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Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

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Question 81

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Cost behavior refers to the manner in which a cost changes as the related activity changes.

A) True
B) False

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Question 82

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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 unit selling price of E? c.Safari Co.'s unit contribution margin of E? d.Safari Co.'s break­even point assuming that last year's fixed costs were $160,000.

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a.Orks: 21,000/21,000 + 14,000...

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Question 83

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

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?

A mixed cost has characteristics of both a variable and a fixed cost.

Costs that vary in total in direct proportion to changes in an activity level are called

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

If a business had a capacity of $10,000,000 of sales, actual sales of $6,000,000, break-even sales of $4,200,000, fixed costs of $1,800,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Match the following terms with their definitions. -The excess of sales revenues over variable costs

Absorption costing is required for financial reporting under generally accepted accounting principles.

Flying Cloud Co.has the following operating data for its manufacturing operations: The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant, the next break-even point for Flying Cloud Co.will be

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

Which of the following conditions would cause the break-even point to decrease?

As production increases, the fixed cost per unit

Given the following information: Variable cost per unit = $5.00 July fixed cost per unit = $7.00 Units sold and produced in July = 28,000 What is total estimated cost for August if 30,000 units are projected to be produced and sold?

The manufacturing cost of Calico Industries for three months of the year are provided below: Using the high-low method, the variable cost per unit and the total fixed costs are

Cost behavior refers to the manner in which

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