Question 1

The income statement for Symbiosis Manufacturing Company for 2016 is as follows:   If sales increase by $60,000, what will happen to profit?

Accepted Answer

A)  increase by $60,000 
B)  increase by $36,000 
C)  increase by $6,000 
D)  increase by $24,000 
A)  increase by $60,000 
B)  increase by $36,000 
C)  increase by $6,000 
D)  increase by $24,000

Question 2

Fantasmas Incorporated had the following information:   How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Accepted Answer

A)  8,350 units 
B)  12,800 units 
C)  15,580 units 
D)  14,750 units 
A)  8,350 units 
B)  12,800 units 
C)  15,580 units 
D)  14,750 units

Question 3

Which of the following assumptions is NOT necessary for cost-volume-profit analysis?

Accepted Answer

A)  total variable costs are linear 
B)  total revenues increase when total costs increase 
C)  inventories are constant 
D)  the product sales mix is constant 
A)  total variable costs are linear 
B)  total revenues increase when total costs increase 
C)  inventories are constant 
D)  the product sales mix is constant

Question 4

Summersville Production Company had the following projected information for 2016:   What is the contribution margin ratio?

Accepted Answer

A)  0.400 
B)  1.667 
C)  2.500 
D)  0.600 
A)  0.400 
B)  1.667 
C)  2.500 
D)  0.600

Question 5

Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit $150.00
Contribution margin per unit $45.00
Total fixed costs $630,000
What is the contribution margin ratio?

Accepted Answer

A)  0.300 
B)  1.429 
C)  0.429 
D)  3.333 
A)  0.300 
B)  1.429 
C)  0.429 
D)  3.333

Question 6

The income statement for Symbiosis Manufacturing Company for 2016 is as follows:   What is the contribution margin ratio?

Accepted Answer

A)  30% 
B)  60% 
C)  100% 
D)  40% 
A)  30% 
B)  60% 
C)  100% 
D)  40%

Question 7

The ratio expresses variable costs in terms of sales dollars.

Accepted Answer

The answer of The ratio expresses variable costs in terms...

Question 8

A very high degree of operating leverage indicates a firm

Accepted Answer

A)  has high fixed costs. 
B)  has a high net income. 
C)  has high variable costs. 
D)  is operating close to its break-even point. 
A)  has high fixed costs. 
B)  has a high net income. 
C)  has high variable costs. 
D)  is operating close to its break-even point.

Question 9

The Solemn Company has an operating leverage of 2. Sales for 2016 are $100,000 with a contribution margin of $50,000. Sales are expected to be $150,000 in 2017. Operating income for 2017 can be expected to increase by what amount over 2016?

Accepted Answer

A)  $50,000 
B)  $25,000 
C)  200% 
D)  40% 
A)  $50,000 
B)  $25,000 
C)  200% 
D)  40%

Question 10

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

Accepted Answer

A)  $45,000 
B)  $37,500 
C)  $97,500 
D)  $72,500 
A)  $45,000 
B)  $37,500 
C)  $97,500 
D)  $72,500

Question 11

Nonesuch Company sells only one product at a regular price of $7.50 per unit. Variable expenses are 60 percent of sales and fixed expenses are $30,000. Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales. What is the sales dollars level required to break even at the old price of $7.50?

Accepted Answer

A)  $50,000 
B)  $12,000 
C)  $18,000 
D)  $75,000 
A)  $50,000 
B)  $12,000 
C)  $18,000 
D)  $75,000

Question 12

Cost-volume-profit analysis focuses on the break-even point and the impact of changes in fixed costs and price.

Accepted Answer

A) True 
 B)False

Question 13

The break-even point is

Accepted Answer

A)  the volume of activity where all fixed costs are recovered. 
B)  where fixed costs equal total variable costs. 
C)  where total revenues equal total costs. 
D)  where total costs equal total contribution margin. 
A)  the volume of activity where all fixed costs are recovered. 
B)  where fixed costs equal total variable costs. 
C)  where total revenues equal total costs. 
D)  where total costs equal total contribution margin.

Question 14

If all else is the same, if the break-even point increases, then the variable cost per unit must have __________ .

Accepted Answer

The answer of If all else is the same, if...

Question 15

The Leonardo Company had the following functional income statement for the month of July 2016:
   Required: 
a. Calculate the contribution margin per unit.
b. Calculate the contribution margin ratio.
c. What is the break-even point in units?
d. What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?

