Question 1

A cost that changes as volume changes,but at a nonconstant rate,is called a:

Accepted Answer

A)  Variable cost.
B)  Curvilinear cost.
C)  Step-wise variable cost.
D)  Fixed cost.
E)  Differential cost.F) A) and E)
G) B) and D)

Question 2

Wolowitz Company's product has a contribution margin per unit of $62.50 and a contribution margin ratio of 25%.What is the per unit selling price of the product?

Accepted Answer

The answer of Wolowitz Company's product has a contribution margin...

Question 3

Use the following information to determine the margin of safety in dollars:

Accepted Answer

A)  $88,500.
B)  $108,500.
C)  $173,600.
D)  $326,400.
E)  $500,000.F) D) and E)
G) C) and D)

Question 4

The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year.Compute the number of units that must be sold in order to achieve a target pretax income of $130,000.

Accepted Answer

A)  53,165.
B)  81,250.
C)  36,207.
D)  50,000.
E)  58,621.F) C) and D)
G) B) and D) E

Question 5

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the contribution margin per unit.

Accepted Answer

A)  $450.
B)  $300.
C)  $200.
D)  $190.
E)  $150.F) B) and D)
G) A) and E)

Question 6

A CVP graph presents data on:

Accepted Answer

A)  Profit and loss on a per unit basis.
B)  Profit,loss,and break-even on a total dollar basis.
C)  Profit,loss,and break-even on a per unit basis.
D)  Only profit and loss on a total basis.
E)  Profit and loss on a budget and actual basis.F) None of the above
G) All of the above B

Question 7

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit.The selling price of $100 is not expected to change.Forrester's current break-even sales are $400,000 and current break-even units are 4,000.If Forrester purchases this new equipment,the revised contribution margin ratio would be:

Accepted Answer

A)  30%.
B)  60%.
C)  40%.
D)  10%.
E)  70%.F) D) and E)
G) None of the above

Question 8

A company's product sells at $12 per unit and has a $5 per unit variable cost.The company's total fixed costs are $98,000.The break-even point in units is:

Accepted Answer

A)  5,158.
B)  7,000.
C)  8,167.
D)  14,000.
E)  19,600.F) C) and D)
G) A) and D)

Question 9

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Accepted Answer

A)  Current product mix.
B)  Relevant mix.
C)  Sales mix.
D)  Inventory cost ratio.
E)  Production ratio.F) A) and C)
G) A) and B)

Question 10

The following information is available for a company's utility cost for operating its machines over the last four months.  Using the high-low method,the estimated total fixed cost for utilities is:

Accepted Answer

A)  $1,500.
B)  $3,600.
C)  $6,000.
D)  $3,300.
E)  $2,100.F) A) and D)
G) D) and E)

Question 11

Cost-volume-profit analysis can be used to compute expected income from predicted sales and cost levels.

Accepted Answer

A) True 
 B)False

Question 12

The contribution margin ratio:

Accepted Answer

A)  Is the percent of each sales dollar that remains after deducting the total unit variable cost.
B)  Is the percent of each sales dollar that remains after deducting the total unit fixed cost.
C)  Is the percent of each sales dollar that remains to cover the variable and fixed costs.
D)  Cannot be used in conjunction with other analytical tools.
E)  Is the same as the unit contribution margin.F) A) and C)
G) C) and E)

Question 13

The following information is available for a company's cost of sales over the last five months.  Using the high-low method,the estimated total fixed cost is:

Accepted Answer

A)  $25,000.
B)  $30,000.
C)  $13,692.
D)  $100,000.
E)  $50,000.F) A) and B)
G) B) and E)

Question 14

An important tool in predicting the volume of activity,the costs to be incurred,the sales to be made,and the profit to be earned is:

Accepted Answer

A)  Target income analysis.
B)  Cost-volume-profit analysis.
C)  Least-squares regression analysis.
D)  Variance analysis.
E)  Process costing.F) A) and D)
G) A) and E) B

Question 15

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars for Flannigan Company.

Accepted Answer

A)  $1,560,000.
B)  $2,612,612.
C)  $1,587,388.
D)  $2,895,652.
E)  $2,460,000.F) A) and E)
G) C) and D)

Question 16

Craft Company and Jarmer Company each have sales of $200,000 and costs of $140,000.Craft Company's costs consist of $40,000 fixed and $100,000 variable,while Jarmer Company's costs consist of $100,000 fixed and $40,000 variable.Which company will suffer the greatest decline in profits if sales volume declines by 15%? Prepare income statements and compute degree of operating leverage to assess.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Since Jarmer's degree of oper...

Question 17

Fuschia Company's contribution margin per unit is $12.Total fixed costs are $84,000.What is Fuschia's break-even point in units?

Accepted Answer

A)  7,000.
B)  26,520.
C)  57,600.
D)  5,760.
E)  70,000.F) B) and C)
G) B) and D)

Question 18

On a typical cost-volume-profit graph,unit sales are shown on the horizontal axis and both dollars of sales and dollars of costs are represented on the vertical axis.

