FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Cost Volume Profit Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Matching

Review LaterAdd Note

Review Later

Match the following terms with their definitions.

Premises

Responses

Vary in proportion to changes in activity levels

Fixed costs

A specific activity range over which the cost changes are of interest.

Break-even point

Remain the same in total dollar amount as the level of activity changes

Relevant range

The excess of sales revenues over variable costs

Contribution margin

Where a business's revenues exactly equal costs

Variable costs

Premises

Vary in proportion to changes in activity levels

A specific activity range over which the cost changes are of interest.

Remain the same in total dollar amount as the level of activity changes

The excess of sales revenues over variable costs

Where a business's revenues exactly equal costs

Responses

Fixed costs

Break-even point

Relevant range

Contribution margin

Variable costs

Show Answer

Correct Answer

Premises

Responses

Vary in proportion to changes in activity levels

A specific activity range over which the cost changes are of interest.

Remain the same in total dollar amount as the level of activity changes

The excess of sales revenues over variable costs

Where a business's revenues exactly equal costs

Premises

Vary in proportion to changes in activity levels

A specific activity range over which the cost changes are of interest.

Remain the same in total dollar amount as the level of activity changes

The excess of sales revenues over variable costs

Where a business's revenues exactly equal costs

Responses

Question 62

True/False

Review LaterAdd Note

Review Later

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

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

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 sales mix last year?

If a business sells two products, it is not possible to estimate the break-even point.

Spice Inc.'s unit selling price is $60, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 8,000 units?

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

Direct materials and direct labor costs are examples of variable costs of production.

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents

If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?

Copper Hill Inc. manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year. The following partially completed manufacturing cost schedule has been prepared: Complete the preceding cost schedule, identifying each cost by the appropriate letter (a) through (o).

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.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

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

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 variable cost of E?

When a business sells more than one product at varying selling prices, the business's break-even point can be determined as long as the number of products does not exceed

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 (b) the coming year.

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

Most operating decisions of management focus on a narrow range of activity called the

Lee Industry sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. What is the contribution margin ratio?

Which of the following is not an assumption underlying cost-volume-profit analysis?