Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

Mia Enterprises sells a product for $90 per unit.The variable cost is $40 per unit, while fixed costs are $75,000.Determine the a break-even point in sales units, and b break-even point in sales units if the selling price increased to $100 per unit.

The following is a list of various costs of producing T-shirts.Classify each cost as either a variable, fixed, or mixed cost for units produced and sold. a Ink used for screen printing b Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used c Thread d Electricity costs of $0.038 per kilowatt-hour e Janitorial costs of $4,000 per month f Advertising costs of $12,000 per month g Accounting salaries h Color dyes for producing different colors of T-shirts i Salary of the production supervisor j Straight-line depreciation on sewing machines k Salaries of internal pattern designers l Hourly wages of sewing machine operators m Property taxes on factory, building, and equipment n Cotton and polyester cloth o Maintenance costs with sewing machine company the cost is $2,000 per year plus $0.001 for each machine hour of use.

Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.

A business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of $240,000, a break- even point of $960,000, and operating income of $60,000 for the current year.Calculate the current year's sales.

Match the following terms a-e with their definitions. -Plots only the difference between total sales and total costs

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Total variable costs change as the level of activity changes.

For the current year ending January 31, Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50.For the coming year, a new wage contract will increase the unit variable cost to $55.50.The selling price of $70.00 per unit is expected to remain the same. a Compute the break-even sales units for the current year.Round your answer to the nearest whole number. b Compute the anticipated break-even sales units for the coming year, assuming the new wage contract is signed.

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

As production increases, variable costs per unit

Thompson Company manufactures and sells cookware.Because of current trends, it expects to increase sales by 15% next year.If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year's total amounts for the following costs?

A firm operated at 90% of capacity for the past year, during which fixed costs were $420,000, variable costs were 40% of sales, and sales were $1,000,000.Operating profit was

Gladstorm Enterprises sells a product for $60 per unit.The variable cost is $20 per unit, while fixed costs are $85,000.Determine the a break-even point in sales units, and b break-even point in sales units if the selling price increased to $80 per unit.Round your answer to the nearest whole number.

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20.What is the break-even sale units if fixed costs are reduced by $40,000?

Silver River Company sells Products S and T and has made the following estimates for the coming year: Fixed costs are estimated at $202,400.Determine a the estimated sales in units of the overall product necessary to reach the break-even point for the coming year, b the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year, and c the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year.

Explain how variable costing net income will be different than absorption costing net income under the following situations: 1 A company had no beginning or ending inventory.During the year, it produced and sold 10,000 units. 2 A company had no beginning inventory.During the year, it produced 10,000 units and sold 8,000 units. 3 A company had 2,000 units in beginning inventory.During the year, it produced 10,000 units and sold 12,000 units.

For the past year, Iris Company had fixed costs of $6,708,000, a unit variable cost of $444, and a unit selling price of $600.For the coming year, no changes are expected in revenues and costs, except that a new wage contract will increase variable costs by $6 per unit.Determine the break-even sales units for a the past year and b the coming year.

What was Rusty Co.'s weighted average unit contribution margin?

The contribution margin ratio is the same as the profit-volume ratio.

Zeke Company sells 25,000 units at $21 per unit.Variable costs are $10 per unit, and fixed costs are $75,000.The contribution margin ratio and the unit contribution margin are