Exam 6: Decision-Making: Costvolumeprofit

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?

A company sells a product which has a unit sales price of $9, unit variable cost of $6 and total fixed costs of $60,000.How many units must the company sell to break even?

Using the assumptions of CVP analysis, if a company thought its sales may increase by 50% in the upcoming year over last year, the variable costs in total will change by a similar percentage.

If M&H Ltd.has a margin of safety of $100,000, which of the following statements is correct?

The following monthly data are available for Wackadoos, Inc.which produces only one product: Selling price per unit, $42; Unit variable expenses, $14; Total fixed expenses, $42,000; Actual sales for the month of June, 4,000 units.How much is the margin of safety for the company for June?

Which one of the following is a consideration of CVP analysis?

Companies generally set sales targets higher than break-even figures because

Which one of the following is an assumption of CVP analysis?

Sutton Company produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During April, 700 drives were sold.Fixed costs for April were $4 per unit for a total of $2,800 for the month.How much does Sutton's operating income increase for each $1,000 increase in revenue per month?

Needles, Inc.was evaluating its margin of safety.Which one of the following is true?

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

Which one of the following is true concerning a CVP income statement?

Using the contribution margin format income statement, which of the following will result from an increase of one unit sold?

Which concept answers the following question: 'If budgeted revenues are above break-even and decline, how far can they fall before the break-even point is reached?'

Which one of the following lines is NOT drawn separately on a CVP graph?

Target net income is the income objective for an individual product line.

Sutton Company produces flash drives for computers, which it sells for $20 each.The variable cost to make each flash drive is $6.During April, 700 drives were sold.Fixed costs for April were $2 per unit for a total of $1,400 for the month.How much is the monthly break-even level of sales in dollars for Sutton Company?

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.At the expected sales level, Proops' net income will be

Which of the following statements is NOT true?

In CVP analysis, the term 'cost' includes only manufacturing costs.