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Exam 5: Cost-Volume-Profit Relationships

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Question 21

Multiple Choice

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The following information pertains to Nova Co.'s cost-volume-profit relationships: How much will be contributed to net operating income by the 1,001st unit sold?

A) $650
B) $500
C) $150
D) $0

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Question 22

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Bois Corporation has provided its contribution format income statement for January. -The degree of operating leverage is closest to:

A) 0.11
B) 9.37
C) 0.27
D) 3.66

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Question 23

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Valdez Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The break-even point in unit sales is closest to:

Derst Inc.sells a particular textbook for $140.Variable expenses are $25 per book.At the current volume of 6,000 books sold per year the company is just breaking even.Given these data,the annual fixed expenses associated with the textbook total:

Cobble Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $499,000 per month.The company is currently selling 5,000 units per month.The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 900 units.What should be the overall effect on the company's monthly net operating income of this change?

Sunnripe Corporation manufactures and sells two types of beach towels,standard and deluxe.Sunnripe expects the following operating results next year: Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Maziarz Corporation produces and sells a single product. Data concerning that product appear below: -Assume the company's target profit is $14,000.The unit sales to attain that target profit is closest to:

Sales at East Corporation declined from $100,000 to $80,000,while net operating income declined by 300%.Given these data,the company must have had an operating leverage of:

Nussbaum Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The number of units that must be sold to achieve a target profit of $16,100 is closest to:

Thornbrough Corporation produces and sells a single product with the following characteristics: The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Thornbrough Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $53,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,000 units.What should be the overall effect on the company's monthly net operating income of this change?

Ploeger Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The break-even point in dollar sales is closest to:

Carver Corporation produces a product which sells for $40.Variable manufacturing costs are $18 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 15% of the selling price is paid on each unit sold.The contribution margin per unit is:

Coultrap Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The contribution margin per unit is closest to:

The break-even point can be determined by simply adding together all of the expenses from the income statement.

Muzzillo Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. Required: a.If the selling price increases by $4 per unit and the sales volume decreases by 300 units,what would be the estimated net operating income? b.If the variable cost per unit increases by $6,spending on advertising increases by $3,000,and unit sales increase by 1,800 units,what would be the estimated net operating income?

Bristo Corporation has sales of 2,000 units at $35 per unit.Variable expenses are 40% of the selling price.If total fixed expenses are $22,000,the degree of operating leverage is:

Given the following data: The break-even point in dollars is:

Caneer Corporation produces and sells a single product.Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $44,000 is closest to:

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

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If the selling price increases by $3 per unit and the sales volume decreases by 400 units,the net operating income would be closest to: