Question 1

An assumption of the CVP analysis is that changes in efficiency or productivity are expected.

Accepted Answer

A) True 
 B)False

Question 2

Fixed costs:

Accepted Answer

A)  vary on a per- unit basis, but are fixed in total 
B)  are fixed on a per- unit basis, and fixed in total 
C)  vary on a per- unit basis, and vary in total 
D)  are fixed on a per- unit basis, but vary in total 
A)  vary on a per- unit basis, but are fixed in total 
B)  are fixed on a per- unit basis, and fixed in total 
C)  vary on a per- unit basis, and vary in total 
D)  are fixed on a per- unit basis, but vary in total

Question 3

Gross profit margin is the sales price minus the variable cost per unit.

Accepted Answer

A) True 
 B)False

Question 4

Like- U Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break- even volume in dollars is:

Accepted Answer

A)  $1,450,000 
B)  $1,023,529 
C)  $435,000 
D)  $621,429 
A)  $1,450,000 
B)  $1,023,529 
C)  $435,000 
D)  $621,429

Question 5

On Fire Company, a producer of salsa, has the following information: $$\begin{array} { l l } 
\text { Income tax rate } & 30 \% \
\text { Selling pric e per unit } & \$ 5.00 \
\text { Variable cost p er unit } & \$ 3.00 \
\text { Total fixed costs } & \$ 90,000.00
\end{array}$$ The contribution margin per unit is:

Accepted Answer

A)  $3.00 
B)  $8.00 
C)  $2.00 
D)  $5.00 
A)  $3.00 
B)  $8.00 
C)  $2.00 
D)  $5.00

Question 6

The break- even point is when enough units are sold that total contribution margin equals total variable costs.

Accepted Answer

A) True 
 B)False

Question 7

The Yetmar Family Restaurant is open 24 hours per day serving breakfast, lunch, and dinner. Fixed costs are
$24,000 per month. Variable costs are estimated at $9.60 per meal. The average total bill (excluding tax and tip) is $12 per customer.
Required:
a. Compute the number of meals that must be served if the Family Restaurant wishes to earn a profit before taxes of $6,000.
b. Compute the break- even point in meals.
c. Compute the break- even volume in dollars.
d. Assume that fixed costs increase to $30,000. How many additional meals must be served if the Yetmar Family Restaurant
wishes to earn the same before- tax profit?

Accepted Answer

a. ($24,000 + $6,000) / ($12.0

Question 8

The break- even point may be reduced by increasing the per unit variable cost.

Accepted Answer

A) True 
 B)False

Question 9

Due to limited resources, sales of every type of product cannot be maximized.

Accepted Answer

A) True 
 B)False

Question 10

Another name for gross profit

Accepted Answer

The answer of Another name for gross profit...

Question 11

Desks R' Us Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: $\begin{array}{ll}
\text { Direct materials } & \$ 195 \
\text { Direct labor } & 126 \
\text { Variable factory overhead } & 51
\end{array}$ Total fixed costs for the period are $456,840. The break- even point in desks is:

Accepted Answer

A)  952 desks 
B)  4,230 desks 
C)  5,458 desks 
D)  1,228 desks 
A)  952 desks 
B)  4,230 desks 
C)  5,458 desks 
D)  1,228 desks

Question 12

Margin of safety = actual unit sales - planned unit sales.

Accepted Answer

A) True 
 B)False

Question 13

Income before income taxes = net income / marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 14

The cost of the merchandise that a company acquires or produces and then sells

Accepted Answer

The answer of The cost of the merchandise that a...

Question 15

The CVP graph uses the assumption that costs are linear over the relevant range.

Accepted Answer

A) True 
 B)False

Question 16

Which value chain function would include the cost of computer- aided design equipment and cost to develop the prototype of a product?

Accepted Answer

A)  The distribution function would include these costs. 
B)  The production function would include these costs. 
C)  The marketing function would include these costs. 
D)  The design of product, services, and processes function would include these costs. 
A)  The distribution function would include these costs. 
B)  The production function would include these costs. 
C)  The marketing function would include these costs. 
D)  The design of product, services, and processes function would include these costs.

Question 17

A cost that is not immediately affected by changes in the cost driver

Accepted Answer

The answer of A cost that is not immediately affected...

Question 18

Manufacturers of industrial equipment have high contribution- margin percentages.

Accepted Answer

A) True 
 B)False

Question 19

If targeted sales volume in units is 62,300, total fixed costs are $31,200, and contribution margin per unit is $1.20, then the targeted net income is:

Accepted Answer

A)  $43,560 
B)  $74,760 
C)  $31,200 
D)  $37,440 
A)  $43,560 
B)  $74,760 
C)  $31,200 
D)  $37,440

Question 20

Contribution margin = sales price - all variable expenses.

Accepted Answer

A) True 
 B)False

An assumption of the CVP analysis is that changes in efficiency or productivity are expected.

Fixed costs:

Gross profit margin is the sales price minus the variable cost per unit.

Like- U Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break- even volume in dollars is:

On Fire Company, a producer of salsa, has the following information: Income tax rate 30\% Selling pric e per unit \ 5.00 Variable cost p er unit \ 3.00 Total fixed costs \ 90,000.00 The contribution margin per unit is:

The break- even point is when enough units are sold that total contribution margin equals total variable costs.

The break- even point may be reduced by increasing the per unit variable cost.

Due to limited resources, sales of every type of product cannot be maximized.

Another name for gross profit

Desks R' Us Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials \ 195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break- even point in desks is:

Margin of safety = actual unit sales - planned unit sales.

Income before income taxes = net income / marginal tax rate.

The cost of the merchandise that a company acquires or produces and then sells

The CVP graph uses the assumption that costs are linear over the relevant range.

Which value chain function would include the cost of computer- aided design equipment and cost to develop the prototype of a product?

A cost that is not immediately affected by changes in the cost driver

Manufacturers of industrial equipment have high contribution- margin percentages.

If targeted sales volume in units is 62,300, total fixed costs are $31,200, and contribution margin per unit is $1.20, then the targeted net income is:

Contribution margin = sales price - all variable expenses.

Managerial Accounting and the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 2: Introduction to Cost Behavior and Cost Volume Relationships

An assumption of the CVP analysis is that changes in efficiency or productivity are expected.

Fixed costs:

Gross profit margin is the sales price minus the variable cost per unit.

Like- U Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break- even volume in dollars is:

On Fire Company, a producer of salsa, has the following information: Income tax rate 30\% Selling pric e per unit \ 5.00 Variable cost p er unit \ 3.00 Total fixed costs \ 90,000.00 The contribution margin per unit is:

The break- even point is when enough units are sold that total contribution margin equals total variable costs.

The break- even point may be reduced by increasing the per unit variable cost.

Due to limited resources, sales of every type of product cannot be maximized.

Another name for gross profit

Desks R' Us Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials \ 195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break- even point in desks is:

Margin of safety = actual unit sales - planned unit sales.

Income before income taxes = net income / marginal tax rate.

The cost of the merchandise that a company acquires or produces and then sells

The CVP graph uses the assumption that costs are linear over the relevant range.

Which value chain function would include the cost of computer- aided design equipment and cost to develop the prototype of a product?

A cost that is not immediately affected by changes in the cost driver

Manufacturers of industrial equipment have high contribution- margin percentages.

If targeted sales volume in units is 62,300, total fixed costs are $31,200, and contribution margin per unit is $1.20, then the targeted net income is:

Contribution margin = sales price - all variable expenses.

Managerial Accounting and the Business Organization

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters