Question 1

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $30,000 are 14,000 units.

Accepted Answer

A) True 
 B)False

Question 2

Cost behavior refers to the manner in which a cost changes as a related activity changes.

Accepted Answer

A) True 
 B)False

Question 3

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would:

Accepted Answer

A) decrease. 
B) increase. 
C) remain the same. 
D) increase or decrease,depending upon the percentage increase in utility rates. 
A) decrease. 
B) increase. 
C) remain the same. 
D) increase or decrease,depending upon the percentage increase in utility rates.

Question 4

What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000,65% of sales are variable costs,and operating income of $24,000?

Accepted Answer

A) 56% 
B) 35% 
C) 20% 
D) 25% 
A) 56% 
B) 35% 
C) 20% 
D) 25%

Question 5

Currently,fixed costs are $810,000,the unit selling price is $60,and the unit variable cost is $48.What would be the break-even sales (in units),if the variable cost is increased by $2?

Accepted Answer

A) 16,200 units 
B) 57,875 units 
C) 81,000 units 
D) 67,500 units 
A) 16,200 units 
B) 57,875 units 
C) 81,000 units 
D) 67,500 units

Question 6

Break-even analysis is a type of cost-volume-profit analysis.

Accepted Answer

A) True 
 B)False

Question 7

The relative distribution of sales among the various products sold by a business is termed as:

Accepted Answer

A) business's basket of goods. 
B) contribution margin mix. 
C) sales mix. 
D) product portfolio. 
A) business's basket of goods. 
B) contribution margin mix. 
C) sales mix. 
D) product portfolio.

Question 8

Which of the following statements is true regarding fixed and variable costs?

Accepted Answer

A) Both costs are constant when considered on a per-unit basis. 
B) Both costs are constant when considered on a total basis. 
C) Fixed costs are fixed in total,and variable costs are fixed per unit. 
D) Variable costs are fixed in total,and fixed costs vary in total. 
A) Both costs are constant when considered on a per-unit basis. 
B) Both costs are constant when considered on a total basis. 
C) Fixed costs are fixed in total,and variable costs are fixed per unit. 
D) Variable costs are fixed in total,and fixed costs vary in total.

Question 9

If a business had a capacity of $10,000,000 of sales,actual sales were $6,000,000,break-even sales was $4,500,000,fixed costs amounted to $1,800,000,and variable costs amounted to 60% of sales,what is the margin of safety expressed as a percentage of sales?

Accepted Answer

A) 25% 
B) 18% 
C) 33.3% 
D) 15% 
A) 25% 
B) 18% 
C) 33.3% 
D) 15%

Question 10

Which of the following costs is an example of fixed cost?

Accepted Answer

A) Hourly wages of machine operators 
B) Plant manager salary 
C) Direct materials 
D) Direct labor 
A) Hourly wages of machine operators 
B) Plant manager salary 
C) Direct materials 
D) Direct labor

Question 11

If fixed costs are $550,000 and the unit contribution margin is $15,what amount of units must be sold in order to realize an operating income of $125,000?

Accepted Answer

A) 45,000 units 
B) 10,417 units 
C) 45,833 units 
D) 28,333 units 
A) 45,000 units 
B) 10,417 units 
C) 45,833 units 
D) 28,333 units

Question 12

If fixed costs are $250,000,the unit selling price is $105,and the unit variable cost is $65,what is the break-even sales (in units)?

Accepted Answer

A) 6,250 units 
B) 2,381 units 
C) 10,000 units 
D) 3,846 units 
A) 6,250 units 
B) 2,381 units 
C) 10,000 units 
D) 3,846 units

Question 13

If direct materials cost per unit decreases,the break-even point will increase.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the information provided for Kennedy Co.Assuming that last year's fixed costs totaled $910,000,what was Kennedy's break-even point in units?

Accepted Answer

A) 9,100 units 
B) 13,000 units 
C) 13,227 units 
D) 13,542 units 
A) 9,100 units 
B) 13,000 units 
C) 13,227 units 
D) 13,542 units

Question 15

The graph of the variable costs when plotted against the activity level appears as a line parallel to horizontal axis.

Accepted Answer

A) True 
 B)False

Question 16

Given the following costs and activity observations for Pike Company's utilities,use the high­low method to calculate Pike's variable utilities costs per machine hour.

Accepted Answer

A) $0.55 
B) $0.60 
C) $0.52 
D) $0.40 
A) $0.55 
B) $0.60 
C) $0.52 
D) $0.40

Question 17

If fixed costs are $350,000,the unit selling price is $80,and the unit variable cost is $30,what is the break-even sales (in units)?

