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

Sunglo Corporation Sunglo Corporation manufactures and sells two products: A and B. The operating results of the company are as follows: In addition, the company incurred total fixed costs in the amount of $10,000. Refer to Sunglo Corporation. How many total units would the company have needed to sell to break even?

On a CVP graph, the total fixed cost line parallels the x-axis.

Sunshine Company manufactures a single product. In the prior year, the company had sales of $90,000, variable costs of $50,000, and fixed costs of $30,000. Sunshine expects its cost structure and sales price per unit to remain the same in the current year, however total sales are expected to increase by 20 percent. If the current year projections are realized, net income should exceed the prior year's net income by:

John Anderson Company Below is an income statement for John Anderson Company: 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?

CVP analysis requires costs to be categorized as

The following information pertains to Apollo Company's cost-volume-profit relationships: How much will be contributed to profit before taxes by the 1,501st unit sold?

In a multi-product environment, CVP analysis makes the assumption that a company's sales mix is constant.

Pratt Corporation Information relating to the current operations of Pratt Corporation follows: Refer to Pratt Corporation. Compute Pratt's degree of operating leverage.

Sunglo Corporation Sunglo Corporation manufactures and sells two products: A and B. The operating results of the company are as follows: In addition, the company incurred total fixed costs in the amount of $10,000. Refer to Sunglo Corporation. If the company had sold a total of 10,500 units, consistent with CVP assumptions, how many of those units would be Product B?

Which of the following factors is involved in studying cost-volume-profit relationships?

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

Total fixed costs remain unchanged with levels of production.

Shelton Company Below is an income statement for Shelton Company: Refer to Shelton Company. Based on the cost and revenue structure on the income statement, what was Shelton's break-even point in dollars?

Price Corporation Price Corporation manufactures and sells two products: A and B. The projected information on these two products for the coming year is presented below: Total fixed costs for the company are projected at $10,000. Refer to Price Corporation. How many units would the company need to sell to produce an income before income taxes equal to 15 percent of sales?

Fixed costs per unit remain constant with levels of production.

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

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

The following information pertains to Mercury Company's cost-volume-profit relationships: How much will be contributed to profit before taxes by the 1,001st unit sold?

Palmer Company Below is an income statement for Palmer Company: Refer to Palmer Company. What was Palmer's margin of safety?

Variable costs per unit vary directly with levels of production.