Question 1

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in dollars.

Accepted Answer

A) $1,740,000. 
B) $2,612,612. 
C) $1,304,348. 
D) $4,202,899. 
E) $2,640,000.

Question 2

Fielder Productions reports the following information:  Required:
(a)Calculate Fielder's degree of operating leverage (DOL).
(b)Fielder Productions forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

Accepted Answer

The answer of Fielder Productions reports the following information: ...

Question 3

A _______________ cost is one that remains unchanged despite variations in the volume of activity within a relevant range.A ______________ cost is one that changes in proportion to changes in volume of activity.
Answers must appear in this order.

Accepted Answer

The answer of A _______________ cost is one that remains...

Question 4

During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as fixed costs in the company's contribution margin income statement for the year in question?

Accepted Answer

A) $1,900,000. 
B) $2,800,000. 
C) $1,300,000. 
D) $1,100,000. 
E) $1,700,000.

Question 5

When graphing cost-volume-profit data on a CVP chart:

Accepted Answer

A) Units are plotted on the horizontal axis;costs on the vertical axis. 
B) Units are plotted on the vertical axis;costs on the horizontal axis. 
C) Both units and costs are plotted on the horizontal axis. 
D) Both units and cost are plotted on the vertical axis. 
E) Data points always represent expected future points.

Question 6

A product sells for $200 per unit,and its variable costs are 65% of sales.The fixed costs are $420,000.What is the break-even point in sales dollars?

Accepted Answer

A) $2,100. 
B) $6,000. 
C) $420,000. 
D) $646,154. 
E) $1,200,000.

Question 7

The margin of safety can be expressed in units of product,in dollars,or as a percent of sales.

Accepted Answer

A) True 
 B)False

Question 8

Kent Manufacturing produces a product that sells for $50.00.Fixed costs are $260,000 and variable costs are $24.00 per unit.Kent can buy a new production machine that will increase fixed costs by $11,400 per year,but will decrease variable costs by $3.50 per unit.Compute the revised break-even point in dollars with the purchase of the new machine.

Accepted Answer

A) $500,000. 
B) $440,678. 
C) $521,923. 
D) $480,000. 
E) $460,000.

Question 9

Which one of the following statements is not true?

Accepted Answer

A) Total fixed costs remain the same regardless of volume within the relevant range. 
B) Total variable costs change with volume. 
C) Total variable costs decrease as the volume increases. 
D) Fixed costs per unit increase as the volume decreases. 
E) Variable costs per unit remain the same regardless of the volume.

Question 10

To determine the slope of the variable cost from a scatter diagram,divide the change in units by the change in cost.

Accepted Answer

A) True 
 B)False

Question 11

Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales.What will pretax income equal if sales are $325,000?

Accepted Answer

A) $57,500. 
B) $122,500. 
C) $130,000. 
D) $181,250. 
E) $252,500.

Question 12

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in units.

Accepted Answer

A) 5,500. 
B) 1,933. 
C) 5,800. 
D) 2,900. 
E) 1,160.

Question 13

Solving problems to determine the relationship of cost,volume,and profit often commences with the measurement of the ________ point.Further analysis emphasizing profitability may be accomplished by measuring the __________ and _________________.
Answers must appear in this order.

Accepted Answer

The answer of Solving problems to determine the relationship of...

Question 14

Zola Co.has a contribution margin ratio of 40% and would like to determine whether an additional advertising expenditure of $4,000 would increase sales by $8,000.Calculate the increase or decrease in net income that would result from this change,and comment on whether Zola should purchase the additional advertising.

Accepted Answer

The answer of Zola Co.has a contribution margin ratio of...

Question 15

Glover Headgear produces specialty logo baseball caps for a variety of customers.Selected cost data for Glover follows: direct materials cost $8,000;sales commissions,$9,000;depreciation on factory equipment,$21,000;factory labor,$16,000;factory lease,$24,000.If Glover sells 6,100 caps at an average price of $12 for each cap,what is the company's contribution margin?

Accepted Answer

The answer of Glover Headgear produces specialty logo baseball caps...

Question 16

McCoy Brothers manufactures and sells two products,A and Z in the ratio of 4:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the number of units of Product Z McCoy must sell to break even.

Accepted Answer

A) 1,350. 
B) 6,200. 
C) 10,463. 
D) 2,700. 
E) 6,750.

Question 17

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

Accepted Answer

A) Least-squares diagram. 
B) Step-wise diagram. 
C) Scatter diagram. 
D) Break-even diagram. 
E) Composite diagram.

Question 18

The basic form of cost-volume-profit analysis is often called break-even analysis.

Accepted Answer

A) True 
 B)False

Question 19

A company has fixed costs of $320,000 and a contribution margin per unit of $15.If the firm wants to earn a target $40,000 pretax income,how many units must be sold (rounded to the nearest whole unit)?

Accepted Answer

A) 24,000. 
B) 21,333. 
C) 18,666. 
D) 2,667. 
E) 20,000.

Question 20

The break-even point is the sales level at which a company neither earns a profit nor incurs a loss.

Accepted Answer

A) True 
 B)False

Exam 21: Cost-Volume-Profit Analysis

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in dollars.

Fielder Productions reports the following information: Required: (a)Calculate Fielder's degree of operating leverage (DOL). (b)Fielder Productions forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

A _ cost is one that remains unchanged despite variations in the volume of activity within a relevant range.A cost is one that changes in proportion to changes in volume of activity. Answers must appear in this order.

During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as fixed costs in the company's contribution margin income statement for the year in question?

When graphing cost-volume-profit data on a CVP chart:

A product sells for $200 per unit,and its variable costs are 65% of sales.The fixed costs are $420,000.What is the break-even point in sales dollars?

The margin of safety can be expressed in units of product,in dollars,or as a percent of sales.

Which one of the following statements is not true?

To determine the slope of the variable cost from a scatter diagram,divide the change in units by the change in cost.

Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales.What will pretax income equal if sales are $325,000?

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in units.

Solving problems to determine the relationship of cost,volume,and profit often commences with the measurement of the point.Further analysis emphasizing profitability may be accomplished by measuring the and ___________. Answers must appear in this order.

McCoy Brothers manufactures and sells two products,A and Z in the ratio of 4:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the number of units of Product Z McCoy must sell to break even.

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

The basic form of cost-volume-profit analysis is often called break-even analysis.

A company has fixed costs of $320,000 and a contribution margin per unit of $15.If the firm wants to earn a target $40,000 pretax income,how many units must be sold (rounded to the nearest whole unit) ?

The break-even point is the sales level at which a company neither earns a profit nor incurs a loss.

Exam 21: Cost-Volume-Profit Analysis

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in dollars.

Fielder Productions reports the following information: Required: (a)Calculate Fielder's degree of operating leverage (DOL). (b)Fielder Productions forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

A _______________ cost is one that remains unchanged despite variations in the volume of activity within a relevant range.A ______________ cost is one that changes in proportion to changes in volume of activity. Answers must appear in this order.

During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as fixed costs in the company's contribution margin income statement for the year in question?

When graphing cost-volume-profit data on a CVP chart:

A product sells for $200 per unit,and its variable costs are 65% of sales.The fixed costs are $420,000.What is the break-even point in sales dollars?

The margin of safety can be expressed in units of product,in dollars,or as a percent of sales.

Which one of the following statements is not true?

To determine the slope of the variable cost from a scatter diagram,divide the change in units by the change in cost.

Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales.What will pretax income equal if sales are $325,000?

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in units.

Solving problems to determine the relationship of cost,volume,and profit often commences with the measurement of the ________ point.Further analysis emphasizing profitability may be accomplished by measuring the __________ and _________________. Answers must appear in this order.

McCoy Brothers manufactures and sells two products,A and Z in the ratio of 4:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the number of units of Product Z McCoy must sell to break even.

A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:

The basic form of cost-volume-profit analysis is often called break-even analysis.

A company has fixed costs of $320,000 and a contribution margin per unit of $15.If the firm wants to earn a target $40,000 pretax income,how many units must be sold (rounded to the nearest whole unit) ?

The break-even point is the sales level at which a company neither earns a profit nor incurs a loss.

A _ cost is one that remains unchanged despite variations in the volume of activity within a relevant range.A cost is one that changes in proportion to changes in volume of activity. Answers must appear in this order.

Solving problems to determine the relationship of cost,volume,and profit often commences with the measurement of the point.Further analysis emphasizing profitability may be accomplished by measuring the and ___________. Answers must appear in this order.