FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Cost Volume Profit Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 101

True/False

Review LaterAdd Note

Review Later

Companies with large amounts of fixed costs will generally have a high operating leverage.

A) True
B) False

Correct Answer

verified

Show Answer

Question 102

True/False

Review LaterAdd Note

Review Later

The point in operations at which revenues and expenses are exactly equal is called the break-even point.

A) True
B) False

Correct Answer

verified

Show Answer

Question 103

Multiple Choice

Review LaterAdd Note

A cost that has characteristics of both a variable cost and a fixed cost is called a

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 11,500 units.

As production increases, variable costs per unit

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

If employees accept a wage contract that increases the unit contribution margin, the break-even point will decrease.

Even if a business sells six products, it is possible to estimate the break-even point.

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

Costs that remain constant in total dollar amount as the level of activity changes are called

A business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of $240,000, a break-even point of $960,000, and operating income of $60,000 for the current year.  Calculate the current year's sales.

For the current year ending January 31, Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50. For the coming year, a new wage contract will increase the unit variable cost to $55.50. The selling price of $70.00 per unit is expected to remain the same. (a) Compute the break-even sales (units) for the current year. Round your answer to the nearest whole number. (b) Compute the anticipated break-even sales (units) for the coming year, assuming the new wage contract is signed.

Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point

If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars?

If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

Penny Company sells 25,000 units at $59 per unit. Variable costs are $29 per unit, and loss from operations is $(50,000). Determine: (a) unit contribution margin (b) contribution margin ratio (c) fixed costs per unit at production of 25,000 units.

A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.

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

Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s unit selling price of E, with E representing one overall "enterprise" product?