Accepted Answer

A) True 
 B)False

Question 19

During March,a firm expects to its total sales to be $160,000,its total variable costs to be $95,000,and its total fixed costs to be $25,000.The contribution margin for March is:

Accepted Answer

A)  $65,000.
B)  $90,000.
C)  $120,000.
D)  $40,000.
E)  $25,000.F) A) and E)
G) None of the above

Question 20

The sales level at which a company neither earns a profit nor incurs a loss is the:

Accepted Answer

A)  Relevant range.
B)  Margin of safety.
C)  Step-wise variable level.
D)  Break-even point.
E)  Contribution margin.F) None of the above
G) A) and E)

Exam 21: Cost-Volume-Profit Analysis

A cost that changes as volume changes,but at a nonconstant rate,is called a:

Correct Answer
verified

Wolowitz Company's product has a contribution margin per unit of $62.50 and a contribution margin ratio of 25%.What is the per unit selling price of the product?

Correct Answer
verified

Use the following information to determine the margin of safety in dollars:

Correct Answer
verified

The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year.Compute the number of units that must be sold in order to achieve a target pretax income of $130,000.

Correct Answer
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E

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the contribution margin per unit.

Correct Answer
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A CVP graph presents data on:

Correct Answer
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B

Correct Answer
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A company's product sells at $12 per unit and has a $5 per unit variable cost.The company's total fixed costs are $98,000.The break-even point in units is:

Correct Answer
verified

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Correct Answer
verified

The following information is available for a company's utility cost for operating its machines over the last four months. Using the high-low method,the estimated total fixed cost for utilities is:

Correct Answer
verified

Cost-volume-profit analysis can be used to compute expected income from predicted sales and cost levels.

Correct Answer
verified

The contribution margin ratio:

Correct Answer
verified

The following information is available for a company's cost of sales over the last five months. Using the high-low method,the estimated total fixed cost is:

Correct Answer
verified

An important tool in predicting the volume of activity,the costs to be incurred,the sales to be made,and the profit to be earned is:

Correct Answer
verified
B

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars for Flannigan Company.

Correct Answer
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Correct Answer
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Since Jarmer's degree of oper...
View Answer

Fuschia Company's contribution margin per unit is $12.Total fixed costs are $84,000.What is Fuschia's break-even point in units?

Correct Answer
verified

On a typical cost-volume-profit graph,unit sales are shown on the horizontal axis and both dollars of sales and dollars of costs are represented on the vertical axis.

Correct Answer
verified

During March,a firm expects to its total sales to be $160,000,its total variable costs to be $95,000,and its total fixed costs to be $25,000.The contribution margin for March is:

Correct Answer
verified

The sales level at which a company neither earns a profit nor incurs a loss is the:

Correct Answer
verified

Exam 21: Cost-Volume-Profit Analysis

A cost that changes as volume changes,but at a nonconstant rate,is called a:

Correct AnswerverifiedShow Answer

Wolowitz Company's product has a contribution margin per unit of $62.50 and a contribution margin ratio of 25%.What is the per unit selling price of the product?

Correct AnswerverifiedShow Answer

Use the following information to determine the margin of safety in dollars:

Correct AnswerverifiedShow Answer

The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year.Compute the number of units that must be sold in order to achieve a target pretax income of $130,000.

Correct AnswerverifiedE

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the contribution margin per unit.

Correct AnswerverifiedShow Answer

A CVP graph presents data on:

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

A company's product sells at $12 per unit and has a $5 per unit variable cost.The company's total fixed costs are $98,000.The break-even point in units is:

Correct AnswerverifiedShow Answer

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Correct AnswerverifiedShow Answer

The following information is available for a company's utility cost for operating its machines over the last four months. Using the high-low method,the estimated total fixed cost for utilities is:

Correct AnswerverifiedShow Answer

Cost-volume-profit analysis can be used to compute expected income from predicted sales and cost levels.

Correct AnswerverifiedShow Answer

The contribution margin ratio:

Correct AnswerverifiedShow Answer

The following information is available for a company's cost of sales over the last five months. Using the high-low method,the estimated total fixed cost is:

Correct AnswerverifiedShow Answer

An important tool in predicting the volume of activity,the costs to be incurred,the sales to be made,and the profit to be earned is:

Correct AnswerverifiedB

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars for Flannigan Company.

Correct AnswerverifiedShow Answer

Correct Answerverified Since Jarmer's degree of oper...View AnswerShow Answer

Fuschia Company's contribution margin per unit is $12.Total fixed costs are $84,000.What is Fuschia's break-even point in units?

Correct AnswerverifiedShow Answer

On a typical cost-volume-profit graph,unit sales are shown on the horizontal axis and both dollars of sales and dollars of costs are represented on the vertical axis.

Correct AnswerverifiedShow Answer

During March,a firm expects to its total sales to be $160,000,its total variable costs to be $95,000,and its total fixed costs to be $25,000.The contribution margin for March is:

Correct AnswerverifiedShow Answer

The sales level at which a company neither earns a profit nor incurs a loss is the:

Correct AnswerverifiedShow Answer

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E

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B

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B

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Since Jarmer's degree of oper...
View Answer

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