Exam 19: Cost-Volume-Profit Analysis: Additional Issues

Ramirez Corporation sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $90 and a selling price of $150. Q-Drive Plus has variable costs per unit of $105 and a selling price of $195. Ramirez's fixed costs are $891,000. How many units of Q-Drive would be sold at the break-even point?

The CVP income statement classifies costs

A CVP income statement is frequently prepared for internal use by management. Describe the features of the CVP income statement that make it more useful for management decision-making than the traditional income statement that is prepared for external users.

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 _________________________ provides a measure of a company's earnings volatility and can be used to compare companies.

The margin of safety ratio is

Sales mix is

Use the following information for questions. Roosevelt Corporation has a weighted-average unit contribution margin of $30 for its two products, Standard and Supreme. Expected sales for Roosevelt are 40,000 Standard and 60,000 Supreme. Fixed expenses are $1,800,000. -At the expected sales level, Roosevelt's net income will be

Reducing reliance on human workers and instead investing heavily in computers and online technology will

For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%. What are the total variable expenses?

Net income can be increased or decreased by changing the sales mix.

A company with a higher contribution margin ratio 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 contribution margin?

Qwik Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent 75% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 25% of its sales and provides a 60% contribution margin ratio. The company's fixed costs are $15,000,000 (that is, $75,000 per service outlet). Instructions (a) Calculate the dollar amount of each type of service that the company must provide in order to break even. (b) The company has a desired net income of $45,000 per service outlet. What is the dollar amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?

Operating leverage refers to the extent to which a company's net income reacts to a given change in fixed costs.

Greg's Breads can produce and sell only one of the following two products: The company has oven capacity of 1,500 hours. How much will contribution margin be if it produces only the most profitable product?

For Buffalo Co., at a sales level of 4,000 units, sales is $75,000, variable expenses total $50,000, and fixed expenses are $21,000. What is the contribution margin per unit?

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

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

Seaver Corporation manufactures mountain bikes. It has fixed costs of $4,140,000. Seaver's sales mix and contribution margin per unit is shown as follows: Instructions Compute the number of each type of bike that the company would need to sell in order to break even under this product mix.