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Exam 20: Cost-Volume-Profit Analysis

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Question 41

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A cost that has characteristics of both a variable cost and a fixed cost is called a

A) variable/fixed cost
B) mixed cost
C) discretionary cost
D) sunk cost

E) A) and B)
F) None of the above

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Question 42

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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. -Total salaries of quality control supervisors (One supervisor must be added for each additional work shift.) A)Graph 1 B)Graph 2 C)Graph 3 D)Graph 4 E)Graph 5

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Question 43

Multiple Choice

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Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Property taxes on factory, building, and equipment A)Variable cost B)Fixed cost C)Mixed cost

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

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?

Contribution margin is

Global Publishers has collected the following data for recent months: a. Using the high-low method, find variable cost per unit, total fixed costs, and the total cost equation. b. What is the estimated cost for a month in which 19,000 issues are published?

Match each of the following costs of producing T-shirts with the appropriate classification (a-c). -Maintenance costs with sewing machine company (The cost is $2,000 per year plus $0.001 for each machine hour of use.) 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: ​ -Assuming that last year's fixed costs totaled $675,000, Rusty Co.'s break-even point in units was

A firm operated at 90% of capacity for the past year, during which fixed costs were $420,000, variable costs were 40% of sales, and sales were $1,000,000. Operating income was

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

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, the break-even sales (units) is

For the past year, Iris Company had fixed costs of $6,708,000, a unit variable cost of $444, and a unit selling price of $600. For the coming year, no changes are expected in revenues and costs, except that a new wage contract will increase variable costs by $6 per unit. Determine the break-even sales (units) for (a) the past year and (b) the coming year.

If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, the contribution margin ratio is

If the contribution margin ratio for France Company is 45%, sales are $425,000, and fixed costs are $100,000, the operating income is

Cost behavior refers to the manner in which a cost changes as the related activity changes.

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, respectively, are

Lee Company's sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. The contribution margin ratio is

Total fixed costs change as the level of activity changes.