FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 21: Cost-Volume-Profit Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

True/False

Review LaterAdd Note

Review Later

The margin of safety is the amount that sales can drop before the company incurs a loss.

A) True
B) False

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

Select cost information for Seacrest Enterprises is as follows: Based on this information:

A) Both direct materials and rent expense are variable costs.
B) Utilities expense is a mixed cost and rent expense is a variable cost.
C) Utilities expense is a mixed cost and rent expense is a fixed cost.
D) Direct materials is a fixed cost and utilities expense is a mixed cost.
E) Both direct materials and utilities expense are mixed costs.

F) A) and B)
G) C) and D)

Correct Answer

verified

Show Answer

Question 83

True/False

Review LaterAdd Note

The contribution margin ratio is the percent by which the margin of safety exceeds the break-even point.

A target income refers to:

McCoy Brothers manufactures and sells two products,A and Z in the ratio of 5:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the break-even point in composite units.

Assume that sales are predicted to be $3,750,the expected contribution margin is $1,500,and a net loss of $250 is anticipated.The break-even point in sales dollars is:

A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.Total fixed costs are $70,000.The pretax net income is:

Whiting Company sells a mix of three related products.Total fixed costs are $144,000.The following additional information is available for Whiting Company. Use the weighted average method to determine the company's break-even point for composite units.

A step-wise variable cost can be separated into a fixed component and a variable component.

The unit contribution margin divided by the selling price per unit is the _____________.

Total contribution margin in dollars divided by pretax income is the:

The high-low method is used to derive the variable cost per unit and total fixed costs using just the highest and lowest volume levels.

Select cost information for Klondike Corporation is as follows: Based on this information:

Leeks Company's product has a contribution margin per unit of $11.25 and a contribution margin ratio of 22.5%.What is the selling price of the product?

Use the following information to determine the break-even point in sales dollars:

Kent Manufacturing produces a product that sells for $50.00 and has variable costs of $24.00 per unit.Fixed costs are $260,000.Kent can buy a new production machine that will increase fixed costs by $11,400 per year,but will decrease variable costs by $3.50 per unit.Compute the contribution margin per unit if the machine is purchased.

Raven Company has a target of earning $70,000 pre-tax income.The contribution margin ratio is 30%.What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

The relevant range of operations is a range of volume neither close to zero nor at maximum capacity.

Ludington Corporation provides the following data from a recent period for its manufacture of shoes: variable manufacturing costs,$24,000;variable selling costs,$12,000;and total fixed costs,$40,000.Sales were $60,000 based on 12,000 units sold during the period.Calculate the contribution margin and the contribution margin ratio.

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