Accepted Answer

A) 3,200 units 
B) 7,000 units 
C) 11,667 units 
D) 4,375 units 
A) 3,200 units 
B) 7,000 units 
C) 11,667 units 
D) 4,375 units

Question 18

Variable cost per unit remains the same regardless of activity level.

Accepted Answer

A) True 
 B)False

Question 19

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95.
(a)	Compute the anticipated break-even sales (in units).
(b)	Compute the sales (in units) required to realize an operating profit of $8,000

Accepted Answer

a)Break­even sales (units)= $7

Question 20

If a business had sales of $4,000,000 and a margin of safety of 25%,what was the break-even point?

Accepted Answer

A) $5,000,000 
B) $3,000,000 
C) $12,000,000 
D) $1,000,000 
A) $5,000,000 
B) $3,000,000 
C) $12,000,000 
D) $1,000,000

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $30,000 are 14,000 units.

Cost behavior refers to the manner in which a cost changes as a related activity changes.

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would:

What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000,65% of sales are variable costs,and operating income of $24,000?

Currently,fixed costs are $810,000,the unit selling price is $60,and the unit variable cost is $48.What would be the break-even sales (in units),if the variable cost is increased by $2?

Break-even analysis is a type of cost-volume-profit analysis.

The relative distribution of sales among the various products sold by a business is termed as:

Which of the following statements is true regarding fixed and variable costs?

If a business had a capacity of $10,000,000 of sales,actual sales were $6,000,000,break-even sales was $4,500,000,fixed costs amounted to $1,800,000,and variable costs amounted to 60% of sales,what is the margin of safety expressed as a percentage of sales?

Which of the following costs is an example of fixed cost?

If fixed costs are $550,000 and the unit contribution margin is $15,what amount of units must be sold in order to realize an operating income of $125,000?

If fixed costs are $250,000,the unit selling price is $105,and the unit variable cost is $65,what is the break-even sales (in units)?

If direct materials cost per unit decreases,the break-even point will increase.

Refer to the information provided for Kennedy Co.Assuming that last year's fixed costs totaled $910,000,what was Kennedy's break-even point in units?

The graph of the variable costs when plotted against the activity level appears as a line parallel to horizontal axis.

Given the following costs and activity observations for Pike Company's utilities,use the highlow method to calculate Pike's variable utilities costs per machine hour.

If fixed costs are $350,000,the unit selling price is $80,and the unit variable cost is $30,what is the break-even sales (in units)?

Variable cost per unit remains the same regardless of activity level.

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95. (a) Compute the anticipated break-even sales (in units). (b) Compute the sales (in units) required to realize an operating profit of $8,000

If a business had sales of $4,000,000 and a margin of safety of 25%,what was the break-even point?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 11: Cost Behavior and Cost-Volume-Profit Analysis

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $30,000 are 14,000 units.

Cost behavior refers to the manner in which a cost changes as a related activity changes.

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would:

What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000,65% of sales are variable costs,and operating income of $24,000?

Currently,fixed costs are $810,000,the unit selling price is $60,and the unit variable cost is $48.What would be the break-even sales (in units),if the variable cost is increased by $2?

Break-even analysis is a type of cost-volume-profit analysis.

The relative distribution of sales among the various products sold by a business is termed as:

Which of the following statements is true regarding fixed and variable costs?

If a business had a capacity of $10,000,000 of sales,actual sales were $6,000,000,break-even sales was $4,500,000,fixed costs amounted to $1,800,000,and variable costs amounted to 60% of sales,what is the margin of safety expressed as a percentage of sales?

Which of the following costs is an example of fixed cost?

If fixed costs are $550,000 and the unit contribution margin is $15,what amount of units must be sold in order to realize an operating income of $125,000?

If fixed costs are $250,000,the unit selling price is $105,and the unit variable cost is $65,what is the break-even sales (in units)?

If direct materials cost per unit decreases,the break-even point will increase.

Refer to the information provided for Kennedy Co.Assuming that last year's fixed costs totaled $910,000,what was Kennedy's break-even point in units?

The graph of the variable costs when plotted against the activity level appears as a line parallel to horizontal axis.

Given the following costs and activity observations for Pike Company's utilities,use the high­low method to calculate Pike's variable utilities costs per machine hour.

If fixed costs are $350,000,the unit selling price is $80,and the unit variable cost is $30,what is the break-even sales (in units)?

Variable cost per unit remains the same regardless of activity level.

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95. (a) Compute the anticipated break-even sales (in units). (b) Compute the sales (in units) required to realize an operating profit of $8,000

If a business had sales of $4,000,000 and a margin of safety of 25%,what was the break-even point?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Given the following costs and activity observations for Pike Company's utilities,use the highlow method to calculate Pike's variable utilities costs per machine hour.