Question 1

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, the amount of sales (units)  required to realize an operating income of $200,000 is

Accepted Answer

A)  9,231 units
B)  12,000 units
C)  10,769 units
D)  5,833 unitsE) None of the above
F) A) and C)

Question 2

Match each of the following costs of producing T-shirts with the appropriate classification (a-c).
-Ink used for screen printing
A)Variable cost
B)Fixed cost
C)Mixed cost

Accepted Answer

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

Question 3

Which of the following statements is true regarding fixed and variable costs?

Accepted Answer

A)  Both costs are constant when considered on a per-unit basis.
B)  Both costs are constant when considered on a total basis.
C)  Fixed costs are constant in total, and variable costs are constant per unit.
D)  Variable costs are constant in total, and fixed costs vary in total.E) A) and D)
F) A) and B)

Question 4

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

Accepted Answer

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

Question 5

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 6

Cost-volume-profit analysis cannot be used if which of the following occurs?

Accepted Answer

A)  Costs cannot be properly classified into fixed and variable costs.
B)  The total fixed costs change.
C)  The per-unit variable costs change.
D)  Per-unit sales prices change.E) A) and B)
F) A) and D)

Question 7

Rocky Company reports the following data: Sales
$800,000
Variable costs
300,000
Fixed costs
120,000
Rocky Company's operating leverage is

Accepted Answer

A)  6.7
B)  2.7
C)  1.0
D)  1.3E) A) and B)
F) A) and D)

Question 8

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 straight-line depreciation costs
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 9

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

Accepted Answer

A) True 
 B)False

Question 10

The manufacturing costs of Carrie Industries for the first three months of the year are provided below.  Using the high-low method, determine the (a) variable cost per unit, and (b) the total fixed cost.

Accepted Answer

a. ($115,500 - $79,5...

Question 11

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, the contribution margin ratio is

Accepted Answer

A)  45%
B)  55%
C)  62%
D)  32%E) A) and D)
F) B) and D)

Question 12

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

Accepted Answer

A)  2,127 units
B)  1,114 units
C)  2,340 units
D)  1,950 unitsE) All of the above
F) None of the above

Question 13

The difference between the current sales revenue and the sales at the break-even point is called the

Accepted Answer

A)  contribution margin
B)  margin of safety
C)  price factor
D)  operating leverageE) A) and B)
F) B) and D)

Question 14

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

Accepted Answer

A) True 
 B)False

Question 15

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following types of cost is shown in the cost data below?

Accepted Answer

A)  mixed cost
B)  variable cost
C)  fixed cost
D)  period costE) A) and D)
F) B) and C)

Question 17

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.     
-Rent on warehouse of $12,000 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 18

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60, respectively. Corn has fixed costs of $378,000. The break-even point in units is

Accepted Answer

A)  8,000 units
B)  6,300 units
C)  12,600 units
D)  10,500 unitsE) A) and B)
F) B) and C)

Question 19

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Accepted Answer

A) True 
 B)False

Question 20

If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, the old and new break-even sales (units) , respectively, if the unit selling price increases by $10 are

Accepted Answer

A)  6,000 units and 5,294 units
B)  18,000 units and 6,000 units
C)  18,000 units and 12,857 units
D)  9,000 units and 15,000 unitsE) All of the above
F) C) and D)

Exam 20: Cost-Volume-Profit Analysis

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Correct AnswerverifiedShow Answer

The manufacturing costs of Carrie Industries for the first three months of the year are provided below. Using the high-low method, determine the (a) variable cost per unit, and (b) the total fixed cost.

Correct Answerverifieda. ($115,500 - $79,5...View AnswerShow Answer

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 straight-line depreciation costs A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Correct AnswerverifiedShow Answer

Cost-volume-profit analysis cannot be used if which of the following occurs?

Correct AnswerverifiedShow Answer

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Ink used for screen printing A)Variable cost B)Fixed cost C)Mixed cost

Correct AnswerverifiedShow Answer

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60, respectively. Corn has fixed costs of $378,000. The break-even point in units is

Correct AnswerverifiedShow Answer

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, the amount of sales (units) required to realize an operating income of $200,000 is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

Correct AnswerverifiedShow Answer

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, the contribution margin ratio is

Correct AnswerverifiedShow Answer

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

Correct AnswerverifiedShow Answer

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Correct AnswerverifiedShow Answer

If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, the old and new break-even sales (units) , respectively, if the unit selling price increases by $10 are

Correct AnswerverifiedShow Answer

Rocky Company reports the following data: Sales $800,000 Variable costs 300,000 Fixed costs 120,000 Rocky Company's operating leverage is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The difference between the current sales revenue and the sales at the break-even point is called the

Correct AnswerverifiedShow Answer

Which of the following types of cost is shown in the cost data below?

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding fixed and variable costs?

Correct AnswerverifiedShow Answer

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. -Rent on warehouse of $12,000 per month A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

Correct AnswerverifiedShow Answer

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

Correct AnswerverifiedShow Answer

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