Question 1

Sanfran has the following data:  How many units must Sanfran produce and sell in order to achieve a profit of $30,000 per month?

Accepted Answer

A)  10,000 units.
B)  8,824 units.
C)  25,000 units.
D)  15,000 units.

Question 2

The average selling price is $.60 per unit,the average variable cost is $.36 per unit,and the total fixed costs are $1,500.If operating profits of $900 are desired,a sales volume of 2,500 units is necessary.($1,500 + 900)/($0.60 - .36)= 10,000 units.

Accepted Answer

A) True 
 B)False

Question 3

The Blue Company is currently selling its single product for $15.Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $4,800 per month.If Blue increases its selling price by 10%,its variable cost ratio will:

Accepted Answer

A)  Not change.
B)  Decrease.
C)  Increase.
D)  Cannot determine with the information given.

Question 4

Which of the following changes to a company's contribution income statement will always lower the break-even point (either in units or in dollars) ?

Accepted Answer

A)  Sales price increases by 10%.
B)  Sales price decreases by 5%.
C)  Variable costs increase by 10% and fixed costs decrease by 5%.
D)  Variable costs decrease by 5% and fixed costs increase by 10%.

Question 5

The contribution margin ratio is the contribution margin per unit divided by the selling price per unit.The statement made in the question is a definition of the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Exam 3: Fundamentals of Cost-Volume-Profit Analysis

The contribution margin ratio is the contribution margin per unit divided by the selling price per unit.The statement made in the question is a definition of the contribution margin ratio.

Correct Answer
verified

The average selling price is $.60 per unit,the average variable cost is $.36 per unit,and the total fixed costs are $1,500.If operating profits of $900 are desired,a sales volume of 2,500 units is necessary.($1,500 + 900)/($0.60 - .36)= 10,000 units.

Correct Answer
verified

Which of the following changes to a company's contribution income statement will always lower the break-even point (either in units or in dollars) ?

Correct Answer
verified

Sanfran has the following data: How many units must Sanfran produce and sell in order to achieve a profit of $30,000 per month?

Correct Answer
verified

The Blue Company is currently selling its single product for $15.Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $4,800 per month.If Blue increases its selling price by 10%,its variable cost ratio will:

Correct Answer
verified

Exam 3: Fundamentals of Cost-Volume-Profit Analysis

The contribution margin ratio is the contribution margin per unit divided by the selling price per unit.The statement made in the question is a definition of the contribution margin ratio.

Correct AnswerverifiedShow Answer

The average selling price is $.60 per unit,the average variable cost is $.36 per unit,and the total fixed costs are $1,500.If operating profits of $900 are desired,a sales volume of 2,500 units is necessary.($1,500 + 900)/($0.60 - .36)= 10,000 units.

Correct AnswerverifiedShow Answer

Which of the following changes to a company's contribution income statement will always lower the break-even point (either in units or in dollars) ?

Correct AnswerverifiedShow Answer

Sanfran has the following data: How many units must Sanfran produce and sell in order to achieve a profit of $30,000 per month?

Correct AnswerverifiedShow Answer

The Blue Company is currently selling its single product for $15.Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $4,800 per month.If Blue increases its selling price by 10%,its variable cost ratio will:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified