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Exam 19: Cost-Volume-Profit Analysis

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Question 31

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

A) electricity per KWH to operate factory equipment
B) direct materials cost
C) straight-line depreciation on factory equipment
D) wages of assembly worker

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

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Question 32

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

A) True
B) False

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Question 33

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Total fixed costs change as the level of activity changes.

Harley Company has sales of $500,000,variable costs are 75% of sales,and operating income is $40,000.What is Harley's operating leverage?

For the current year ending April 30,Hal Company expects fixed costs of $60,000,a unit variable cost of $70,and anticipated break-even of 1,715 sales units. Round your answer to the nearest whole number.

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.

As production increases,variable costs per unit

If Kaden Company's fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24.What is the break-even sales (units) ?

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

Which of the graphs in Figure 21-1 illustrates the nature of a mixed cost?

If a business had sales of $4,000,000 and a margin of safety of 25%,the break-even point was

Currently,the unit selling price is $50,the variable cost,$34,and the total fixed costs,$108,000.A proposal is being evaluated to increase the selling price to $54.

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

Carrolton,Inc.currently sells widgets for $80 per unit.The variable cost is $30 per unit and total fixed costs equal $240,000 per year.Sales are currently 20,000 units annually. ​ The company is considering a 20% drop in selling price that it believes will raise units sold by 20%.Assuming all costs stay the same,what is the impact on income if this change is made?

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

The Tom Company reports the following data: Determine Tom Company's operating leverage.

What was Rusty Co.'s unit variable cost of E?

If fixed costs are $650,000 and the unit contribution margin is $30,the sales necessary to earn an operating income of $30,000 are 14,000 units.

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?

Unit variable cost does not change as the number of units of activity changes.