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Exam 19: Cost-Volume-Profit Analysis

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Question 121

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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 122

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Companies with large amounts of fixed costs will generally have a high operating leverage.

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B) False

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Question 123

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A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Total variable costs change as the level of activity changes.

Currently,the unit selling price is $50,the variable cost,$34,and the total fixed costs,$108,000.A proposal is being evaluated to increase the selling price to $54.

When a business sells more than one product at varying selling prices,the business's break-even point can be determined as long as the number of products does not exceed

Gladstorm Enterprises sells a product for $60 per unit.The variable cost is $20 per unit,while fixed costs are $85,000.Determine the (a)break-even point in sales units,and (b)break-even point in sales units if the selling price increased to $80 per unit.Round your answer to the nearest whole number.

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.

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

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

What would Timmer's net income be for the year using absorption costing?

The manufacturing cost of Mocha Industries for three months of the year are provided below: ​ Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed costs.

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

If sales total $2,000,000,fixed costs total $800,000,and variable costs are 60% of sales,the contribution margin ratio is 40%.

The Dean Company has sales of $500,000,and the break-even point in sales dollars of $300,000.Determine the company's margin of safety percentage.

If sales are $400,000,variable costs are 80% of sales,and operating income is $40,000,what is the operating leverage?

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.

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

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

A low operating leverage is normal for highly automated industries.