Question 1

If sales volume decreases, and all other factors remain unchanged, the contribution margin ratio will decrease.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT a correct definition of the break-even point?

Accepted Answer

A) the point where total sales equals total expenses. 
B) the point where total profit equals total fixed expenses. 
C) the point where total contribution margin equals total fixed expenses. 
D) the point where total profit equals zero. 
A) the point where total sales equals total expenses. 
B) the point where total profit equals total fixed expenses. 
C) the point where total contribution margin equals total fixed expenses. 
D) the point where total profit equals zero.

Question 3

Torbert, Inc., produces and sells a single product. The product sells for $190.00 per unit and its variable expense is $72.20 per unit. The company's monthly fixed expense is $353,400.
Required:
Determine the monthly break-even in unit sales. Show your work!

Accepted Answer

@#IMG-DLM& Unit sales to break

Question 4

Grable Corporation produces and sells a single product. Data concerning that product appear below:   Fixed expenses are $628,000 per month. The company is currently selling 5,000 units per month.
Required:
The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $45,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 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 Grable Corporation produces and sells a single...

Question 5

Data concerning Wythe Corporation's single product appear below:   Fixed expenses are $106,000 per month. The company is currently selling 2,000 units per month. The marketing manager would like to cut the selling price by $15 and increase the advertising budget by $5,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) increase of $31,000 
B) decrease of $31,000 
C) increase of $103,000 
D) increase of $1,000 
A) increase of $31,000 
B) decrease of $31,000 
C) increase of $103,000 
D) increase of $1,000

Question 6

Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then:

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 7

The margin of safety as a percentage of sales is closest to:

Accepted Answer

A) 27% 
B) 37% 
C) 63% 
D) 73% 
A) 27% 
B) 37% 
C) 63% 
D) 73%

Question 8

This question is to be considered independently of all other questions relating to Bohlen Corporation. Refer to the original data when answering this question.
-Management is considering using a new component that would increase the unit variable cost by $8. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) increase of $54,400 
B) decrease of $54,400 
C) decrease of $6,400 
D) increase of $6,400 
A) increase of $54,400 
B) decrease of $54,400 
C) decrease of $6,400 
D) increase of $6,400

Question 9

Gauani Corporation produces and sells a single product. Data concerning that product appear below:   Required:
a. Assume the company's monthly target profit is $21,600. Determine the unit sales to attain that target profit. Show your work!
b. Assume the company's monthly target profit is $54,000. Determine the dollar sales to attain that target profit. Show your work!

Accepted Answer

@#IMG-DLM& a. Unit sales to attain target profit =

Question 10

If two companies produce the same product and have the same total sales and same total expenses, operating leverage will be higher in the company with a higher proportion of fixed expenses in its cost structure.

Accepted Answer

A) True 
 B)False

Question 11

At the break-even point, the total contribution margin and fixed expenses are equal.

Accepted Answer

A) True 
 B)False

Question 12

The company's degree of operating leverage is closest to:

Accepted Answer

A) 2.80 
B) 7.00 
C) 2.29 
D) 20.72 
A) 2.80 
B) 7.00 
C) 2.29 
D) 20.72

Question 13

Last year Easton Corporation reported sales of $720,000, a contribution margin ratio of 30% and a net loss of $24,000. Based on this information, the break-even point was:

Accepted Answer

A) $640,000 
B) $880,000 
C) $744,000 
D) $800,000 
A) $640,000 
B) $880,000 
C) $744,000 
D) $800,000

Question 14

Assume the company's target profit is $12,000. The unit sales to attain that target profit is closest to:

Accepted Answer

A) 3,242 units 
B) 4,912 units 
C) 9,535 units 
D) 5,896 units 
A) 3,242 units 
B) 4,912 units 
C) 9,535 units 
D) 5,896 units

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The margin of safety is:

Accepted Answer

A) the excess of budgeted or actual sales over budgeted or actual variable expenses. 
B) the excess of budgeted or actual sales over budgeted or actual fixed expenses. 
C) the excess of budgeted or actual sales over the break-even volume of sales. 
D) the excess of budgeted net operating income over actual net operating income. 
A) the excess of budgeted or actual sales over budgeted or actual variable expenses. 
B) the excess of budgeted or actual sales over budgeted or actual fixed expenses. 
C) the excess of budgeted or actual sales over the break-even volume of sales. 
D) the excess of budgeted net operating income over actual net operating income.

