Question 1

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 14,500 units.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following costs of producing T-shirts with the appropriate classification (a-c).
-Salary of the production supervisor
A)Variable cost
B)Fixed cost
C)Mixed cost

Accepted Answer

The answer of Match each of the following costs of...

Question 3

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:  ​
-Rusty Co.'s sales mix last year was

Accepted Answer

A) 58% X; 42% Y 
B) 60% X; 40% Y 
C) 30% X; 70% Y 
D) 12.5% X; 87.5% Y

Question 4

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

Accepted Answer

A) True 
 B)False

Question 5

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases.     
-Per-unit cost of direct labor
A)Graph 1
B)Graph 2
C)Graph 3
D)Graph 4
E)Graph 5

Accepted Answer

The answer of Match each of the following costs with...

Question 6

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.  The sales mix for Products X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Accepted Answer

The answer of Bobby Company has fixed costs of $160,000....

Question 7

Costs that vary in total in direct proportion to changes in an activity level are called ______ costs.

Accepted Answer

A) fixed 
B) sunk 
C) variable 
D) differential

Question 8

For the coming year, River Company estimates fixed costs at $109,000, the unit variable cost at $21, and the unit selling price at $85. Determine (a) the break-even point in units of sales, (b) the unit sales required to realize operating income of $150,000, and (c) the probable operating income if sales total $500,000.​
Round units to the nearest whole number and percentage to one decimal place.

Accepted Answer

The answer of For the coming year, River Company estimates...

Question 9

Match each of the following descriptions with the appropriate term (a-e).
-Contribution margin divided by operating income
A)Profit-volume chart
B)Cost-volume-profit chart
C)Sales mix
D)Operating leverage
E)Margin of safety

Accepted Answer

The answer of Match each of the following descriptions with...

Question 10

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. The amount of sales required to realize an operating income of $200,000 is

Accepted Answer

A) 14,167 units 
B) 12,500 units 
C) 16,000 units 
D) 11,538 units

Question 11

Currently, the unit selling price is $50, the variable cost is $34, and the total fixed costs are $108,000. A proposal is being evaluated to increase the selling price to $54.​
a. Compute the current break-even sales (units).
b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.

Accepted Answer

The answer of Currently, the unit selling price is $50,...

Question 12

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price
$ 250
Unit variable cost
100
Total fixed costs
840,000
The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

Accepted Answer

A) increased by 640 units 
B) increased by 400 units 
C) decreased by 640 units 
D) increased by 800 units

Question 13

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases.     
-Salary of the night-time security guard of $3,800 per month
A)Graph 1
B)Graph 2
C)Graph 3
D)Graph 4
E)Graph 5

Accepted Answer

The answer of Match each of the following costs with...

Question 14

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Accepted Answer

A) True 
 B)False

Question 15

If fixed costs are $400,000 and the unit contribution margin is $20, the amount of units that must be sold in order to have a zero profit is

Accepted Answer

A) 25,000 units 
B) 10,000 units 
C) 400,000 units 
D) 20,000 units

Question 16

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to determine Smithson's fixed costs per month. Do not round your intermediate calculations.

Accepted Answer

A) $1,533 
B) $2,530 
C) $22,800 
D) $50,600

Question 17

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Accepted Answer

A) electricity per KWH to operate factory equipment 
B) direct materials cost 
C) insurance premiums on factory building 
D) wages of assembly worker

Question 18

Figure 1     ​
-Which of the following graphs in Figure 1 illustrates the behavior of a total fixed cost?

Accepted Answer

A) Graph 2 
B) Graph 3 
C) Graph 4 
D) Graph 1

Question 19

If fixed costs are $450,000 and the unit contribution margin is $50, the sales necessary to earn an operating income of $50,000 are 10,000 units.

Accepted Answer

A) True 
 B)False

Question 20

As production increases, variable costs per unit

Accepted Answer

A) stay the same 
B) increase 
C) decrease 
D) either increase or decrease, depending on the fixed costs

Exam 20: Cost-Volume-Profit Analysis

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 14,500 units.

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Salary of the production supervisor A)Variable cost B)Fixed cost C)Mixed cost

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: -Rusty Co.'s sales mix last year was

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases. -Per-unit cost of direct labor A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for Products X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Costs that vary in total in direct proportion to changes in an activity level are called ______ costs.

Match each of the following descriptions with the appropriate term (a-e). -Contribution margin divided by operating income A)Profit-volume chart B)Cost-volume-profit chart C)Sales mix D)Operating leverage E)Margin of safety

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. The amount of sales required to realize an operating income of $200,000 is

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases. -Salary of the night-time security guard of $3,800 per month A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

If fixed costs are $400,000 and the unit contribution margin is $20, the amount of units that must be sold in order to have a zero profit is

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to determine Smithson's fixed costs per month. Do not round your intermediate calculations.

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Figure 1 -Which of the following graphs in Figure 1 illustrates the behavior of a total fixed cost?

If fixed costs are $450,000 and the unit contribution margin is $50, the sales necessary to earn an operating income of $50,000 are 10,000 units.

As production increases, variable costs per unit

Exam 20: Cost-Volume-Profit Analysis

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 14,500 units.

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Salary of the production supervisor A)Variable cost B)Fixed cost C)Mixed cost

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ​ -Rusty Co.'s sales mix last year was

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases. -Per-unit cost of direct labor A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for Products X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Costs that vary in total in direct proportion to changes in an activity level are called ______ costs.

Match each of the following descriptions with the appropriate term (a-e). -Contribution margin divided by operating income A)Profit-volume chart B)Cost-volume-profit chart C)Sales mix D)Operating leverage E)Margin of safety

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. The amount of sales required to realize an operating income of $200,000 is

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases. -Salary of the night-time security guard of $3,800 per month A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

If fixed costs are $400,000 and the unit contribution margin is $20, the amount of units that must be sold in order to have a zero profit is

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to determine Smithson's fixed costs per month. Do not round your intermediate calculations.

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Figure 1 ​ -Which of the following graphs in Figure 1 illustrates the behavior of a total fixed cost?

If fixed costs are $450,000 and the unit contribution margin is $50, the sales necessary to earn an operating income of $50,000 are 10,000 units.

As production increases, variable costs per unit

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: -Rusty Co.'s sales mix last year was

Figure 1 -Which of the following graphs in Figure 1 illustrates the behavior of a total fixed cost?