Question 1

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

Accepted Answer

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

Question 2

The manufacturing cost of Carrie Industries for the first 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 cost.

Accepted Answer

(a)($115,500 - $79,5...

Question 3

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

Accepted Answer

A)   decrease
B)   increase
C)   remain the same
D)   increase or decrease,depending upon the percentage increase in wage ratesE) None of the above
F) All of the above

Question 4

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

Accepted Answer

A)   $0.78 per unit and $4,000
B)   $0.40 per unit and $8,000
C)   $4.00 per unit and $800
D)   $7.80 per unit and $4,000E) All of the above
F) B) and D)

Question 5

If sales are $820,000,variable costs are 55% of sales,and operating income is $260,000,what is the contribution margin ratio?

Accepted Answer

A)   45%
B)   55%
C)   62%
D)   32%E) A) and C)
F) A) and B)

Question 6

Most operating decisions of management focus on a narrow range of activity called the

Accepted Answer

A)   relevant range of production
B)   strategic level of production
C)   optimal level of production
D)   tactical operating level of productionE) B) and D)
F) All of the above

Question 7

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Accepted Answer

A)   38%
B)   26.8%
C)   11.8%
D)   62%E) None of the above
F) A) and B)

Question 8

What was Carter Co.'s variable cost of E?

Accepted Answer

A)   $140
B)   $70
C)   $64
D)   $60E) A) and B)
F) B) and D)

Question 9

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

Accepted Answer

A)   varies in increasing proportion with changes in the activity level
B)   varies in decreasing proportion with changes in the activity level
C)   remains constant with changes in the activity level
D)   varies in direct proportion with the activity levelE) B) and C)
F) All of the above

Question 10

The data required for determining the break-even point for a business are the total estimated fixed costs for a period,stated as a percentage of net sales.

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

Unit contribution margin of sa...

Question 12

A firm operated at 90% of capacity for the past year,during which fixed costs were $420,000,variable costs were 40% of sales,and sales were $1,000,000.Operating profit was

Accepted Answer

A)   $180,000
B)   $420,000
C)   $1,080,000
D)   $980,000E) A) and B)
F) None of the above

Question 13

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%.

Accepted Answer

A) True 
 B)False

Question 14

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Accepted Answer

A)   38%
B)   26.8%
C)   11.8%
D)   62%E) B) and C)
F) A) and B)

Question 15

Unit variable cost does not change as the number of units of activity changes.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The difference between the current sales revenue and the sales at the break-even point is called the

Accepted Answer

A)   contribution margin
B)   margin of safety
C)   price factor
D)   operating leverageE) None of the above
F) A) and B)

Question 19

The graph of a variable cost when plotted against its related activity base appears as a

Accepted Answer

A)   circle
B)   rectangle
C)   straight line
D)   curved lineE) A) and B)
F) B) and C)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 19: Cost-Volume-Profit Analysis

The manufacturing cost of Carrie Industries for the first 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 cost.

Correct Answerverified(a)($115,500 - $79,5...View AnswerShow Answer

The graph of a variable cost when plotted against its related activity base appears as a

Correct AnswerverifiedShow Answer

What was Carter Co.'s variable cost of E?

Correct AnswerverifiedShow Answer

If variable costs per unit increased because of an increase in hourly wage rates,the break-even point would

Correct AnswerverifiedShow Answer

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%.

Correct AnswerverifiedShow Answer

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Correct AnswerverifiedShow Answer

The difference between the current sales revenue and the sales at the break-even point is called the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The data required for determining the break-even point for a business are the total estimated fixed costs for a period,stated as a percentage of net sales.

Correct AnswerverifiedShow Answer

If sales are $425,000,variable costs are 62% of sales,and operating income is $50,000,what is the contribution margin ratio?

Correct AnswerverifiedShow Answer

A firm operated at 90% of capacity for the past year,during which fixed costs were $420,000,variable costs were 40% of sales,and sales were $1,000,000.Operating profit was

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Unit variable cost does not change as the number of units of activity changes.

Correct AnswerverifiedShow Answer

If sales are $820,000,variable costs are 55% of sales,and operating income is $260,000,what is the contribution margin ratio?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most operating decisions of management focus on a narrow range of activity called the

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedUnit contribution margin of sa...View AnswerShow Answer

The manufacturing cost of Carrie Industries for the first 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 cost.

Correct Answer
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(a)($115,500 - $79,5...
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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

Correct Answer
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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.

Correct Answer
verified
Unit contribution margin of sa...
View Answer