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Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

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Question 91

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The data required for determining the break-even point for a business are the total estimated fixed costs for a period, stated as a percentage of net sales.

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Question 92

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Which of the following is an example of a cost that varies in total as the number of units produced changes?

A) salary of a production supervisor
B) direct materials cost
C) property taxes on factory buildings
D) straight-line depreciation on factory equipment

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Question 93

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Assuming that last year's fixed costs totaled $960,000, what was Carter Co.'s break-even point in units?

Connor Company's fixed costs are $400,000, the unit selling price is $25, and the unit variable costs are $15.What is the break-even sale units if the variable costs are increased by $2?

Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000.The operating leverage is

Understanding how costs behave is useful to management for all the following reasons except

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was

For purposes of analysis, mixed costs can generally be separated into their variable and fixed components.

The graph of a variable cost when plotted against its related activity base appears as a

If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, what is the contribution margin ratio?

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sale units if the variable costs are decreased by $2?

The following data are available from the accounting records of Willow Creek Co.for the month ended May 31.During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit.There were no beginning inventories, and all units were completed no work in process. Selling and administrative expenses: a Prepare a variable costing income statement. b Prepare an absorption costing income statement.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17.What amount of units must be sold in order to realize an operating income of $100,000?

For the past year, Pedi Company had fixed costs of $70,000, unit variable costs of $32, and a unit selling price of $40.For the coming year, no changes are expected in revenues and costs, except that property taxes are expected to increase by $10,000.Determine the break-even sales units for a the past year and b the coming year.

If yearly insurance premiums are increased, this change in fixed costs will result in an increase in the break-even point.

Bobby Company has fixed costs of $160,000.The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for product X and Y is 60% and 40%, respectively.Determine the break-even point in units of X and Y.

If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales units?

Which of the following costs is a mixed cost?

For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and anticipated break-even of 1,715 sales units. a Compute the unit sales price. b Compute the sales units required to realize an operating profit of $8,000.Round your answer to the nearest whole number.