Use the following information for items Brad Sherwood Corporation sells two types of computers; one is designed for audio applications and the other for video applications.Sherwood incurs $300,125 in fixed costs. $\text { Per-unit data on the two products is presented blow: }$ $\begin{array}{llcc} \underline{\text { Unit data } } &\underline{\text { Audio computer } }&\underline{ \text { Video computer }}\\ \text {Selling price } &\$1,500&\$1,750\\ \text { Variable costs } &\underline{1,100}&\underline{1,200}\\ \text { Contribution margin }& \underline{\$400}&\underline{\$550}\\ \text { Salses mix } &75\%&25\%\\ \end{array}$ -The weighted-average contribution margin is

A) $437.50. B) $475.00. C) $1,125.00. D) $375.00. A) $437.50. B) $475.00. C) $1,125.00. D) $375.00.

Gift Gallery sold 2,000 Zooglars during 2020.Information is provided concerning the Zooglar product: $\begin{array}{ll} \text { Sales } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots\ldots \ldots \ldots & \$ 60,000 \\ \text { Variable costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 24,000 \\ \text { Fixed costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \underline{10,000} \\ \text { Net income }\ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots &\underline{ \$ 26.000} \end{array}$ If Gift Gallery sells 30 more units, by how much will its profit increase?

A) $18 B) $540 C) $390 D) $900 A) $18 B) $540 C) $390 D) $900

A) is a measure of the percentage increase in sales from period to period. B) is not important to managers when different products have substantially different contribution margins. C) is a measure of the percentage increase in sales by product from period to period. D) is the relative proportion in which each product is sold when a company sells more than one product. A) is a measure of the percentage increase in sales from period to period. B) is not important to managers when different products have substantially different contribution margins. C) is a measure of the percentage increase in sales by product from period to period. D) is the relative proportion in which each product is sold when a company sells more than one product.

Use the following information for questions In September, Smith Company had the following financial statement amounts related to producing 500 units: $\begin{array}{ll} \text { Direct materials } & \$ 27,000 \\ \text { Depreciation expense } &11,000\\ \text { Sales revenue } & 95,000 \\ \text { Direct labour } & 23,000 \\ \text { Rent expense } & 25,000 \end{array}$ -How much is the net profit, (loss), for September?

A) $45,000 B) $9,000 C) $68,000 D) $20,000 A) $45,000 B) $9,000 C) $68,000 D) $20,000

A division sold 280,000 calculators during 2020: $\begin{array}{llcc} \text {Sales } &&\$5,600,000\\ \text {Variable costs: } &\\ \text { Materials} &\$1,400,000\\ \text {Order processing }& 280,000&\\ \text { Billing labour} &1,120,000\\ \text { Delivery costs} &840,000\\ \text {Selling expenses } &\underline{560,000}\\ \text { Total variable costs } &&4,200,000\\ \text { Fixed costs } &&750,000\\ \end{array}$ How much is the contribution margin per unit, rounded to the nearest cent?

A) $17.32 B) $15.00 C) $7.00 D) $5.00 A) $17.32 B) $15.00 C) $7.00 D) $5.00

Exam 6: Cost-Volume-Profit

Company A and Company B sell their products for exactly the same sales price.Both have the same annual total costs.Company A's variable and fixed costs at break-even total $60,000 and $30,000 respectively.Company B's variable and fixed costs at break-even total $30,000 and $60,000 respectively.Both companies have the same net income.If both companies experience an increase in sales, which company will have the higher net income?

(Multiple Choice)

4.8/5

(41)

Question 61

Use the following information for items Brad Sherwood Corporation sells two types of computers; one is designed for audio applications and the other for video applications.Sherwood incurs $300,125 in fixed costs. $\text { Per-unit data on the two products is presented blow: }$ Selling price \1 ,500 \1 ,750 Variable costs Contribution margin Salses mix 75\% 25\% -The weighted-average contribution margin is

(Multiple Choice)

4.9/5

(31)

Question 62

Saver Company produces only one product.Monthly fixed expenses are $20,000, monthly unit sales are 3,500, and the unit contribution margin is $7.How much is monthly net profit?

(Multiple Choice)

4.8/5

(35)

Question 63

Proops Company has a weighted-average unit contribution margin of $30 for its two products: Drew and Carey.Expected sales for Proops are 40,000 Drews and 60,000 Careys.Fixed expenses are $1,800,000.How many Drews would Proops sell at the break-even point?

(Multiple Choice)

4.7/5

(29)

Question 64

Gift Gallery sold 2,000 Zooglars during 2020.Information is provided concerning the Zooglar product: Sales \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots \ 60,000 Variable costs \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots 24,000 Fixed costs \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots Net income \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots If Gift Gallery sells 30 more units, by how much will its profit increase?

(Multiple Choice)

4.8/5

(31)

Question 65

Which is not true concerning sales mix?

(Multiple Choice)

4.8/5

(36)

Question 66

In a competitive business environment, using break-even analysis would be least effective

(Multiple Choice)

4.7/5

(36)

Question 67

Tiny Tots Toys has actual sales of $400,000 and a break-even point of $260,000.How much is its margin of safety ratio?

(Multiple Choice)

4.9/5

(31)

Question 68

How many sales are required to earn a target after-tax net income of $80,000 if total fixed costs are $100,000, the contribution margin ratio is 40%, and the tax rate is 25%?

(Multiple Choice)

4.9/5

(27)

Question 69

Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian break-even point in dollars is

(Multiple Choice)

4.8/5

(39)

Question 70

Sales mix

(Multiple Choice)

4.8/5

(37)

Question 71

Which of the following is false?

(Multiple Choice)

4.8/5

(33)

Question 72

Fixed costs are $400,000 and the contribution margin per unit is $80.What is the break-even point?

(Multiple Choice)

4.8/5

(41)

Question 73

Use the following information for questions In September, Smith Company had the following financial statement amounts related to producing 500 units: Direct materials \ 27,000 Depreciation expense 11,000 Sales revenue 95,000 Direct labour 23,000 Rent expense 25,000 -How much is the net profit, (loss), for September?

(Multiple Choice)

4.9/5

(43)

Question 74

Croc Catchers calculates its contribution margin to be less than zero.Which statement is true?

(Multiple Choice)

4.8/5

(44)

Question 75

In using the contribution margin technique

(Multiple Choice)

4.9/5

(40)

Question 76

A division sold 280,000 calculators during 2020: Sales \5 ,600,000 Variable costs: Materials \1 ,400,000 Order processing 280,000 Billing labour 1,120,000 Delivery costs 840,000 Selling expenses Total variable costs 4,200,000 Fixed costs 750,000 How much is the contribution margin per unit, rounded to the nearest cent?

(Multiple Choice)

4.8/5

(40)

Question 77

Phi Kappa is planning to hold a seminar for students at the University Centre.It has two options: $\text { OPTION 1: Fixed rental cast of } \$ 1,000 \text { and } \$ 12 \text { per person for baoks }$ or $\text { OPTION 2: Fixed rental cost of } \$ 3,000 \text { and } \$ 8 \text { per person for books }$ Tickets will be $5 per student.Other items will be donated by recruiters wishing to network with students.Which option will cause the biggest loss if very few students attend?

(Multiple Choice)

4.7/5

(46)

Question 78

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000.How much is the selling price per unit?

(Multiple Choice)

4.8/5

(38)

Question 79

Hardage Company has a contribution margin per unit of $15 and a contribution margin ratio of 60%.How much is the selling price of each unit?

(Multiple Choice)

4.7/5

(31)

Question 80

Saver Company produces only one product.Monthly fixed expenses are $20,000, monthly unit sales are 3,500, and the unit contribution margin is $7.How much is monthly net profit?

Proops Company has a weighted-average unit contribution margin of $30 for its two products: Drew and Carey.Expected sales for Proops are 40,000 Drews and 60,000 Careys.Fixed expenses are $1,800,000.How many Drews would Proops sell at the break-even point?

Which is not true concerning sales mix?

In a competitive business environment, using break-even analysis would be least effective

Tiny Tots Toys has actual sales of $400,000 and a break-even point of $260,000.How much is its margin of safety ratio?

How many sales are required to earn a target after-tax net income of $80,000 if total fixed costs are $100,000, the contribution margin ratio is 40%, and the tax rate is 25%?

Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian break-even point in dollars is

Sales mix

Which of the following is false?

Fixed costs are $400,000 and the contribution margin per unit is $80.What is the break-even point?

Croc Catchers calculates its contribution margin to be less than zero.Which statement is true?

In using the contribution margin technique

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000.How much is the selling price per unit?

Hardage Company has a contribution margin per unit of $15 and a contribution margin ratio of 60%.How much is the selling price of each unit?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters