Question 1

The following information is available for the Blue and Red Companies for 2011
   Required:

Accepted Answer

The answer of The following information is available for the...

Question 2

Hunter Inc. Hunter Inc. sells a unique product with the following information available:
  Refer to Hunter Inc. information above. What is the contribution margin ratio?

Accepted Answer

A)  55% 
B)  25% 
C)  60% 
D)  40% 
A)  55% 
B)  25% 
C)  60% 
D)  40% C

Question 3

When calculating the break-even point in a multi-product environment, which of the following statements is false?

Accepted Answer

A)  The contribution margin per unit for each product needs to be determined. 
B)  Total fixed costs need to be determined. 
C)  Each product is assumed to count for an equal percentage of total sales. 
D)  The weighted-average contribution margin per unit needs to be determined. 
A)  The contribution margin per unit for each product needs to be determined. 
B)  Total fixed costs need to be determined. 
C)  Each product is assumed to count for an equal percentage of total sales. 
D)  The weighted-average contribution margin per unit needs to be determined. C

Question 4

A company with a high level of operating leverage will:

Accepted Answer

A)  experience fewer fluctuations in income as sales fluctuate than a company with a low level of operating leverage. 
B)  experience wider fluctuations in income as sales fluctuate than a company with a low level of operating leverage. 
C)  earn higher profits than a company with a low level of operating leverage. 
D)  earn lower profits than a company with a low level of operating leverage. 
A)  experience fewer fluctuations in income as sales fluctuate than a company with a low level of operating leverage. 
B)  experience wider fluctuations in income as sales fluctuate than a company with a low level of operating leverage. 
C)  earn higher profits than a company with a low level of operating leverage. 
D)  earn lower profits than a company with a low level of operating leverage.

Question 5

Harrison Manufacturing Harrison Manufacturing has the following product information available:
  Refer to the Harrison Manufacturing information above. How many units need to be sold in order to earn a target profit of $175,000?

Accepted Answer

A)  10,942 units 
B)  7,292 units 
C)  3,642 units 
D)  5,252 units 
A)  10,942 units 
B)  7,292 units 
C)  3,642 units 
D)  5,252 units

Question 6

RET Manufacturing RET Manufacturing produces two types of children's products - Rubles and Twizzles. The following information is available related to each product:
  Rubles account for 60% of total product sales and Twizzles accounts for the rest. RET's total fixed costs are $30,024.
Refer to the RET Manufacturing information above. How many total number of products need to be sold in order for the company to break even?

Accepted Answer

A)  2,780 units 
B)  2,730 units 
C)  5,560 units 
D)  2,176 units 
A)  2,780 units 
B)  2,730 units 
C)  5,560 units 
D)  2,176 units

Question 7

Carolina Products Carolina Products sells a unique item with the following information available:
  Refer to the Carolina Products information above. If one more unit is sold, net operating income will:

Accepted Answer

A)  increase by $30. 
B)  increase by $25. 
C)  increase by $45. 
D)  increase by $40. 
A)  increase by $30. 
B)  increase by $25. 
C)  increase by $45. 
D)  increase by $40.

Question 8

A company's manager estimates that in the upcoming year, total variable costs will increase by $7,500 and total fixed costs will increase by $3,500. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

Accepted Answer

A)  Net operating income will increase by $11000. 
B)  Net operating income will decrease by $11,000. 
C)  Net operating income will increase by $4,000. 
D)  Net operating income will decrease by $4,000. 
A)  Net operating income will increase by $11000. 
B)  Net operating income will decrease by $11,000. 
C)  Net operating income will increase by $4,000. 
D)  Net operating income will decrease by $4,000.

Question 9

LeBlanc Manufacturing has the following product information available:   If LeBlanc is in the 30% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $490,000?

Accepted Answer

A)  17,500 units 
B)  18,750 units 
C)  19,286 units 
D)  9,450 units 
A)  17,500 units 
B)  18,750 units 
C)  19,286 units 
D)  9,450 units

Question 10

Carolina Products Carolina Products sells a unique item with the following information available:
  Refer to the Carolina Products information above. What is the contribution margin ratio?

