Exam 6: Cost-Volume-Profit Analysis: Additional Issues

For Wilder Corporation, sales is $1,600,000 (8,000 units), fixed expenses are $480,000, and the contribution margin per unit is $80. What is the margin of safety in dollars?

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

In 2019, 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 2020. 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 2020?

Fixed selling expenses are period costs

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 2018-2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020. -Income under variable costing for 2019 is

Woolford's CVP income statement included sales of 5,000 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25,000. Fixed expenses are

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%. -What will be the total contribution margin at the break-even point?

The use of absorption costing facilitates cost-volume-profit analysis.

Use the following information for questions Sprinkle Co. sells its product for $60 per unit. During 2019, 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. -Under absorption costing, what amount of fixed overhead is deferred to a future period?

Which cost is charged to the product under variable costing?

In a sales mix situation, at any level of units sold, net income will be higher if

The break-even point in dollars is variable costs divided by the weighted-average contribution margin ratio.

Which cost is not charged to the product under variable costing?

Sales mix is

Hinge Manufacturing's cost of goods sold is $420,000 variable and $240,000 fixed. The company's selling and administrative expenses are $300,000 variable and $360,000 fixed. If the company's sales is $1,580,000, what is its net income?

What is the key factor in determining sales mix if a company has limited resources?

Net income under variable costing is contribution margin less

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 2018-2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020. -Income under variable costing for 2020 is

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. Contribution margin is

According to the theory of constraints, a company must identify its constraints and find ways to reduce or eliminate them.