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Exam 21: Cost Behavior and Cost-Volume-Profit Analysis

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Question 31

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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 weighted average variable cost?

A) $140
B) $ 70
C) $ 64
D) $ 60

E) A) and B)
F) A) and C)

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Question 32

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Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

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Question 33

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Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service, such as United Postal Service?

The Keith Company reports the following data. Determine Keith Company's operating leverage.

The Dean Company has sales of $500,000, and the break-even point in sales dollars of $300,000. Determine the company's margin of safety percentage.

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

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

Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X's and 35,000 units of Y's. Related data are: Assuming that last year's fixed costs totaled $675,000. What was Rusty Co.'s break-even point in units?

Given the following costs and activities for Downing Company electrical costs, use the high-low method to calculate Downing's variable electrical costs per machine hour.

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

Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are: Calculate the following: a. Safari Co.'s sales mix b. Safari Co.'s weighted average unit selling price c. Safari Co's weighted average unit contribution margin d. Safari Co's break-even point assuming that last year's fixed costs were $160,000.

In a cost-volume-profit chart, the

Direct materials and direct labor costs are examples of variable costs of production.

The three most common cost behavior classifications are:

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $.50 a unit?

If fixed costs are $400,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, what is the break-even sales (units) if fixed costs are increased by $80,000?

If the property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.

If direct materials cost per unit increases, the break-even point will decrease.