Accepted Answer

A)  33.33% 
B)  66.67% 
C)  55.56% 
D)  44.44% 
A)  33.33% 
B)  66.67% 
C)  55.56% 
D)  44.44%

Question 11

Village Manufacturing Village Manufacturing produces two types of products - Card Games and Puzzles. The following information is available related to each product:
  60% of the products sold are Card Games and 40% are Puzzles.
Refer to the Village Manufacturing information above. If total fixed costs are $24,500, how many Card Games need to be sold in order for the company to break even?

Accepted Answer

A)  2,100 units 
B)  3,675 units 
C)  4,200 units 
D)  3,500 units 
A)  2,100 units 
B)  3,675 units 
C)  4,200 units 
D)  3,500 units

Question 12

Which of the following would you not find on a contribution margin income statement?

Accepted Answer

A)  Net operating income 
B)  Gross profit 
C)  Contribution margin 
D)  Sales revenue 
A)  Net operating income 
B)  Gross profit 
C)  Contribution margin 
D)  Sales revenue

Question 13

LMN Manufacturing produces two products - Product S and Product W. The following information is available related to each product:   Product S accounts for 40% of total product sales and Product W accounts for the rest. LMN's total fixed costs are $24,990. How many total number of products need to be sold in order for the company to break even?

Accepted Answer

A)  1,922 units 
B)  2,403 units 
C)  962 units 
D)  1,785 units 
A)  1,922 units 
B)  2,403 units 
C)  962 units 
D)  1,785 units

Question 14

Harrison Manufacturing Harrison Manufacturing has the following product information available:
  Refer to the Harrison Manufacturing information above. What do total sales dollars need to be in order to earn a target profit of $200,400?

Accepted Answer

A)  $235,000 
B)  $600,000 
C)  $288,000 
D)  $417,500 
A)  $235,000 
B)  $600,000 
C)  $288,000 
D)  $417,500

Question 15

Crabtree Inc. produces two types of products - Gizmos and Gadgets. The following information is available related to each product:   If total fixed costs are $29,000, how many total units need to be sold in order for the company to break even? (round computations to nearest number)

Accepted Answer

A)  1,933 units 
B)  1,036 units 
C)  1,500 units 
D)  1,349 units 
A)  1,933 units 
B)  1,036 units 
C)  1,500 units 
D)  1,349 units

Question 16

Charlie's Hotdog Stand Charlie's Hotdog Stand sells hotdogs for $2.50 each. The variable costs per hotdog are $.50. Charlie's fixed costs are currently $800 per month. Charlie is considering expanding his business to three hotdog stands which will increase fixed costs per month by $1,200.
Refer to the Charlie's Hotdog Stand information above. If Charlie does expand his business to three stands, how many hotdogs will need to be sold per month in order to earn a target profit of $5,000?

Accepted Answer

A)  2,500 hotdogs 
B)  3,100 hotdogs 
C)  3,500 hotdogs 
D)  2,800 hotdogs 
A)  2,500 hotdogs 
B)  3,100 hotdogs 
C)  3,500 hotdogs 
D)  2,800 hotdogs

Question 17

Assuming a company's income statement shows a net operating income, which of the following statements is true regarding the contribution margin per unit?

Accepted Answer

A)  It will decrease as the number of units sold increases. 
B)  It will decrease as the number of units purchased decreases. 
C)  It indicates the amount that net operating income will increase with the sale of each additional unit. 
D)  It indicates the amount that variable costs will decrease with the sale of each additional unit. 
A)  It will decrease as the number of units sold increases. 
B)  It will decrease as the number of units purchased decreases. 
C)  It indicates the amount that net operating income will increase with the sale of each additional unit. 
D)  It indicates the amount that variable costs will decrease with the sale of each additional unit.

Question 18

Grisham Inc. wishes to have an after-tax profit of $400,000. If Grisham's tax rate is 35%, what is their before-tax profit?

Accepted Answer

A)  $615,385 
B)  $540,000 
C)  $1,142,857 
D)  $660,000 
A)  $615,385 
B)  $540,000 
C)  $1,142,857 
D)  $660,000

Question 19

Which of the following is usually not one of the factors that cost-volume-profit analysis focuses on?

Accepted Answer

A)  Sales prices of products 
B)  Mix of products or services produced 
C)  Variable costs per unit 
D)  Fixed costs per unit 
A)  Sales prices of products 
B)  Mix of products or services produced 
C)  Variable costs per unit 
D)  Fixed costs per unit

Question 20

Lowman Inc. sells a product with a sales price of $25 per unit, variable costs of $10 per unit, and total fixed costs of $100,000. Lowman is looking into implementing an aggressive advertising campaign that will cost $45,000.
By what amount do sales dollars need to at least increase by in order for the company's overall profits to not decrease by having the advertising campaign?

Accepted Answer

The contribution margin needs to increas

The following information is available for the Blue and Red Companies for 2011 Required:

Hunter Inc. Hunter Inc. sells a unique product with the following information available: Refer to Hunter Inc. information above. What is the contribution margin ratio?

When calculating the break-even point in a multi-product environment, which of the following statements is false?

A company with a high level of operating leverage will:

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. How many units need to be sold in order to earn a target profit of $175,000?

Carolina Products Carolina Products sells a unique item with the following information available: Refer to the Carolina Products information above. If one more unit is sold, net operating income will:

A company's manager estimates that in the upcoming year, total variable costs will increase by $7,500 and total fixed costs will increase by $3,500. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

LeBlanc Manufacturing has the following product information available: If LeBlanc is in the 30% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $490,000?

Carolina Products Carolina Products sells a unique item with the following information available: Refer to the Carolina Products information above. What is the contribution margin ratio?

Which of the following would you not find on a contribution margin income statement?

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. What do total sales dollars need to be in order to earn a target profit of $200,400?

Crabtree Inc. produces two types of products - Gizmos and Gadgets. The following information is available related to each product: If total fixed costs are $29,000, how many total units need to be sold in order for the company to break even? (round computations to nearest number)

Assuming a company's income statement shows a net operating income, which of the following statements is true regarding the contribution margin per unit?

Grisham Inc. wishes to have an after-tax profit of $400,000. If Grisham's tax rate is 35%, what is their before-tax profit?

Which of the following is usually not one of the factors that cost-volume-profit analysis focuses on?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

Filters

Exam 6: Cost-Volume-Profit Analysis

The following information is available for the Blue and Red Companies for 2011 Required:

Hunter Inc. Hunter Inc. sells a unique product with the following information available: Refer to Hunter Inc. information above. What is the contribution margin ratio?

When calculating the break-even point in a multi-product environment, which of the following statements is false?

A company with a high level of operating leverage will:

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. How many units need to be sold in order to earn a target profit of $175,000?

Carolina Products Carolina Products sells a unique item with the following information available: Refer to the Carolina Products information above. If one more unit is sold, net operating income will:

A company's manager estimates that in the upcoming year, total variable costs will increase by $7,500 and total fixed costs will increase by $3,500. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

LeBlanc Manufacturing has the following product information available: If LeBlanc is in the 30% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $490,000?

Carolina Products Carolina Products sells a unique item with the following information available: Refer to the Carolina Products information above. What is the contribution margin ratio?

Which of the following would you not find on a contribution margin income statement?

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. What do total sales dollars need to be in order to earn a target profit of $200,400?

Crabtree Inc. produces two types of products - Gizmos and Gadgets. The following information is available related to each product: If total fixed costs are $29,000, how many total units need to be sold in order for the company to break even? (round computations to nearest number)

Assuming a company's income statement shows a net operating income, which of the following statements is true regarding the contribution margin per unit?

Grisham Inc. wishes to have an after-tax profit of $400,000. If Grisham's tax rate is 35%, what is their before-tax profit?

Which of the following is usually not one of the factors that cost-volume-profit analysis focuses on?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

Filters