Jordan Company Jordan Company manufactures a single product.Each unit sells for $15.The firm's projected costs are listed below: $\begin{array}{ll} \text { Variable costs per unt: }\\ ~~\text { Prochıction } & \$ 5 \\ ~~\text { SG\&A } & \$ 1 \\ \text { Fixed costs: } & \\ ~~\text { Prochıction } & \$ 40,000 \\ ~~\text { SG\&A } & \$ 60,000 \\ ~~\text { Estimated volume } & 20,000 \text { units } \end{array}$ Refer to Jordan Company.What is Jordan's projected margin of safety for the current year?

A) $133,333 B) $150,000 C) $80,000 D) $100,000 A) $133,333 B) $150,000 C) $80,000 D) $100,000

John Anderson Company Below is an income statement for John Anderson Company: $\begin{array}{ll} \text { Sales } & \$ 300,000 \\ \text { Variable costs } & \underline{(150,000)} \\ \text { Contribution margin } & \$ 150,000 \\ \text { Fixed costs } & \underline{(100,000)} \\ \text { Profit before taxes } & \underline{\$ 50,000} \end{array}$ Refer to John Anderson Company.If the unit sales price for John Anderson's sole product was $10,how many units would it have needed to sell to produce a profit of $40,000?

A) 27,500 B) 29,000 C) 28,000 D) can't be determined from the information given A) 27,500 B) 29,000 C) 28,000 D) can't be determined from the information given

Mark Smith Company Below is an income statement for Mark Smith Company: $\begin{array}{ll} \text { Sales } & \$ 400,000 \\ \text { Variable costs } & (\underline{200,000}) \\ \text { Contribution margin } & \$ 200,000 \\ \text { Fixed costs } & (\underline{125,000}) \\ \text { Profit before taxes }& \underline{\$ 75,000} \end{array}$ Refer to Mark Smith Company.What is the company's degree of operating leverage (DOL)?

A) 2.67 B) 3.2 C) 5.33 D) 10.67 A) 2.67 B) 3.2 C) 5.33 D) 10.67

Shelton Company Below is an income statement for Shelton Company: $\begin{array}{ll} \text { Sales } & \$ 600,000 \\ \text { Variable costs } & \underline{(150,000)} \\ \text { Contribution margin } & \$ 450,000 \\ \text { Fixed costs } & \underline{(300,000)} \\ \text { Profit before taxes } & \underline{\$ 150,000} \end{array}$ Refer to Shelton Company.What is Shelton's degree of operating leverage?

A) 1.33 B) 2.00 C) 3.00 D) 4.00 A) 1.33 B) 2.00 C) 3.00 D) 4.00

Palmer Company Below is an income statement for Palmer Company: $\begin{array}{ll} \text { Sales } & \$ 400,000 \\ \text { Variable costs } & \underline{(125,000)} \\ \text { Contribution margin } & \$ 275,000 \\ \text { Fixed costs } & \underline{(200,000)} \\ \text { Profit before taxes } & \underline{\$ 75,000} \end{array}$ Refer to Palmer Company.What was Palmer's margin of safety?

A) $200,000 B) $75,000 C) $100,000 D) $109,091 A) $200,000 B) $75,000 C) $100,000 D) $109,091

Exam 9: Break-Even Point and Cost-Volume-Profit Analysis

Jordan Company Jordan Company manufactures a single product.Each unit sells for $15.The firm's projected costs are listed below: Variable costs per unt: \nobreakspace\nobreakspace Prochıction \ 5 \nobreakspace\nobreakspace SG\&A \ 1 Fixed costs: \nobreakspace\nobreakspace Prochıction \ 40,000 \nobreakspace\nobreakspace SG\&A \ 60,000 \nobreakspace\nobreakspace Estimated volume 20,000 units Refer to Jordan Company.What is Jordan's projected margin of safety for the current year?

(Multiple Choice)

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Question 101

To compute the break-even point in units,which of the following formulas is used?

(Multiple Choice)

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Question 102

The margin of safety is an effective measure of risk for a company.

(True/False)

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Question 103

Dawson Corporation Dawson Corporation predicts it will produce and sell 40,000 units of its sole product in the current year.At that level of volume,it projects a sales price of $30 per unit,a contribution margin ratio of 40 percent,and fixed costs of $5 per unit. Refer to Dawson Corporation.What is the company's projected breakeven point in dollars and units?

