Question 1

Use the following information to answer the next question(s).
  
-If the firm wants to earn $70,000 in before-tax profit, sales revenue must equal

Accepted Answer

A)  $60,500. 
B)  $110,000. 
C)  $200,000. 
D)  $244,444. 
A)  $60,500. 
B)  $110,000. 
C)  $200,000. 
D)  $244,444.

Question 2

If targeted after-tax net income is $27,000 with a 40 percent tax rate, contribution margin per unit is $0.80, and total fixed costs are $148,000, then the number of units that must be sold is

Accepted Answer

A)  218,750. 
B)  241,250. 
C)  160,833. 
D)  167,250. 
A)  218,750. 
B)  241,250. 
C)  160,833. 
D)  167,250.

Question 3

Hampton Company, a producer of computer disks, has the following information:
  
-How many units must be sold to obtain a targeted after-tax income of $6,000?

Accepted Answer

A)  115,000 
B)  42,000 
C)  90,000 
D)  105,000 
A)  115,000 
B)  42,000 
C)  90,000 
D)  105,000

Question 4

The variable cost percentage plus the contribution margin percentage must equal 100 percent.

Accepted Answer

A) True 
 B)False

Question 5

If variable costs are increasing in total,

Accepted Answer

A)  activity is decreasing. 
B)  activity is increasing. 
C)  variable costs per unit are decreasing. 
D)  variable costs per unit are increasing. 
A)  activity is decreasing. 
B)  activity is increasing. 
C)  variable costs per unit are decreasing. 
D)  variable costs per unit are increasing.

Question 6

The following information is for Lyceum, Ltd.:
  
-If management has a targeted net income of $27,000 (ignore income taxes), then sales revenue should be

Accepted Answer

A)  $263,667. 
B)  $474,600. 
C)  $108,964. 
D)  $169,500. 
A)  $263,667. 
B)  $474,600. 
C)  $108,964. 
D)  $169,500.

Question 7

Cost drivers are machines that take the place of labour.

Accepted Answer

A) True 
 B)False

Question 8

Dopler Inc. manufactures a product that sells for $50. The variable costs per unit are:   Budgeted fixed manufacturing overhead is estimated at $500,000 and budgeted fixed selling, general and administrative costs are expected to be $300,000. Variable selling costs are $6 per unit.
a. Determine the break-even point in units.
b. Determine the number of units that must be sold to earn $100,000 in profit before taxes.
c. What dollar amount of sales must be attained in order to earn $300,000 in profit before taxes?
d. If there is a 40 percent tax rate, determine the sales level in dollars that must be attained in order to generate an after-tax profit of $300,000.

Accepted Answer

The answer of Dopler Inc. manufactures a product that sells...

Question 9

In certain situations, gross margin can equal contribution margin.

Accepted Answer

A) True 
 B)False

Question 10

Given a break-even point of 44,000 units and a contribution margin per unit of $4.80, the total number of units that must be sold to reach a net profit of $9,048 is

Accepted Answer

A)  45,885 units. 
B)  44,000 units. 
C)  1,885 units. 
D)  cannot be determined with the above information. 
A)  45,885 units. 
B)  44,000 units. 
C)  1,885 units. 
D)  cannot be determined with the above information.

Question 11

The relative proportions or combinations of quantities of products that comprise total sales is called

Accepted Answer

A)  sales mix. 
B)  gross margin. 
C)  proportional sales. 
D)  product ratio. 
A)  sales mix. 
B)  gross margin. 
C)  proportional sales. 
D)  product ratio.

Question 12

The following information is for Lyceum, Ltd.:
  
-The contribution-margin ratio is

Accepted Answer

A)  64.3 percent. 
B)  55.6 percent. 
C)  35.7 percent. 
D)  44.4 percent. 
A)  64.3 percent. 
B)  55.6 percent. 
C)  35.7 percent. 
D)  44.4 percent.

Question 13

Reese, Inc. produces pliers. Each pair of pliers sells for $8.00. Variable costs per unit total $5.60 of which $2.50 is for direct materials and $2.10 is for direct labour.
-If total fixed costs are $62,000, contribution margin per unit is $5.00, and targeted after-tax net income is $12,000 with a 40 percent tax rate, how many units must be sold to break even?

Accepted Answer

A)  16,400 
B)  14,800 
C)  12,400 
D)  11,440 
A)  16,400 
B)  14,800 
C)  12,400 
D)  11,440

Question 14

As the level of activity increases within the relevant range,

Accepted Answer

A)  total fixed costs remain unchanged. 
B)  fixed costs per unit increases. 
C)  total variable costs remain unchanged. 
D)  variable costs per unit decreases. 
A)  total fixed costs remain unchanged. 
B)  fixed costs per unit increases. 
C)  total variable costs remain unchanged. 
D)  variable costs per unit decreases.

Question 15

If the sales price per unit is $10.00, the unit contribution margin is $4.00, and total fixed costs are $20,000, the break-even point in units is

Accepted Answer

A)  5,000. 
B)  1,429. 
C)  2,000. 
D)  3,333. 
A)  5,000. 
B)  1,429. 
C)  2,000. 
D)  3,333.

Question 16

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...

Use the following information to answer the next question(s). -If the firm wants to earn $70,000 in before-tax profit, sales revenue must equal

If targeted after-tax net income is $27,000 with a 40 percent tax rate, contribution margin per unit is $0.80, and total fixed costs are $148,000, then the number of units that must be sold is

Hampton Company, a producer of computer disks, has the following information: -How many units must be sold to obtain a targeted after-tax income of $6,000?

The variable cost percentage plus the contribution margin percentage must equal 100 percent.

If variable costs are increasing in total,

The following information is for Lyceum, Ltd.: -If management has a targeted net income of $27,000 (ignore income taxes), then sales revenue should be

Cost drivers are machines that take the place of labour.

In certain situations, gross margin can equal contribution margin.

Given a break-even point of 44,000 units and a contribution margin per unit of $4.80, the total number of units that must be sold to reach a net profit of $9,048 is

The relative proportions or combinations of quantities of products that comprise total sales is called

The following information is for Lyceum, Ltd.: -The contribution-margin ratio is

As the level of activity increases within the relevant range,

If the sales price per unit is $10.00, the unit contribution margin is $4.00, and total fixed costs are $20,000, the break-even point in units is

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

Management Accounting and Management Decisions

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters

Exam 2: Cost Behaviour and Cost-Volume Relationships

Use the following information to answer the next question(s). -If the firm wants to earn $70,000 in before-tax profit, sales revenue must equal

If targeted after-tax net income is $27,000 with a 40 percent tax rate, contribution margin per unit is $0.80, and total fixed costs are $148,000, then the number of units that must be sold is

Hampton Company, a producer of computer disks, has the following information: -How many units must be sold to obtain a targeted after-tax income of $6,000?

The variable cost percentage plus the contribution margin percentage must equal 100 percent.

If variable costs are increasing in total,

The following information is for Lyceum, Ltd.: -If management has a targeted net income of $27,000 (ignore income taxes), then sales revenue should be

Cost drivers are machines that take the place of labour.

In certain situations, gross margin can equal contribution margin.

Given a break-even point of 44,000 units and a contribution margin per unit of $4.80, the total number of units that must be sold to reach a net profit of $9,048 is

The relative proportions or combinations of quantities of products that comprise total sales is called

The following information is for Lyceum, Ltd.: -The contribution-margin ratio is

As the level of activity increases within the relevant range,

If the sales price per unit is $10.00, the unit contribution margin is $4.00, and total fixed costs are $20,000, the break-even point in units is

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

Management Accounting and Management Decisions

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters