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

The contribution margin ratio is

Accepted Answer

A)  the same as the variable cost ratio 
B)  the same as profit 
C)  the portion of equity contributed by the stockholders 
D)  the same as the profit-volume ratio

Question 3

If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units)if the variable costs are decreased by $2?

Accepted Answer

A)  2,127 
B)  1,114 
C)  2,340 
D)  1,950

Question 4

What was Rusty Co.'s sales mix last year?

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 5

Which of the following costs is a mixed cost?

Accepted Answer

A)  salary of a factory supervisor 
B)  electricity costs of $3 per kilowatt-hour 
C)  rental costs of $10,000 per month plus $0.30 per machine hour of use 
D)  straight-line depreciation on factory equipment

Question 6

Blane Company has the following data:
​
  What will operating income be if units sold double to 100,000 units?

Accepted Answer

The answer of Blane Company has the following data:
​
 ...

Question 7

Louis Company sells a single product at a price of $65 per unit.Variable costs per unit are $45 and total fixed costs are $625,500.Louis is considering the purchase of a new piece of equipment that would increase the fixed costs to $800,000,but decrease the variable costs per unit to $42.
Required:
If Louis Company expects to sell 44,000 units next year,should they purchase this new equipment?

Accepted Answer

The answer of Louis Company sells a single product at...

Question 8

If a business had a capacity of $10,000,000 of sales,actual sales of $6,000,000,break-even sales of $4,200,000,fixed costs of $1,800,000,and variable costs of 60% of sales,what is the margin of safety expressed as a percentage of sales?

Accepted Answer

The answer of If a business had a capacity of...

Question 9

Assuming no other changes,operating income will be the same under both the variable and absorption costing methods when the number of units manufactured equals the number of units sold.

Accepted Answer

A) True 
 B)False

Question 10

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit,and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are

Accepted Answer

A)  47% and $11 per unit 
B)  53% and $7 per unit 
C)  47% and $8 per unit 
D)  52% and $11 per unit

Question 11

When units manufactured exceed units sold:

Accepted Answer

A)  variable costing income equals absorption costing income 
B)  variable costing income is less than absorption costing income 
C)  variable costing income is greater than absorption costing income 
D)  variable costing income is greater by the number of units produced multiplied by the variable cost ratio.

Question 12

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable,fixed,or mixed cost for units produced and sold.

Accepted Answer

The answer of The following is a list of various...

Question 13

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 14

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would

Accepted Answer

A)  decrease 
B)  increase 
C)  remain the same 
D)  increase or decrease,depending upon the percentage increase in utility rates

Question 15

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units)?

Accepted Answer

A)  3,425 units 
B)  2,381 units 
C)  2,000 units 
D)  4,808 units

Question 16

Given the following cost data,what type of cost is shown? ​
 ​

Accepted Answer

A)  mixed cost 
B)  variable cost 
C)  fixed cost 
D)  period cost

Question 17

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

Accepted Answer

A) True 
 B)False

Question 18

For the current year ending January 31,Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50.For the coming year,a new wage contract will increase the unit variable cost to $55.50.The selling price of $70.00 per unit is expected to remain the same.

Accepted Answer

The answer of For the current year ending January 31,Harp...

Question 19

Contribution margin is

Accepted Answer

A)  the excess of sales revenue over variable cost 
B)  another term for volume in the "cost-volume-profit" analysis 
C)  profit 
D)  the same as sales revenue

Question 20

Total fixed costs change as the level of activity changes.

Accepted Answer

A) True 
 B)False

Exam 19: 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.

The contribution margin ratio is

If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units) if the variable costs are decreased by $2?

What was Rusty Co.'s sales mix last year?

Which of the following costs is a mixed cost?

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

If a business had a capacity of $10,000,000 of sales,actual sales of $6,000,000,break-even sales of $4,200,000,fixed costs of $1,800,000,and variable costs of 60% of sales,what is the margin of safety expressed as a percentage of sales?

Assuming no other changes,operating income will be the same under both the variable and absorption costing methods when the number of units manufactured equals the number of units sold.

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit,and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are

When units manufactured exceed units sold:

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable,fixed,or mixed cost for units produced and sold.

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units) ?

Given the following cost data,what type of cost is shown?

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

For the current year ending January 31,Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50.For the coming year,a new wage contract will increase the unit variable cost to $55.50.The selling price of $70.00 per unit is expected to remain the same.

Contribution margin is

Total fixed costs change as the level of activity changes.

Exam 19: 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.

The contribution margin ratio is

If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units) if the variable costs are decreased by $2?

What was Rusty Co.'s sales mix last year?

Which of the following costs is a mixed cost?

Blane Company has the following data: ​ What will operating income be if units sold double to 100,000 units?

If a business had a capacity of $10,000,000 of sales,actual sales of $6,000,000,break-even sales of $4,200,000,fixed costs of $1,800,000,and variable costs of 60% of sales,what is the margin of safety expressed as a percentage of sales?

Assuming no other changes,operating income will be the same under both the variable and absorption costing methods when the number of units manufactured equals the number of units sold.

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit,and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are

When units manufactured exceed units sold:

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable,fixed,or mixed cost for units produced and sold.

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units) ?

Given the following cost data,what type of cost is shown? ​ ​

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

For the current year ending January 31,Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50.For the coming year,a new wage contract will increase the unit variable cost to $55.50.The selling price of $70.00 per unit is expected to remain the same.

Contribution margin is

Total fixed costs change as the level of activity changes.

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

Given the following cost data,what type of cost is shown?