FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

True/False

Review LaterAdd Note

Review Later

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

A) True
B) False

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

Manley Co.manufactures office furniture.During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625.In its slowest month, the company made 1,800 desks at a cost of $49,500.Using the high-low method of cost estimation, total fixed costs are

A) $61,875
B) $33,875
C) $24,750
D) cannot be determined from the data given

E) All of the above
F) A) and B)

Correct Answer

verified

Show Answer

Question 73

True/False

Review LaterAdd Note

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%.

Given the following cost and activity observations for Bounty Company's utilities, use the high­low method to calculate Bounty' variable utilities costs per machine hour.Round your answer to the nearest cent.

Variable costs as a percentage of sales for Lemon Inc.are 80%, current sales are $600,000, and fixed costs are $130,000.How much will operating income change if sales increase by $40,000?

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

When units manufactured exceed units sold:

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed

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 11,500 units.

What would Timmer's net income be for the year using variable costing?

The Klein Company reports the following data: Determine Klein Company's operating leverage.Round your answer to two decimal places.

Match the following terms a-e with their definitions. -Graphically shows costs, sales, and operating profit or loss at various levels of units sold

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

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.

Douglas Company has a contribution margin ratio of 30%.If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit, and fixed costs are $270,000. Determine the a unit sales price, and b break-even points in sales units if the company desires a target profit of $36,000.

The range of activity over which changes in cost are of interest to management is called the relevant range.

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?