 per unit and whose variable expense is $39.00 per unit. The company's monthly fixed expense is $509,600.
-Assume the company's monthly target profit is $22,000. The dollar sales to attain that target profit is closest to:

Accepted Answer

A)  $1,021,010 
B)  $759,429 
C)  $1,772,000 
D)  $531,600 
A)  $1,021,010 
B)  $759,429 
C)  $1,772,000 
D)  $531,600

Question 17

At the break-even point, variable expenses and fixed expenses are equal.

Accepted Answer

A) True 
 B)False

Question 18

Pedaci Corporation produces and sells a single product. Data concerning that product appear below:  
-Assume the company's monthly target profit is $15,000. The unit sales to attain that target profit is closest to:

Accepted Answer

A)  3,212 
B)  5,265 
C)  8,235 
D)  5,571 
A)  3,212 
B)  5,265 
C)  8,235 
D)  5,571

Question 19

Finestra Corporation produces a single product that it currently sells for $10. Fixed expenses are $120,000 for the year and variable expenses are $6 per unit. In addition, Finestra's salespersons are paid a commission of 10% of their sales.
-A customer has just approached Finestra to make a special, one-time purchase of 10,000 units. These units would not be sold by the salespeople, and therefore no commission would have to be paid. The price Finestra would have to charge on this special order to earn an additional profit of $40,000 is:

Accepted Answer

A)  $9.00 per unit 
B)  $10.00 per unit 
C)  $5.00 per unit 
D)  $11.20 per unit 
A)  $9.00 per unit 
B)  $10.00 per unit 
C)  $5.00 per unit 
D)  $11.20 per unit

Question 20

The profit in cost-volume-profit equations is the same as the net operating income on a contribution income statement.

Accepted Answer

A) True 
 B)False

Exam 6: Cost-Volume-Profit Relationship

A company that makes organic fertilizer has supplied the following data: -The company's unit contribution margin is closest to:

Sullens Inc, which produces and sells a single product, has provided its contribution format income statement for July. -If the company sells 8,600 units, its total contribution margin should be closest to:

Data concerning Vogelgesang Corporation's single product appear below: The break-even in monthly dollar sales is closest to:

Hooper Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products: The company's total monthly fixed cost is $15,000. -The break-even in sales dollars for the expected sales mix is closest to:

Steckelberg Inc. produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $54.00 per unit. The fixed expense is $154,560 per month. The break-even in monthly unit sales is closest to:

All other things the same, a decrease in variable expense per unit will reduce the break-even point.

The following is last month's contribution format income statement: What is the company's degree of operating leverage?

Forest Corporation has prepared the following budgeted data based on a sales forecast of $3,000,000: What would be the amount of dollar sales at the break-even point?

Seyal Inc.'s contribution margin ratio is 55% and its fixed monthly expenses are $34,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $94,000?

Yundt Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in total dollar sales. Show your work!

Fietsam Corporation's only product sells for $120 per unit. Its current sales are 43,400 units and its break-even sales are 37,324 units. Required: Compute the margin of safety in both dollars and as a percentage of sales.

At the break-even point, variable expenses and fixed expenses are equal.

Pedaci Corporation produces and sells a single product. Data concerning that product appear below: -Assume the company's monthly target profit is $15,000. The unit sales to attain that target profit is closest to:

The profit in cost-volume-profit equations is the same as the net operating income on a contribution income statement.

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Variable Costing: a Tool for Management

Activity Based Costing: a Tool to Aid Decision-Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Segment Reporting, Decentralization, and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

Cost of Quality

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by

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