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

A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000. a What is the break-even point in sales dollars? b What is the operating income? c If neither the relationship between variable costs and sales nor the amount of fixed costs is expected to change in the next year, how much additional operating income can be earned by increasing sales by $110,000?

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

If Kaden Company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24.What is the break-even sale units?

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

Given the following costs and activities for Dance Company electrical costs, use the high-low method to calculate Dance's variable electrical costs per machine hour. Costs Machine Hours Aug)$11,700 15,000 Sept.$13,200 17,500 Oct)$11,400 14,500

Which of the following describes the behavior of a variable cost per unit?

Currently, the unit selling price is $50, the variable cost, $34, and the total fixed costs, $108,000.A proposal is being evaluated to increase the selling price to $54. a Compute the current break-even sales units. b Compute the anticipated break-even sales units, assuming that the unit selling price is increased and all costs remain constant.

Assume that Corn Co.sold 8,000 units of Product A and 2,000 units of Product B during the past year.The unit contribution margins for Products A and B are $30 and $60, respectively.Corn has fixed costs of $378,000.The break-even point in units is

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

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

What was Carter Co.'s unit selling price of E, with E representing one overall "enterprise" product?

If fixed costs increased and variable costs per unit decreased, the break-even point would

Jacob Inc.has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20.What are the old and new break-even sales units if the unit selling price increases by $4?

For purposes of analysis, mixed costs are

If fixed costs are $450,000 and the unit contribution margin is $50, the sales necessary to earn an operating income of $50,000 are 10,000 units.

In an absorption costing income statement, the manufacturing margin is the excess of sales over the variable cost of goods sold.

The contribution margin ratio is

Lee Industry sales are $525,000, variable costs are 53% of sales, and operating income is $19,000.What is the contribution margin ratio?

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 14,500 units.

Bluegill Company sells 45,000 units at $18 per unit.Fixed costs are $62,000 and income from operations is $298,000.Determine the a variable cost per unit, b unit contribution margin, and c contribution margin ratio.