Accepted Answer

a. $160,000/20,000 units = $8

Question 16

Cost-volume-profit models assume that

Accepted Answer

A)  the sales mix may vary among multiple products. 
B)  unit selling prices are constant. 
C)  inventories are dynamic and subject to change. 
D)  the total cost function is quadratic. 
A)  the sales mix may vary among multiple products. 
B)  unit selling prices are constant. 
C)  inventories are dynamic and subject to change. 
D)  the total cost function is quadratic.

Question 17

The following data pertain to the three products produced by Culdesac Corporation:   60%of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C. What is the monthly break-even point for total units?

Accepted Answer

A)  60,000 units 
B)  36,000 units 
C)  45,000 units 
D)  180,000 units 
A)  60,000 units 
B)  36,000 units 
C)  45,000 units 
D)  180,000 units

Question 18

Assume the following information:

Accepted Answer

A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000 
A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000

Question 19

Cain Company and Abel Corporation have the following income statements for 2016:   What is the degree of operating leverage for Cain Company for 2016?

Accepted Answer

A)  2.667 
B)  0.375 
C)  1.667 
D)  1.250 
A)  2.667 
B)  0.375 
C)  1.667 
D)  1.250

Question 20

In multiple-product analysis, direct fixed costs can be to each segment.

Accepted Answer

The answer of In multiple-product analysis, direct fixed costs can...

The income statement for Symbiosis Manufacturing Company for 2016 is as follows: If sales increase by $60,000, what will happen to profit?

Fantasmas Incorporated had the following information: How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Which of the following assumptions is NOT necessary for cost-volume-profit analysis?

Summersville Production Company had the following projected information for 2016: What is the contribution margin ratio?

Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit $150.00 Contribution margin per unit $45.00 Total fixed costs $630,000 What is the contribution margin ratio?

The income statement for Symbiosis Manufacturing Company for 2016 is as follows: What is the contribution margin ratio?

The ratio expresses variable costs in terms of sales dollars.

A very high degree of operating leverage indicates a firm

The Solemn Company has an operating leverage of 2. Sales for 2016 are $100,000 with a contribution margin of $50,000. Sales are expected to be $150,000 in 2017. Operating income for 2017 can be expected to increase by what amount over 2016?

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

Cost-volume-profit analysis focuses on the break-even point and the impact of changes in fixed costs and price.

The break-even point is

If all else is the same, if the break-even point increases, then the variable cost per unit must have __________ .

Cost-volume-profit models assume that

The following data pertain to the three products produced by Culdesac Corporation: 60%of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C. What is the monthly break-even point for total units?

Assume the following information:

Cain Company and Abel Corporation have the following income statements for 2016: What is the degree of operating leverage for Cain Company for 2016?

In multiple-product analysis, direct fixed costs can be to each segment.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 16: Cost-Volume-Profit Analysis

The income statement for Symbiosis Manufacturing Company for 2016 is as follows: If sales increase by $60,000, what will happen to profit?

Fantasmas Incorporated had the following information: How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

Which of the following assumptions is NOT necessary for cost-volume-profit analysis?

Summersville Production Company had the following projected information for 2016: What is the contribution margin ratio?

Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit $150.00 Contribution margin per unit $45.00 Total fixed costs $630,000 What is the contribution margin ratio?

The income statement for Symbiosis Manufacturing Company for 2016 is as follows: What is the contribution margin ratio?

The ratio expresses variable costs in terms of sales dollars.

A very high degree of operating leverage indicates a firm

The Solemn Company has an operating leverage of 2. Sales for 2016 are $100,000 with a contribution margin of $50,000. Sales are expected to be $150,000 in 2017. Operating income for 2017 can be expected to increase by what amount over 2016?

Camp Funskies has annual fixed operating costs of $150,000 and variable costs of $550 per camper. Total fees charged to campers amount to $500 each. The camp expects 350 campers next summer. Projected government grants are $95,000. How much must Camp Funskies raise from other sources to break even?

Cost-volume-profit analysis focuses on the break-even point and the impact of changes in fixed costs and price.

The break-even point is

If all else is the same, if the break-even point increases, then the variable cost per unit must have __________ .

Cost-volume-profit models assume that

The following data pertain to the three products produced by Culdesac Corporation: 60%of all units sold are Product A, 30 percent are Product B, and 10 percent are Product C. What is the monthly break-even point for total units?

Assume the following information:

Cain Company and Abel Corporation have the following income statements for 2016: What is the degree of operating leverage for Cain Company for 2016?

In multiple-product analysis, direct fixed costs can be to each segment.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters