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Exam 5: Cost Volume Profit Analysis

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Question 51

True/False

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The data required for determining the break-even point for a business are the total estimated fixed costs for a period, stated as a percentage of net sales.

A) True
B) False

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Question 52

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As production increases, the fixed cost per unit

A) increases
B) decreases
C) remains the same
D) either increases or decreases, depending on the variable costs

E) A) and D)
F) B) and C)

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Question 53

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Bluegill Company sells 45,000 units at $18 per unit. Fixed costs are $62,000 and income from operations is $298,000. Determine: (a) variable cost per unit (b) unit contribution margin (c) contribution margin ratio.

The manufacturing cost of Mocha Industries for 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 costs.

Trail Bikes, Inc. sells three Deluxe bikes for every seven Standard bikes.  The Deluxe bike sells for $1,800 and has variable costs of $1,200.  The Standard bike sells for $600 and has variable costs of $200.   Required (a)  If Trail Bikes has fixed costs that total $1,702,000, how many bikes must be sold in order  for the company to break even?   (b) How many of these bikes will be Deluxe bikes and how many will be the Standard bikes?

The graph of a variable cost when plotted against its related activity base appears as a

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

Which of the following describes the behavior of the fixed cost per unit?

If the property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.

Steven 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 product X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

A mixed cost has characteristics of both a variable and a fixed 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: Assuming that last year's fixed costs totaled $675,000. What was Rusty Co.'s break-even point in units?

Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s sales mix last year?

Total fixed costs change as the level of activity changes.

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 60%.

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

This question has been removed by Cengage as inapplicable.

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: What was Rusty Co.'s weighted average unit contribution margin?

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20. What is the break-even sales (units) if fixed costs are reduced by $40,000?

If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would