(Essay)

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Question 104

When computing profit on an after-tax basis,it is necessary to divide the pretax profit by the effective tax rate.

(True/False)

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Question 105

John Anderson Company Below is an income statement for John Anderson Company: Sales \ 300,000 Variable costs Contribution margin \ 150,000 Fixed costs Profit before taxes Refer to John Anderson Company.If the unit sales price for John Anderson's sole product was $10,how many units would it have needed to sell to produce a profit of $40,000?

(Multiple Choice)

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Question 106

A process that focuses only on factors that change from one course of action to another is referred to as ___________________________________.

(Short Answer)

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Question 107

After the break-even point is reached,each dollar of contribution margin is a dollar of before-tax profit.

(True/False)

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Question 108

Mark Smith Company Below is an income statement for Mark Smith Company: Sales \ 400,000 Variable costs () Contribution margin \ 200,000 Fixed costs () Profit before taxes Refer to Mark Smith Company.What is the company's degree of operating leverage (DOL)?

(Multiple Choice)

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Question 109

At the break-even point,fixed costs are always

(Multiple Choice)

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Question 110

On a break-even chart,the break-even point is located at the point where the total

(Multiple Choice)

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Question 111

The method of cost accounting that lends itself to break-even analysis is

(Multiple Choice)

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Question 112

Shelton Company Below is an income statement for Shelton Company: Sales \ 600,000 Variable costs Contribution margin \ 450,000 Fixed costs Profit before taxes Refer to Shelton Company.What is Shelton's degree of operating leverage?

(Multiple Choice)

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Question 113

After the break-even point is reached,each dollar of contribution margin is a dollar of after-tax profit.

(True/False)

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Question 114

Campbell Manufacturing incurs annual fixed costs of $250,000 in producing and selling a single product.Estimated unit sales are 125,000.An after-tax income of $75,000 is desired by management.The company projects its income tax rate at 40 percent.What is the maximum amount that Campbell can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at $6?

(Multiple Choice)

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Question 115

Palmer Company Below is an income statement for Palmer Company: Sales \ 400,000 Variable costs Contribution margin \ 275,000 Fixed costs Profit before taxes Refer to Palmer Company.What was Palmer's margin of safety?

(Multiple Choice)

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Question 116

On a CVP graph,the total revenue line intersects the y-axis at zero.

(True/False)

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Question 117

Contribution margin divided by revenue is referred to as the ________________________________________.

(Short Answer)

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Question 118

With respect to fixed costs,CVP analysis assumes total fixed costs

(Multiple Choice)

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Question 119

To compute the break-even point in units,which of the following formulas is used?

The margin of safety is an effective measure of risk for a company.

When computing profit on an after-tax basis,it is necessary to divide the pretax profit by the effective tax rate.

A process that focuses only on factors that change from one course of action to another is referred to as ___________________________________.

After the break-even point is reached,each dollar of contribution margin is a dollar of before-tax profit.

Mark Smith Company Below is an income statement for Mark Smith Company: Sales \ 400,000 Variable costs () Contribution margin \ 200,000 Fixed costs () Profit before taxes Refer to Mark Smith Company.What is the company's degree of operating leverage (DOL)?

At the break-even point,fixed costs are always

On a break-even chart,the break-even point is located at the point where the total

The method of cost accounting that lends itself to break-even analysis is

Shelton Company Below is an income statement for Shelton Company: Sales \ 600,000 Variable costs Contribution margin \ 450,000 Fixed costs Profit before taxes Refer to Shelton Company.What is Shelton's degree of operating leverage?

After the break-even point is reached,each dollar of contribution margin is a dollar of after-tax profit.

Palmer Company Below is an income statement for Palmer Company: Sales \ 400,000 Variable costs Contribution margin \ 275,000 Fixed costs Profit before taxes Refer to Palmer Company.What was Palmer's margin of safety?

On a CVP graph,the total revenue line intersects the y-axis at zero.

Contribution margin divided by revenue is referred to as the ________________________________________.

With respect to fixed costs,CVP analysis assumes total fixed costs

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

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