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Exam 19: Cost Behavior and Cost-Volume-Profit Analysis

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Question 31

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Silver River Company sells Products S and T and has made the following estimates for the coming year: Fixed costs are estimated at $202,400. Determine (a) the estimated sales in units of the overall product necessary to reach the break-even point for the coming year, (b) the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year, and (c) the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year.

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Question 32

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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 weighted average unit selling price?

A) $200
B) $100
C) $ 80
D) $ 88

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

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Question 33

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

If direct materials cost per unit increases, the break-even point will increase.

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

When the fixed costs are $120,000 and the contribution margin is $30, the break-even point is

Given the following cost data, what type of cost is shown?

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%.

Because variable costs are assumed to change in direct proportion to changes in the activity level, the graph of the variable costs when plotted against the activity level appears as a circle.

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.

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (unit ) if the variable costs are decreased by $2?

If fixed costs are $240,000, the unit selling price is $32, and the unit variable costs are $20, what are the old and new break-even sales (units) if the unit selling price increases by $4?

A company with a break-even point at $900,000 in sales revenue had fixed costs of $225,000. When actual sales were $1,000,000 variable costs were $750,000. Determine (a) the margin of safety expressed in dollars, (b) the margin of safety expressed as a percentage of sales, (c) the contribution margin ratio, and (d) the operating income.

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?

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

Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are: Calculate the following: a. Safari Co.'s sales mix b. Safari Co.'s weighted average unit selling price c. Safari Co's weighted average unit contribution margin d. Safari Co's break-even point assuming that last year's fixed costs were $160,000.

Given the following cost data, what type of cost is shown?

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

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.

Total variable costs change as the level of activity changes.