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Exam 21: Cost-Volume-Profit Analysis

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Question 111

Multiple Choice

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

A) 2.5
B) 7.5
C) 2.0
D) 0

E) None of the above
F) A) and D)

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Question 112

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The range of activity over which changes in cost are of interest to management is called the relevant range.

A) True
B) False

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Question 113

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Copper Hill Inc. manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:Number of Printers Produced70,00090,000100,000Total costs: ??Complete the preceding cost schedule, identifying each cost by the appropriate letter (a-o).

Use this information for Rusty Co. to answer the questions that follow. ​ Rusty Co. sells two products, X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ​ ​ -What was Rusty Co.'s sales mix last year?

What was Carter Co.'s unit selling price of E, with E representing one overall "enterprise" product?

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

A firm operated at 90% of capacity for the past year, during which fixed costs were $420,000, variable costs were 40% of sales, and sales were $1,000,000. Operating profit was

If fixed costs are $500,000 and variable costs are 60% of break-even sales, profit is $0 when sales revenue is $930,000.

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. What is the amount of sales in units (rounded to a whole number) required to realize an operating income of $200,000?

Zeke Company sells 25,000 units at $21 per unit. Variable costs are $10 per unit, and fixed costs are $75,000. The contribution margin ratio (rounded to the nearest whole percent) and the unit contribution margin are

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Grant Company has sales of $300,000, and the break-even point in sales dollars is $225,000. Determine the company's margin of safety percentage. If required, round answer to nearest whole number.

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

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).​ (a)Prepare a variable costing income statement. (b)Prepare an absorption costing income statement.

Use this information for Rusty Co. to answer the questions that follow. ​ Rusty Co. sells two products, X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ​ ​ -What was Rusty Co.'s unit variable cost of the overall product E?

Bluegill Company sells 45,000 units at $18 per unit. Fixed costs are $62,000, and income from operations is $298,000. Determine the (a) variable cost per unit, (b) unit contribution margin, and (c) contribution margin ratio.

Match the following terms (a-e) with their definitions. -Contribution margin divided by income from operations

Given the following cost data, what type of cost is shown?​​ ​

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty's variable utilities cost per machine hour. Round to the nearest cent.​