Exam 16: Cost-Volume-Profit Analysis

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 How many units must be sold to obtain a target before-tax profit of $270,000?

Product 1 has a contribution margin of $6.00 per unit, and Product 2 has a contribution margin of $7.50 per unit. Total fixed costs are $300,000. Sales mix and total volume varies from one period to another. Which of the following is TRUE?

The term net income is used to mean operating income before income taxes.

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 contribution margin ratio when the selling price is reduced to $6 per unit?

Sales × Contribution Margin is a short-cut of what formula?

In the Cost-Volume-Profit analysis, what are two ways management can deal with risk and uncertainty?

Uncertainty regarding costs, prices, and sales mix affect the break-even point.

A decrease in the sales price in the basic cost-volume-profit model would

The following diagram is a cost-volume-profit graph for a manufacturing company: The formula to determine the Y-axis value ($) at point D on the graph is

On a profit-volume graph, the line intersects the horizontal axis at the break-even point.

Total contribution margin is calculated by subtracting

Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 45 percent and total fixed costs of $6,875. What is the break-even point in sales dollars for Biscuit Company?

The DesMaris Company had the following income statement for the month of November 2016: DesMaris Company Income Statement For the Month of November 2016

The use of fixed costs to increase the percentage changes in profits as sales activities change is called the __________ leverage.

Summersville Production Company had the following projected information for 2016: What is the profit when one unit more than the break-even point is sold?

Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis?

On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

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

On a profit-volume graph, the profit line intersects the horizontal axis at

In a cost-volume-profit graph,