Exam 21: Cost-Volume-Profit Analysis

Dean Company has sales of $500,000, and the break-even point in sales dollars is $300,000. Determine the company's margin of safety percentage. If required, round answer to nearest whole number.

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

Blane Company has the following data:Total sales$800,000Total variable costs$300,000Fixed costs$200,000Units sold50,000 units​What will operating income be if units sold double to 100,000 units?

-Which of the graphs in Figure 21-1 illustrates the behavior of a total variable cost?

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Assuming that last year's fixed costs totaled $960,000, what was Carter Co.'s break-even point in units?

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

Because variable costs are assumed to change in direct proportion to changes in the activity level, the graph of the variable costs when plotted against the activity level appears as a circle.

Use this information for Rusty Co. to answer the questions that follow. ​ Rusty Co. sells two products, X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ​ ​ -What was Rusty Co.'s weighted average unit selling price?

As production increases, variable costs per unit

If the contribution margin ratio for France Company is 45%, sales were $425,000, and fixed costs were $100,000, what was the income from operations?

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

If fixed costs are $850,000 and variable costs are 60% of sales, what is the break-even point (dollars)?

If direct materials cost per unit increases, the break-even point will decrease.

For purposes of analysis, mixed costs can generally be separated into their variable and fixed components.

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

In cost-volume-profit analysis, all costs are classified into which of the following two categories?