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Exam 19: Cost-Volume-Profit Analysis

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Question 161

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Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s break-even point in units?

A) 16,875 units
B) 30,100 units
C) 30,000 units
D) 11,250 units

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

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Question 162

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

A) True
B) False

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Question 163

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Because variable costs are assumed to change in direct proportion to changes in the activity level,the graph of the variable costs when plotted against the activity level appears as a circle.

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.

O'Boyle Co.'s fixed costs are $256,000,the unit selling price is $36,and the unit variable costs are $20,what is the break-even sales (units) ?

Variable costs are costs that vary on a per-unit basis with changes in the activity level.

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 required to realize an operating income of $200,000?

Which of the following is an example of a cost that varies in total as the number of units produced changes?

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

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

Steven 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.

Spice Inc.'s unit selling price is $60,the unit variable costs are $35,fixed costs are $125,000,and current sales are 10,000 units.How much will operating income change if sales increase by 8,000 units?

Variable costs are costs that vary in total in direct proportion to changes in the activity level.

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.

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

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

The point where the profit line intersects the horizontal axis on the profit-volume chart represents

The Grant Company has sales of $300,000,and the break-even point in sales dollars if $225,000.Determine the company's margin of safety percentage.

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

A cost that has characteristics of both a variable cost and a fixed cost is called a