Question 1

Determine the missing amounts.

Accepted Answer

A. $300 - $210 = $90
B. $90 ÷

Question 2

Stephanie, Inc. sells its product for $40. The variable costs are $18 per unit. Fixed costs are $16,000. The company is considering the purchase of an automated machine that will result in a $2 reduction in unit variable costs and an increase of $5,000 in fixed costs. Which of the following is true about the break-even point in units?

Accepted Answer

A)  It will remain unchanged. 
B)  It will decrease. 
C)  It will increase. 
D)  It cannot be determined from the information provided. 
A)  It will remain unchanged. 
B)  It will decrease. 
C)  It will increase. 
D)  It cannot be determined from the information provided.

Question 3

At break-even point, a company sells 1,200 widgets. Its selling price is $6 per widget, variable cost is $2 per widget, and its fixed cost is $4 per widget.
Instructions
If it sells 200 additional widgets, determine the company's incremental profit.

Accepted Answer

$6(1,200) - $2(1,200) - X = 0

Question 4

Farmers' Industries has fixed costs of $600,000 and variable costs are 60% of sales. How much will Farmers report as sales when its net income equals $60,000?

Accepted Answer

A)  $1,650,000 
B)  $1,100,000 
C)  $1,560,000 
D)  $396,000 
A)  $1,650,000 
B)  $1,100,000 
C)  $1,560,000 
D)  $396,000

Question 5

If the activity level increases 10%, total variable costs will

Accepted Answer

A)  remain the same. 
B)  increase by more than 10%. 
C)  decrease by less than 10%. 
D)  increase 10%. 
A)  remain the same. 
B)  increase by more than 10%. 
C)  decrease by less than 10%. 
D)  increase 10%.

Question 6

Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level.   
Instructions
Compute the variable and fixed cost elements using the high-low method.

Accepted Answer

@#IMG-DLM& ($1.50 x 10,000) +

Question 7

Marvin Co. had a net loss of $150,000 in 2015 when the selling price per unit was $20, the variable costs per unit were $15, and the fixed costs were $600,000. Management expects per unit data and total fixed costs to be the same in 2016. Management has set a goal of earning net income of $75,000 in 2016.
Instructions
(a) Compute the units sold in 2015.
(b) Compute the number of units that would have to be sold in 2016 to reach management's desired net income level.
(c) Assume that Marvin Co. sells the same number of units in 2016 as it did in 2015. What would the selling price have to be in order to reach the target net income? Use the mathematical equation.

Accepted Answer

The answer of Marvin Co. had a net loss of...

Question 8

The amount by which actual or expected sales exceeds break-even sales is referred to as

Accepted Answer

A)  contribution margin. 
B)  unanticipated profit. 
C)  margin of safety. 
D)  target net income. 
A)  contribution margin. 
B)  unanticipated profit. 
C)  margin of safety. 
D)  target net income.

Question 9

The following monthly data are available for Seasons Company 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?

Accepted Answer

A)  $70,000 
B)  $105,000 
C)  $63,000 
D)  $2,500 
A)  $70,000 
B)  $105,000 
C)  $63,000 
D)  $2,500

Question 10

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $35,000. How much is the selling price per unit?

Accepted Answer

A)  $45.00 
B)  $10.00 
C)  $17.50 
D)  $27.50 
A)  $45.00 
B)  $10.00 
C)  $17.50 
D)  $27.50

Determine the missing amounts.

At break-even point, a company sells 1,200 widgets. Its selling price is $6 per widget, variable cost is $2 per widget, and its fixed cost is $4 per widget. Instructions If it sells 200 additional widgets, determine the company's incremental profit.

Farmers' Industries has fixed costs of $600,000 and variable costs are 60% of sales. How much will Farmers report as sales when its net income equals $60,000?

If the activity level increases 10%, total variable costs will

Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level. Instructions Compute the variable and fixed cost elements using the high-low method.

The amount by which actual or expected sales exceeds break-even sales is referred to as

The following monthly data are available for Seasons Company 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?

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $35,000. How much is the selling price per unit?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

Filters

Exam 18: Cost-Volume-Profit

Determine the missing amounts.

At break-even point, a company sells 1,200 widgets. Its selling price is $6 per widget, variable cost is $2 per widget, and its fixed cost is $4 per widget. Instructions If it sells 200 additional widgets, determine the company's incremental profit.

Farmers' Industries has fixed costs of $600,000 and variable costs are 60% of sales. How much will Farmers report as sales when its net income equals $60,000?

If the activity level increases 10%, total variable costs will

Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level. Instructions Compute the variable and fixed cost elements using the high-low method.

The amount by which actual or expected sales exceeds break-even sales is referred to as

The following monthly data are available for Seasons Company 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?

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $35,000. How much is the selling price per unit?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

Filters