Exam 6: Reporting and Analyzing Inventory

Moonwalker's CVP income statement included sales of 5,000 units, a selling price of $100, variable expenses of $60 per unit, and fixed expenses of $110,000.Net income is

Only direct materials, direct labor, and variable manufacturing overhead costs are considered product costs when using

The sales mix percentages for Novotna's Boston and Seattle Divisions are 70% and 30%.The contribution margin ratios are: Boston (40%) and Seattle (30%).Fixed costs are $2,220,000.What is Novotna's break-even point in dollars?

Capitol Manufacturing sells 4,000 units of Product A annually, and 6,000 units of Product B annually.The sales mix for Product A is

For Wickham Co., sales is $3,000,000, fixed expenses are $900,000, and the contribution margin ratio is 36%.What is required sales in dollars to earn a target net income of $600,000?

If a division manager's compensation is based upon the division's net income, the manager may decide to meet the net income targets by increasing production when using

Sales mix is a measure of the percentage increase in sales from period to period.

Use the following information for questions Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2015-2017. Sales were 20 units in 2015, 16 units in 2016, and 24 units in 2017. -Income under absorption costing for 2016 is

Cost-volume-profit analysis is the study of the effects of

In 2016, Carow sold 3,000 units at $500 each.Variable expenses were $250 per unit, and fixed expenses were $500,000.The same selling price is expected for 2017.Carow is tentatively planning to invest in equipment that would increase fixed costs by 20%, while decreasing variable costs per unit by 20%.What is Carow's break-even point in units for 2017?

For Sanborn Co., sales is $1,000,000, fixed expenses are $300,000, and the contribution margin per unit is $60.What is the break-even point?

The margin of safety tells a company how far sales can drop before it will be operating at a loss.

When absorption costing is used for external reporting, variable costing can still be used for internal reporting purposes.

Use the following information for questions Sprinkle Co. sells its product for $60 per unit. During 2016, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $15, direct labor $9, and variable overhead $3. Fixed costs are: $720,000 manufacturing overhead, and $90,000 selling and administrative expenses. -The per unit manufacturing cost under absorption costing is

Use the following information for questions Mercantile Corporation has sales of $2,000,000, variable costs of $800,000, and fixed costs of $900,000. -Mercantile's degree of operating leverage is

A company can sell all the units it can produce of either Product A or Product B but not both.Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make.If there are 5,000 machine hours available to manufacture a product, income will be

Brooks Corporation can sell all the units it can produce of either Plain or Fancy but not both.Plain has a unit contribution margin of $72 and takes two machine hours to make and Fancy has a unit contribution margin of $90 and takes three machine hours to make.There are 2,400 machine hours available to manufacture a product.What should Brooks do?

The one primary difference between variable and absorption costing is that under

The CVP income statement classifies costs as variable or fixed and computes a contribution margin.

Use the following information for questions Swanson Company has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs $6,660,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%. -The break-even point in dollars is