Exam 21: Cost Behavior and Decisions Using C-V-P Analysis

If the fixed costs relative to a specific product increase while the variable costs and sales price remain constant, the contribution margin will:

Everclean Company cleans draperies. It charges $90 to clean a full-size drape, and its variable and fixed costs are $55 per drape and $10,000 per year, respectively. Given these data, if Everclean's fixed costs increased to $15,000, how many drapes must the firm clean to earn $60,000?

The per-unit contribution margin is equal to:

C-V-P analysis, while useful for several purposes, is primarily useful in:

Company X and Company Y each have a break-even point of 2,000 units. If Company X has higher fixed costs but lower variable costs, what will be the effect of an increase in sales volume, for both companies, to 2,200 units?

Exhibit 21-6 The graph below illustrates various cost behavior patterns in XYZ Company. -Refer to Exhibit 21-6. In the graph above, total fixed costs are represented by:

Exhibit 21-9 Stella Signs sells two different products. Following are the monthly revenues and costs: -Refer to Exhibit 21-9. Assume that Stella has fixed costs of $65,000. Using the current sales mix, what is Stella's break-even point?

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s). -Refer to Exhibit 21-7. Area F on the cost-volume-profit graph represents the:

One method that a multi-product firm can employ to promote a high-contribution margin product is:

The scattergraph method is used to analyze:

Wimmer Company makes swimming suits and wants to analyze its mixed costs. The diagram below shows a scattergraph representing Wimmer's mixed costs for the previous five months. -Refer to Exhibit 21-1. Using the graph above, determine Wimmer's variable cost rate.

As activity level increases within the relevant range, per-unit fixed costs usually will:

Zodiac Company's total costs are increasing in direct proportion to the increases in activity levels. The company's cost structure must have all:

In the scattergraph method fixed costs are:

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s). -Refer to Exhibit 21-7. Area E on the cost-volume-profit graph represents the:

Which of the following is most likely to be a variable cost?

All the following are common cost behavior patterns EXCEPT:

Exhibit 21-5 The following is a partial income statement for Duncan Corporation for 2011: - Refer to Exhibit 21-5. What will be Duncan Corporation's operating income if sales volume increases by 40 percent?

Slaby Motors sells two different products. Following are the monthly revenues and costs: If fixed costs are equal to $40,000, determine the break-even point at the current sales mix and the break-even point if the sales mix changes to 50% for each product. (Assume that total sales revenue and variable cost rate stay the same.)

Using the following information for Palmer Company, analyze the cost behavior between the total costs and units produced for the six-month period. Use the high-low method to identify the variable cost rate and the fixed cost portion of total costs.