Question 1

Cost-volume-profit analysis requires management to classify all costs as either fixed or variable with respect to production or sales volume within the relevant range of operations.

Accepted Answer

A) True 
 B)False

Question 2

As the volume increases, fixed cost per unit of output remains constant.

Accepted Answer

A) True 
 B)False

Question 3

A company has total fixed costs of $200,000. Its product sells for $25 per unit and variable costs amount to $15 per unit. The company has a target pre-tax income of $50,000. How many units must be sold to achieve this pre-tax target income?

Accepted Answer

Targeted sales in un...

Question 4

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

Exam 21: Cost-Volume-Profit Analysis

Correct Answer
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A company has total fixed costs of $200,000. Its product sells for $25 per unit and variable costs amount to $15 per unit. The company has a target pre-tax income of $50,000. How many units must be sold to achieve this pre-tax target income?

Correct Answer
verified
Targeted sales in un...
View Answer

As the volume increases, fixed cost per unit of output remains constant.

Correct Answer
verified

Cost-volume-profit analysis requires management to classify all costs as either fixed or variable with respect to production or sales volume within the relevant range of operations.

Correct Answer
verified

Exam 21: Cost-Volume-Profit Analysis

Correct AnswerverifiedShow Answer

A company has total fixed costs of $200,000. Its product sells for $25 per unit and variable costs amount to $15 per unit. The company has a target pre-tax income of $50,000. How many units must be sold to achieve this pre-tax target income?

Correct AnswerverifiedTargeted sales in un...View AnswerShow Answer

As the volume increases, fixed cost per unit of output remains constant.

Correct AnswerverifiedShow Answer

Cost-volume-profit analysis requires management to classify all costs as either fixed or variable with respect to production or sales volume within the relevant range of operations.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Targeted sales in un...
View Answer

Correct Answer
verified

Correct Answer
verified