Question 17

The company's degree of operating leverage is closest to:

Accepted Answer

A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64 
A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64

Question 18

Assume the company's target profit is $5,000. The unit sales to attain that target profit is closest to:

Accepted Answer

A) 5,496 units 
B) 2,198 units 
C) 3,786 units 
D) 3,664 units 
A) 5,496 units 
B) 2,198 units 
C) 3,786 units 
D) 3,664 units

Question 19

The company's break-even in unit sales is closest to:

Accepted Answer

A) 43,774 
B) 237,143 
C) 76,615 
D) 80,606 
A) 43,774 
B) 237,143 
C) 76,615 
D) 80,606

Question 20

This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.
-The marketing manager believes that a $6,000 increase in the monthly advertising budget would result in a 130 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 $240 
B) decrease of $6,000 
C) increase of $240 
D) increase of $6,240 
A) decrease of $240 
B) decrease of $6,000 
C) increase of $240 
D) increase of $6,240

If sales volume decreases, and all other factors remain unchanged, the contribution margin ratio will decrease.

Which of the following is NOT a correct definition of the break-even point?

Torbert, Inc., produces and sells a single product. The product sells for $190.00 per unit and its variable expense is $72.20 per unit. The company's monthly fixed expense is $353,400. Required: Determine the monthly break-even in unit sales. Show your work!

Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then:

The margin of safety as a percentage of sales is closest to:

If two companies produce the same product and have the same total sales and same total expenses, operating leverage will be higher in the company with a higher proportion of fixed expenses in its cost structure.

At the break-even point, the total contribution margin and fixed expenses are equal.

The company's degree of operating leverage is closest to:

Last year Easton Corporation reported sales of $720,000, a contribution margin ratio of 30% and a net loss of $24,000. Based on this information, the break-even point was:

Assume the company's target profit is $12,000. The unit sales to attain that target profit 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 fixed costs and low variable costs than in a company with high variable costs and low fixed costs.

The margin of safety is:

The company's degree of operating leverage is closest to:

Assume the company's target profit is $5,000. The unit sales to attain that target profit is closest to:

The company's break-even in unit sales is closest to:

Managerial Accounting and Cost Concepts

Least-Squares Regression Computations

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

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Exam 10: Cost-Volume-Profit Relationships

If sales volume decreases, and all other factors remain unchanged, the contribution margin ratio will decrease.

Which of the following is NOT a correct definition of the break-even point?

Torbert, Inc., produces and sells a single product. The product sells for $190.00 per unit and its variable expense is $72.20 per unit. The company's monthly fixed expense is $353,400. Required: Determine the monthly break-even in unit sales. Show your work!

Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then:

The margin of safety as a percentage of sales is closest to:

If two companies produce the same product and have the same total sales and same total expenses, operating leverage will be higher in the company with a higher proportion of fixed expenses in its cost structure.

At the break-even point, the total contribution margin and fixed expenses are equal.

The company's degree of operating leverage is closest to:

Last year Easton Corporation reported sales of $720,000, a contribution margin ratio of 30% and a net loss of $24,000. Based on this information, the break-even point was:

Assume the company's target profit is $12,000. The unit sales to attain that target profit 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 fixed costs and low variable costs than in a company with high variable costs and low fixed costs.

The margin of safety is:

The company's degree of operating leverage is closest to:

Assume the company's target profit is $5,000. The unit sales to attain that target profit is closest to:

The company's break-even in unit sales is closest to:

Managerial Accounting and Cost Concepts

Least-Squares Regression Computations

Cost of Quality

Job-Order Costing

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Process Costing

Fifo Method

Service Department Allocations

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Activity-Based Costing: a Tool to Aid Decision Making

Abc Action Analysis

Filters