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

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Question 21

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For the coming year, River Company estimates fixed costs at $109,000, the unit variable cost at $21, and the unit selling price at $85. Determine (a) the break-even point in units of sales, (b) the unit sales required to realize operating income of $150,000 and (c) the probable operating income if sales total $500,000. Round units to the nearest whole number and percentage to one decimal place.

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Question 22

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If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales (units) ?

A) 3,425 units
B) 2,381 units
C) 2,000 units
D) 4,808 units

E) C) and D)
F) All of the above

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Question 23

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Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service, such as United Postal Service?

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $.50 a unit?

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 variable cost?

The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.

The point in operations at which revenues and expired costs are exactly equal is called the break-even point.

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

If fixed costs increased and variable costs per unit decreased, the break-even point would:

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

If sales are $525,000, variable costs are 53% of sales, and operating income is $50,000, what is the contribution margin ratio?

Match the following terms with their definitions.

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 (units) ?

Total variable costs change as the level of activity changes.

Costs that vary in total in direct proportion to changes in an activity level are called:

Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X's and 35,000 units of Y's. Related data are: What was Rusty Co.'s weighted average unit contribution margin?

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:

The Waterfall Company sells a product for $150 per unit. The variable cost is $80 per unit, and fixed costs are $270,000. Determine the (a) break-even point in sales units, and (b) break-even points in sales units if the company desires a target profit of $36,000. Round your answer to the nearest whole number.

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

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: