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Exam 21: Cost-Volume-Profit Analysis

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Question 61

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Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, total fixed costs are

A) $21,000
B) $25,400
C) $42,000
D) $13,000

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

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Question 62

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​ (a) If Swannanoa Company's budgeted sales are $1,000,000, fixed costs are $350,000, and variable costs are $600,000, what is the budgeted contribution margin ratio? (b) If the contribution margin ratio is 30%, sales are $900,000, and fixed costs are $200,000, what is the operating income?

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(a)Contribution Margin Ratio =...

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Question 63

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Zipee Inc.'s unit selling price is $90, 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?

Harley Company has sales of $500,000, variable costs are 75% of sales, and operating income is $40,000. What is Harley's operating leverage?

Rocky Company reports the following data:​Sales$800,000Variable costs300,000Fixed costs120,000​Rocky Company's operating leverage is

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

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

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 14,500 units.

Perfect Stampers makes and sells aftermarket hub caps. The variable cost for each hub cap is $4.75, and the hub cap sells for $9.95. Perfect Stampers has fixed costs per month of $3,120. Compute the contribution margin per unit and break-even sales in units and in dollars for the month.

What was Carter Co.'s sales mix last year?

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 weighted average unit contribution margin?

Silver River Company sells products S and T and has made the following estimates for the coming year:? Fixed costs are estimated at $202,400. Determine (a) the estimated sales in units of the overall product necessary to reach the break-even point for the coming year, (b) the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year, and (c) the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year. If required, round interim calculations to two decimal places.

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Match the following terms with their definitions. -Remain the same in total dollar amount as the level of activity changes

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 answer to the nearest whole number.

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents the

A company with a break-even point at $900,000 in sales revenue had fixed costs of $225,000. When actual sales were $1,000,000, variable costs were $750,000. Determine (a) the margin of safety expressed in dollars, (b) the margin of safety expressed as a percentage of sales, (c) the contribution margin ratio, and (d) the operating income.

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

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

Define operating leverage. Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.