Question 1

All else being equal, which of the following changes would increase a company's net operating income?

Accepted Answer

A)  A decrease in sales price. 
B)  A decrease in contribution margin. 
C)  An increase in variable costs 
D)  A decrease in fixed costs. 
A)  A decrease in sales price. 
B)  A decrease in contribution margin. 
C)  An increase in variable costs 
D)  A decrease in fixed costs.

Question 2

While preparing a traditional income statement, the costs are shown into which of the two categories?

Accepted Answer

A)  Direct materials and indirect materials 
B)  Product and period 
C)  Variable and fixed 
D)  Avoidable and unavoidable 
A)  Direct materials and indirect materials 
B)  Product and period 
C)  Variable and fixed 
D)  Avoidable and unavoidable

Question 3

The contribution margin income statement is structured in such a way as to emphasize:

Accepted Answer

A)  cost functionality. 
B)  cost behavior. 
C)  organizational efficiency. 
D)  cost drivers. 
A)  cost functionality. 
B)  cost behavior. 
C)  organizational efficiency. 
D)  cost drivers.

Question 4

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 additional hotdogs will need to be sold per month in order to break even?

Accepted Answer

A)  1,000 hotdogs 
B)  600 hotdogs 
C)  200 hotdogs 
D)  480 hotdogs 
A)  1,000 hotdogs 
B)  600 hotdogs 
C)  200 hotdogs 
D)  480 hotdogs

Question 5

A company's manager estimates that in the upcoming year, decreasing advertising costs by $50,000 will cause sales revenue to decrease by $120,000. If the company's contribution margin ratio is 35%, what will be overall effect on net operating income?

Accepted Answer

A)  Net operating income will increase by $8,000. 
B)  Net operating income will decrease by $8,000. 
C)  Net operating income will increase by $24,500. 
D)  Net operating income will decrease by $24,500. 
A)  Net operating income will increase by $8,000. 
B)  Net operating income will decrease by $8,000. 
C)  Net operating income will increase by $24,500. 
D)  Net operating income will decrease by $24,500.

Question 6

Harrison Manufacturing Harrison Manufacturing has the following product information available:
  Refer to the Harrison Manufacturing information above. What is the break-even point in sales dollars?

Accepted Answer

A)  $87,600 
B)  $42,048 
C)  $168,462 
D)  $182,500 
A)  $87,600 
B)  $42,048 
C)  $168,462 
D)  $182,500

Question 7

Vincent Products manufactures a particular item with the following information:
   Required: Calculate the following based on the above information:

Accepted Answer

The answer of Vincent Products manufactures a particular item with...

Question 8

Carson Products has the following product information available:
   Required: If Carson is in the 40% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $300,000?

Accepted Answer

Sales volume (units) to earn a

Question 9

Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis?

Accepted Answer

A)  As long as the contribution margin is a positive number, net operating income will be positive. 
B)  As long as variable costs are more than fixed costs, net operating income will be negative. 
C)  As long as the contribution margin is greater than fixed costs, net operating income will be positive. 
D)  As long as the sales price per unit is greater than fixed costs per unit, net operating income will be positive. 
A)  As long as the contribution margin is a positive number, net operating income will be positive. 
B)  As long as variable costs are more than fixed costs, net operating income will be negative. 
C)  As long as the contribution margin is greater than fixed costs, net operating income will be positive. 
D)  As long as the sales price per unit is greater than fixed costs per unit, net operating income will be positive.

Question 10

Joe's Coffee House Joe's Coffee House has the following information available for the month of July:
  Refer to the Joe's Coffee House information above. Each additional cup of coffee sold will increase net operating income by:

Accepted Answer

A)  $1.70. 
B)  $3.00. 
C)  $1.00. 
D)  $0.57. 
A)  $1.70. 
B)  $3.00. 
C)  $1.00. 
D)  $0.57.

Question 11

Amanda's Silver Company produces a unique item with the following information:
   Required: Calculate the following based on the above information:

Accepted Answer

The answer of Amanda's Silver Company produces a unique item...

Question 12

A company's manager estimates that in the upcoming year, total variable costs will increase by $20,000 and total fixed costs will decrease by $14,000. 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 $34,000. 
B)  Net operating income will decrease by $34,000. 
C)  Net operating income will increase by $6,000. 
D)  Net operating income will decrease by $6,000. 
A)  Net operating income will increase by $34,000. 
B)  Net operating income will decrease by $34,000. 
C)  Net operating income will increase by $6,000. 
D)  Net operating income will decrease by $6,000.

Question 13

Which of the following statements is correct as it relates to a company that sells multiple products?

Accepted Answer

A)  CVP analysis cannot be used. 
B)  Contribution margin is based on sales mix. 
C)  CVP analysis is much easier to use. 
D)  The break-even point remains the same even if sales mix changes. 
A)  CVP analysis cannot be used. 
B)  Contribution margin is based on sales mix. 
C)  CVP analysis is much easier to use. 
D)  The break-even point remains the same even if sales mix changes.

Question 14

Which of the following would you not find on a traditional 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 15

Carolina Products has the following product information:
   Required: Calculate the following based on the above information:

Accepted Answer

The answer of Carolina Products has the following product information:
...

Question 16

All else being equal, which of the following would cause net operating income to increase?

Accepted Answer

A)  An increase in total variable costs. 
B)  A decrease in total fixed costs. 
C)  A decrease in sales price per unit. 
D)  A decrease in contribution margin. 
A)  An increase in total variable costs. 
B)  A decrease in total fixed costs. 
C)  A decrease in sales price per unit. 
D)  A decrease in contribution margin.

Question 17

Jazz Products has the following information available for the month of March:   The company's manager is considering several options to increase net operating income. By what amount do sales dollars need to increase in order for net operating income to increase to $62,000?

Accepted Answer

A)  $40,000 
B)  $62,000 
C)  $162,000 
D)  $38,000 
A)  $40,000 
B)  $62,000 
C)  $162,000 
D)  $38,000

Question 18

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

Accepted Answer

A)  decrease by $55. 
B)  increase by $45. 
C)  increase by $60. 
D)  decrease by $15. 
A)  decrease by $55. 
B)  increase by $45. 
C)  increase by $60. 
D)  decrease by $15.

Question 19

Which of the following accounting system outputs is not needed for cost-volume-profit analysis?

Accepted Answer

A)  Sales price per unit 
B)  Variable costs per unit 
C)  Total fixed costs 
D)  Fixed cost per unit 
A)  Sales price per unit 
B)  Variable costs per unit 
C)  Total fixed costs 
D)  Fixed cost per unit

Question 20

If sales revenue stays the same but the contribution margin ratio decreases, then:

Accepted Answer

A)  net operating income will increase. 
B)  fixed costs will decrease. 
C)  net operating income will decrease. 
D)  fixed costs will increase. 
A)  net operating income will increase. 
B)  fixed costs will decrease. 
C)  net operating income will decrease. 
D)  fixed costs will increase.

All else being equal, which of the following changes would increase a company's net operating income?

While preparing a traditional income statement, the costs are shown into which of the two categories?

The contribution margin income statement is structured in such a way as to emphasize:

A company's manager estimates that in the upcoming year, decreasing advertising costs by $50,000 will cause sales revenue to decrease by $120,000. If the company's contribution margin ratio is 35%, what will be overall effect on net operating income?

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. What is the break-even point in sales dollars?

Vincent Products manufactures a particular item with the following information: Required: Calculate the following based on the above information:

Carson Products has the following product information available: Required: If Carson is in the 40% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $300,000?

Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis?

Joe's Coffee House Joe's Coffee House has the following information available for the month of July: Refer to the Joe's Coffee House information above. Each additional cup of coffee sold will increase net operating income by:

Amanda's Silver Company produces a unique item with the following information: Required: Calculate the following based on the above information:

A company's manager estimates that in the upcoming year, total variable costs will increase by $20,000 and total fixed costs will decrease by $14,000. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

Which of the following statements is correct as it relates to a company that sells multiple products?

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

Carolina Products has the following product information: Required: Calculate the following based on the above information:

All else being equal, which of the following would cause net operating income to increase?

Jazz Products has the following information available for the month of March: The company's manager is considering several options to increase net operating income. By what amount do sales dollars need to increase in order for net operating income to increase to $62,000?

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

Which of the following accounting system outputs is not needed for cost-volume-profit analysis?

If sales revenue stays the same but the contribution margin ratio decreases, then:

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

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Exam 6: Cost-Volume-Profit Analysis

All else being equal, which of the following changes would increase a company's net operating income?

While preparing a traditional income statement, the costs are shown into which of the two categories?

The contribution margin income statement is structured in such a way as to emphasize:

A company's manager estimates that in the upcoming year, decreasing advertising costs by $50,000 will cause sales revenue to decrease by $120,000. If the company's contribution margin ratio is 35%, what will be overall effect on net operating income?

Harrison Manufacturing Harrison Manufacturing has the following product information available: Refer to the Harrison Manufacturing information above. What is the break-even point in sales dollars?

Vincent Products manufactures a particular item with the following information: Required: Calculate the following based on the above information:

Carson Products has the following product information available: Required: If Carson is in the 40% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $300,000?

Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis?

Joe's Coffee House Joe's Coffee House has the following information available for the month of July: Refer to the Joe's Coffee House information above. Each additional cup of coffee sold will increase net operating income by:

Amanda's Silver Company produces a unique item with the following information: Required: Calculate the following based on the above information:

A company's manager estimates that in the upcoming year, total variable costs will increase by $20,000 and total fixed costs will decrease by $14,000. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

Which of the following statements is correct as it relates to a company that sells multiple products?

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

Carolina Products has the following product information: Required: Calculate the following based on the above information:

All else being equal, which of the following would cause net operating income to increase?

Jazz Products has the following information available for the month of March: The company's manager is considering several options to increase net operating income. By what amount do sales dollars need to increase in order for net operating income to increase to $62,000?

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

Which of the following accounting system outputs is not needed for cost-volume-profit analysis?

If sales revenue stays the same but the contribution margin ratio decreases, then:

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