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Exam 6: Cost-Volume-Profit Relationship

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Question 41

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Bello Corporation produces and sells two products. In the most recent month, Product D99P had sales of $33,000 and variable expenses of $15,840. Product G71P had sales of $42,000 and variable expenses of $4,410. The fixed expenses of the entire company were $49,790. -The break-even point for the entire company is closest to:

A) $25,210
B) $49,790
C) $68,205
D) $70,040

E) A) and B)
F) A) and C)

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Question 42

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The following is Addison Corporation's contribution format income statement for last month: The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month. -What is the company's degree of operating leverage?

A) 0.12
B) 2.5
C) 0.4
D) 3.3

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

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Question 43

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Compos Corporation has provided the following data concerning its only product: -What is the margin of safety in dollars?

Compos Corporation has provided the following data concerning its only product: -The margin of safety as a percentage of sales is closest to:

Carver Company produces a product which sells for $30. Variable manufacturing costs are $15 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 10% of the selling price is paid on each unit sold. The contribution margin per unit is:

Pedaci Corporation produces and sells a single product. Data concerning that product appear below: -Assume the company's monthly target profit is $17,000. The dollar sales to attain that target profit is closest to:

A company with sales of $100,000, variable expenses of $70,000, and fixed expenses of $50,000 will reach its break-even point if sales are increased by $20,000.

The following is last month's contribution format income statement: What is the company's margin of safety in dollars?

Zins Corporation produces and sells a single product. The company's contribution format income statement for August appears below: Required: Redo the company's contribution format income statement assuming that the company sells 1,400 units.

Monsky Corporation produces and sells a single product whose contribution margin ratio is 60%. The company's monthly fixed expense is $420,000 and the company's monthly target profit is $13,000. The dollar sales to attain that target profit is closest to:

In August, Bliek Corporation sold 8,300 units of its only product. Its total sales were $664,000, its total variable expenses were $415,000, and its total fixed expenses were $204,000. Required: a. Construct the company's contribution format income statement for August in good form. b. Redo the company's contribution format income statement assuming that the company sells 8,600 units.

The following data pertain to last month's operations: The break-even point in dollar sales is:

Litke Corporation, a company that produces and sells a single product, has provided its contribution format income statement for February. If the company sells 5,100 units, its net operating income should be closest to:

Loss Corporation's contribution margin ratio is 63% and its fixed monthly expenses are $76,000. Assume that the company's sales for March are expected to be $179,000. Required: Estimate the company's net operating income for March, assuming that the fixed monthly expenses do not change. Show your work!

Tassone Corporation has provided the following data concerning its only product: The margin of safety as a percentage of sales is closest to:

Fletcher Company has three products with the following characteristics: -If total units sold remain unchanged, but the sales mix shifts more heavily toward Product C, one would expect the overall contribution margin ratio to:

A manufacturer of tiling grout has supplied the following data: -The company's degree of operating leverage is closest to:

A tile manufacturer has supplied the following data: -The company's contribution margin ratio is closest to:

If company A has a higher degree of operating leverage than company B, then:

If the sales mix changes, the average contribution margin ratio is likely to change as well.