Question 1

Costs that contain both fixed and variable components are:

Accepted Answer

A)  Fixed costs 
B)  Variable costs 
C)  Mixed costs 
D)  All of these are correct 
A)  Fixed costs 
B)  Variable costs 
C)  Mixed costs 
D)  All of these are correct

Question 2

What are the total costs for a company with per-unit variable costs of $12 and total fixed costs of $51,000 if it sells 8,000 units of product?

Accepted Answer

A)  $51,000 
B)  $147,000 
C)  $96,000 
D)  $125,000 
A)  $51,000 
B)  $147,000 
C)  $96,000 
D)  $125,000

Question 3

An increase in sales price would:

Accepted Answer

A)  Increase the contribution margin per unit 
B)  Decrease the contribution margin per unit 
C)  Increase the variable cost per unit 
D)  Decrease the fixed cost per unit 
A)  Increase the contribution margin per unit 
B)  Decrease the contribution margin per unit 
C)  Increase the variable cost per unit 
D)  Decrease the fixed cost per unit

Question 4

Which of the following types of firms would typically have the lowest level of operating leverage?

Accepted Answer

A)  Tile setter 
B)  Automobile manufacturer 
C)  E-commerce merchant 
D)  Fast food restaurant chain 
A)  Tile setter 
B)  Automobile manufacturer 
C)  E-commerce merchant 
D)  Fast food restaurant chain

Question 5

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s).
 
-Refer to Exhibit 21-7. On the cost-volume-profit graph, the area between point G, the origin of the graph, and the point at which Line B crosses the sales axis represents the:

Accepted Answer

A)  Profit area 
B)  Total costs 
C)  Loss area 
D)  Fixed costs 
A)  Profit area 
B)  Total costs 
C)  Loss area 
D)  Fixed costs

Question 6

Johnston Co. sells three products with the following sales and variable cost rates:   Assume that Johnston's total fixed costs are $9,000. Using the current sales mix, what is Johnston's break-even point?

Accepted Answer

A)  $15,000 
B)  $16,364 
C)  $20,000 
D)  $30,000 
A)  $15,000 
B)  $16,364 
C)  $20,000 
D)  $30,000

Question 7

Exhibit 21-3 The following partial income statement is available for Lauria Company:
 
-Refer to Exhibit 21-3. Given the data above, at an activity level of 5,000 units, net income would increase by:

Accepted Answer

A)  $10,000 
B)  $15,000 
C)  $22,500 
D)  $37,500 
A)  $10,000 
B)  $15,000 
C)  $22,500 
D)  $37,500

Question 8

Collins Co. earned a profit of $2,000 in January. The company has estimated that sales will increase by $13,500 in February. Assume that fixed costs for January were $3,000 (and are not expected to change) and the variable cost ratio is 40%. What is the expected profit for the next month?

Accepted Answer

A)  $8,100 
B)  $10,100 
C)  $13,500 
D)  Not enough information available 
A)  $8,100 
B)  $10,100 
C)  $13,500 
D)  Not enough information available

Question 9

Assume that StoneWorks has total fixed costs of $31,540 for the period. Each unit sells for $20. The variable cost per unit is $12.40. How many units must be sold to break even?

Accepted Answer

A)  1,577 
B)  2,544 
C)  4,150 
D)  4,200 
A)  1,577 
B)  2,544 
C)  4,150 
D)  4,200

Question 10

Contribution margin will provide a profit if:

Accepted Answer

A)  All variable costs are covered 
B)  Sales revenues increase 
C)  Fixed costs are covered 
D)  The contribution margin ratio is high enough 
A)  All variable costs are covered 
B)  Sales revenues increase 
C)  Fixed costs are covered 
D)  The contribution margin ratio is high enough

Question 11

During the past year, United Memories sold 150,000 units. Each of these units was sold at a price of $75. At the end of the year, the accounting department identified the costs per unit to be: $20 in materials, $15 for selling costs, and $8 for general expenses. Fixed costs for the year were $1,250,000. The president of United Memories wants to know what the contribution margin and net income were for the year.

Accepted Answer

The answer of During the past year, United Memories sold...

Question 12

The equation for computing the break-even point is:

Accepted Answer

A)  Revenues - (Fixed costs - Variable costs) = Profit 
B)  Variable costs = Revenues - Fixed costs 
C)  Revenues = Variable costs - Fixed costs 
D)  Revenues - Variable costs - Fixed costs = $0 
A)  Revenues - (Fixed costs - Variable costs) = Profit 
B)  Variable costs = Revenues - Fixed costs 
C)  Revenues = Variable costs - Fixed costs 
D)  Revenues - Variable costs - Fixed costs = $0

Costs that contain both fixed and variable components are:

What are the total costs for a company with per-unit variable costs of $12 and total fixed costs of $51,000 if it sells 8,000 units of product?

An increase in sales price would:

Which of the following types of firms would typically have the lowest level of operating leverage?

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s). -Refer to Exhibit 21-7. On the cost-volume-profit graph, the area between point G, the origin of the graph, and the point at which Line B crosses the sales axis represents the:

Johnston Co. sells three products with the following sales and variable cost rates: Assume that Johnston's total fixed costs are $9,000. Using the current sales mix, what is Johnston's break-even point?

Exhibit 21-3 The following partial income statement is available for Lauria Company: -Refer to Exhibit 21-3. Given the data above, at an activity level of 5,000 units, net income would increase by:

Collins Co. earned a profit of $2,000 in January. The company has estimated that sales will increase by $13,500 in February. Assume that fixed costs for January were $3,000 (and are not expected to change) and the variable cost ratio is 40%. What is the expected profit for the next month?

Assume that StoneWorks has total fixed costs of $31,540 for the period. Each unit sells for $20. The variable cost per unit is $12.40. How many units must be sold to break even?

Contribution margin will provide a profit if:

The equation for computing the break-even point is:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters

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

Costs that contain both fixed and variable components are:

What are the total costs for a company with per-unit variable costs of $12 and total fixed costs of $51,000 if it sells 8,000 units of product?

An increase in sales price would:

Which of the following types of firms would typically have the lowest level of operating leverage?

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s). -Refer to Exhibit 21-7. On the cost-volume-profit graph, the area between point G, the origin of the graph, and the point at which Line B crosses the sales axis represents the:

Johnston Co. sells three products with the following sales and variable cost rates: Assume that Johnston's total fixed costs are $9,000. Using the current sales mix, what is Johnston's break-even point?

Exhibit 21-3 The following partial income statement is available for Lauria Company: -Refer to Exhibit 21-3. Given the data above, at an activity level of 5,000 units, net income would increase by:

Collins Co. earned a profit of $2,000 in January. The company has estimated that sales will increase by $13,500 in February. Assume that fixed costs for January were $3,000 (and are not expected to change) and the variable cost ratio is 40%. What is the expected profit for the next month?

Assume that StoneWorks has total fixed costs of $31,540 for the period. Each unit sells for $20. The variable cost per unit is $12.40. How many units must be sold to break even?

Contribution margin will provide a profit if:

The equation for computing the break-even point is:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters