Question 1

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

Accepted Answer

A)  4,529 
B)  3,470 
C)  2,394 
D)  7,724 
A)  4,529 
B)  3,470 
C)  2,394 
D)  7,724

Question 2

All other things the same, in periods of increasing sales, net operating income will tend to increase more rapidly in a company with high variable costs and low fixed costs than in a company with high fixed costs and low variable costs.

Accepted Answer

A) True 
 B)False

Question 3

Data concerning Shanor Enterprises Corporation's single product appear below:  
The unit sales to attain the company's monthly target profit of $13,000 is closest to:

Accepted Answer

A)  2,245 
B)  3,805 
C)  5,475 
D)  3,842 
A)  2,245 
B)  3,805 
C)  5,475 
D)  3,842

Question 4

Langin Corporation has provided its contribution format income statement for June.   
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 14% increase in sales.

Accepted Answer

a. Degree of operating leverage = Contri

Question 5

Data concerning Plaxco Corporation's single product appear below:  
-Assume the company's monthly target profit is $12,000. The dollar sales to attain that target profit is closest to:

Accepted Answer

A)  $941,500 
B)  $754,166 
C)  $451,920 
D)  $869,077 
A)  $941,500 
B)  $754,166 
C)  $451,920 
D)  $869,077

Question 6

Terres Corporation produces and sells a single product. Data concerning that product appear below:  
The break-even in monthly dollar sales is closest to:

Accepted Answer

A)  $889,273 
B)  $438,000 
C)  $293,460 
D)  $540,244 
A)  $889,273 
B)  $438,000 
C)  $293,460 
D)  $540,244

Question 7

Jatry Corporation's budgeted sales are $300,000, its budgeted variable expenses are $210,000, and its budgeted fixed expenses are $60,000. The company's break-even in dollar sales is:

Accepted Answer

A)  $200,000 
B)  $330,000 
C)  $210,000 
D)  $270,000 
A)  $200,000 
B)  $330,000 
C)  $210,000 
D)  $270,000

Question 8

Doubleday Corporation produces and sells a single product. The company has provided its contribution format income statement for August.  
-If the company sells 3,000 units, its total contribution margin should be closest to:

Accepted Answer

A)  $20,813 
B)  $115,200 
C)  $96,600 
D)  $108,000 
A)  $20,813 
B)  $115,200 
C)  $96,600 
D)  $108,000

Question 9

Data concerning Grodi Corporation's single product appear below:  
Fixed expenses are $324,000 per month. The company is currently selling 5,000 units per month. Management is considering using a new component that would increase the unit variable cost by $9. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  decrease of $4,500 
B)  decrease of $40,500 
C)  increase of $40,500 
D)  increase of $4,500 
A)  decrease of $4,500 
B)  decrease of $40,500 
C)  increase of $40,500 
D)  increase of $4,500

Question 10

The April contribution format income statement of Iannacone Corporation appears below:  
-The degree of operating leverage is closest to:

Accepted Answer

A)  11.28 
B)  0.29 
C)  3.50 
D)  0.09 
A)  11.28 
B)  0.29 
C)  3.50 
D)  0.09

Question 11

Hurst Co. manufacturers and sells a single product. Price and cost data regarding this product are as follows:  
-How many units need to be sold to earn an annual net operating income equal to 10% of sales?

Accepted Answer

A)  44,000 units 
B)  53,200 units 
C)  54,500 units 
D)  47,500 units 
A)  44,000 units 
B)  53,200 units 
C)  54,500 units 
D)  47,500 units

Question 12

Data concerning Sotero Corporation's single product appear below:   The company is currently selling 5,000 units per month. Fixed expenses are $319,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Sotero Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  decrease of $3,120 
B)  increase of $3,120 
C)  decrease of $12,000 
D)  increase of $15,120 
A)  decrease of $3,120 
B)  increase of $3,120 
C)  decrease of $12,000 
D)  increase of $15,120

Question 13

Data concerning Sotero Corporation's single product appear below:   The company is currently selling 5,000 units per month. Fixed expenses are $319,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Sotero Corporation. Refer to the original data when answering this question.
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $37,000 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 100 units. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A)  increase of $36,100 
B)  decrease of $74,500 
C)  decrease of $500 
D)  increase of $419,500 
A)  increase of $36,100 
B)  decrease of $74,500 
C)  decrease of $500 
D)  increase of $419,500

Question 14

The ratio of fixed expenses to the unit contribution margin is the:

Accepted Answer

A)  break-even point in unit sales. 
B)  profit margin. 
C)  contribution margin ratio. 
D)  margin of safety. 
A)  break-even point in unit sales. 
B)  profit margin. 
C)  contribution margin ratio. 
D)  margin of safety.

Question 15

Scott Company's variable expenses are 72% of sales. The company's break-even point in dollar sales is $2,450,000. If sales are $60,000 below the break-even point, the company would report a:

Accepted Answer

A)  $43,200 loss 
B)  $60,000 loss 
C)  $16,800 loss 
D)  cannot be determined from the data given. 
A)  $43,200 loss 
B)  $60,000 loss 
C)  $16,800 loss 
D)  cannot be determined from the data given.

Question 16

Scobie Corporation's fixed monthly expenses are $16,000 and its contribution margin ratio is 57%. 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 $69,000?

Accepted Answer

A)  $39,330 
B)  $23,330 
C)  $13,670 
D)  $53,000 
A)  $39,330 
B)  $23,330 
C)  $13,670 
D)  $53,000

Question 17

Erdmann Corporation has provided its contribution format income statement for July. The company produces and sells a single product.  
-If the company sells 7,500 units, its total contribution margin should be closest to:

Accepted Answer

A)  $55,063 
B)  $184,800 
C)  $210,000 
D)  $221,200 
A)  $55,063 
B)  $184,800 
C)  $210,000 
D)  $221,200

Question 18

Data concerning Emmanuel Corporation's single product appear below:   
Fixed expenses are $650,000 per month. The company is currently selling 8,000 units per month.
Required:
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $79,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Accepted Answer

The answer of Data concerning Emmanuel Corporation's single product appear...

Question 19

Janet Company produces a game that sells for $17 per game. Variable expenses are $9 per game and fixed expenses total $172,000 annually.
-The break-even point is closest to:

Accepted Answer

A)  19,111 units 
B)  10,118 units 
C)  21,500 units 
D)  24,000 units 
A)  19,111 units 
B)  10,118 units 
C)  21,500 units 
D)  24,000 units

Question 20

The following is last month's contribution format income statement:  
What is the company's break-even in unit sales?

Accepted Answer

A)  0 units 
B)  12,000 units 
C)  6,000 units 
D)  8,000 units 
A)  0 units 
B)  12,000 units 
C)  6,000 units 
D)  8,000 units

Exam 6: Cost-Volume-Profit Relationship

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

All other things the same, in periods of increasing sales, net operating income will tend to increase more rapidly in a company with high variable costs and low fixed costs than in a company with high fixed costs and low variable costs.

Data concerning Shanor Enterprises Corporation's single product appear below: The unit sales to attain the company's monthly target profit of $13,000 is closest to:

Data concerning Plaxco Corporation's single product appear below: -Assume the company's monthly target profit is $12,000. The dollar sales to attain that target profit is closest to:

Terres Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly dollar sales is closest to:

Jatry Corporation's budgeted sales are $300,000, its budgeted variable expenses are $210,000, and its budgeted fixed expenses are $60,000. The company's break-even in dollar sales is:

Doubleday Corporation produces and sells a single product. The company has provided its contribution format income statement for August. -If the company sells 3,000 units, its total contribution margin should be closest to:

The April contribution format income statement of Iannacone Corporation appears below: -The degree of operating leverage is closest to:

Hurst Co. manufacturers and sells a single product. Price and cost data regarding this product are as follows: -How many units need to be sold to earn an annual net operating income equal to 10% of sales?

The ratio of fixed expenses to the unit contribution margin is the:

Scott Company's variable expenses are 72% of sales. The company's break-even point in dollar sales is $2,450,000. If sales are $60,000 below the break-even point, the company would report a:

Scobie Corporation's fixed monthly expenses are $16,000 and its contribution margin ratio is 57%. 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 $69,000?

Erdmann Corporation has provided its contribution format income statement for July. The company produces and sells a single product. -If the company sells 7,500 units, its total contribution margin should be closest to:

Janet Company produces a game that sells for $17 per game. Variable expenses are $9 per game and fixed expenses total $172,000 annually. -The break-even point is closest to:

The following is last month's contribution format income statement: What is the company's break-even in unit sales?

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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