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Exam 5: Cost Volume Profit Analysis

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Question 91

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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 $0.50 a unit?

A) 66,000
B) 70,125
C) 74,800
D) 60,000

E) B) and D)
F) All of the above

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Question 92

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

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($600,000 - $400,000...

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Question 93

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

Which of the following describes the behavior of a variable cost per unit?

A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000. (a) What is the break-even point in sales dollars? (b) What is the operating income? (c) If neither the relationship between variable costs and sales nor the amount of fixed costs is expected to change in the next year, how much additional operating income can be earned by increasing sales by $110,000?

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

Cost-volume-profit analysis can be presented in both equation form and graphic form.

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

Match the following terms (a-e) with their definitions.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

In cost-volume-profit analysis, all costs are classified into the following two categories:

This question has been removed by Cengage as inapplicable.

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Break-even analysis is one type of cost-volume-profit analysis.

Which of the following statements is true regarding fixed and variable costs?

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

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: What was Rusty Co.'s unit variable cost of E?

Bobby Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. The sales mix for product X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y.

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

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 contribution margin of E?