Question 1

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

Accepted Answer

A) 16,000 units 
B) 8,000 units 
C) 6,000 units 
D) 4,000 units 
A) 16,000 units 
B) 8,000 units 
C) 6,000 units 
D) 4,000 units

Question 2

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 constant in total, and variable costs are constant per unit. 
D) Variable costs are constant 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 constant in total, and variable costs are constant per unit. 
D) Variable costs are constant in total, and fixed costs vary in total.

Question 3

Most operating decisions of management focus on a narrow range of activity called the

Accepted Answer

A) relevant range of production 
B) strategic level of production 
C) optimal level of production 
D) tactical operating level of production 
A) relevant range of production 
B) strategic level of production 
C) optimal level of production 
D) tactical operating level of production

Question 4

Direct materials and direct labor costs are examples of variable costs of production.

Accepted Answer

A) True 
 B)False

Question 5

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s break­even point in units?

Accepted Answer

A) 16,875 units 
B) 30,100 units 
C) 30,000 units 
D) 11,250 units 
A) 16,875 units 
B) 30,100 units 
C) 30,000 units 
D) 11,250 units

Question 6

Companies with large amounts of fixed costs will generally have a high operating leverage.

Accepted Answer

A) True 
 B)False

Question 7

Which of the graphs in Figure 21-1 illustrates the behavior of a total variable cost?

Accepted Answer

A) Graph 2 
B) Graph 3 
C) Graph 4 
D) Graph 1 
A) Graph 2 
B) Graph 3 
C) Graph 4 
D) Graph 1

Question 8

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

Accepted Answer

A) True 
 B)False

Question 9

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Accepted Answer

A) True 
 B)False

Question 10

Given the following:
Variable cost as a percentage of sales = 60% Unit variable cost = $30
Fixed costs = $200,000
What is the break-even point in units?

Accepted Answer

$30/60% = $50 selling price
If

Question 11

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

Accepted Answer

A) True 
 B)False

Question 12

If direct materials cost per unit increases, the break-even point will decrease.

Accepted Answer

A) True 
 B)False

Question 13

With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume, and can immediately see the effects of each change on the break-even point and profit.This is called

Accepted Answer

A) "what if" or sensitivity analysis 
B) vary the data analysis 
C) computer aided analysis 
D) data gathering 
A) "what if" or sensitivity analysis 
B) vary the data analysis 
C) computer aided analysis 
D) data gathering

Question 14

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units?

Accepted Answer

A) 12,800 units 
B) 4,571 units 
C) 16,000 units 
D) 7,111 units 
A) 12,800 units 
B) 4,571 units 
C) 16,000 units 
D) 7,111 units

Question 15

Total fixed costs change as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 16

Penny Company sells 25,000 units at $59 per unit.Variable costs are $29 per unit, and loss from operations is $50,000.Determine the a unit contribution margin b contribution margin ratio, and c fixed costs per unit at production of 25,000 units.

Accepted Answer

a.$59 - $29 = $30 pe

Question 17

The Tom Company reports the following data:
   Determine Tom Company's operating leverage.

Accepted Answer

$600,000 - $400,000/

Question 18

Costs that remain constant in total dollar amount as the level of activity changes are called

Accepted Answer

A) fixed costs 
B) mixed costs 
C) product costs 
D) variable costs 
A) fixed costs 
B) mixed costs 
C) product costs 
D) variable costs

Question 19

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

Accepted Answer

A) 66,000 
B) 70,125 
C) 74,800 
D) 60,000 
A) 66,000 
B) 70,125 
C) 74,800 
D) 60,000

Question 20

What would Timmer's net income be for the year using absorption costing?

Accepted Answer

A) $114,000 
B) $110,000 
C) $ 4,000 
D) $106,000 
A) $114,000 
B) $110,000 
C) $ 4,000 
D) $106,000

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

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

Most operating decisions of management focus on a narrow range of activity called the

Direct materials and direct labor costs are examples of variable costs of production.

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s breakeven point in units?

Companies with large amounts of fixed costs will generally have a high operating leverage.

Which of the graphs in Figure 21-1 illustrates the behavior of a total variable cost?

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Given the following: Variable cost as a percentage of sales = 60% Unit variable cost = $30 Fixed costs = $200,000 What is the break-even point in units?

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

If direct materials cost per unit increases, the break-even point will decrease.

With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume, and can immediately see the effects of each change on the break-even point and profit.This is called

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units?

Total fixed costs change as the level of activity changes.

Penny Company sells 25,000 units at $59 per unit.Variable costs are $29 per unit, and loss from operations is $50,000.Determine the a unit contribution margin b contribution margin ratio, and c fixed costs per unit at production of 25,000 units.

The Tom Company reports the following data: Determine Tom Company's operating leverage.

Costs that remain constant in total dollar amount as the level of activity changes are called

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

What would Timmer's net income be for the year using absorption costing?

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters

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

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

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

Most operating decisions of management focus on a narrow range of activity called the

Direct materials and direct labor costs are examples of variable costs of production.

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s break­even point in units?

Companies with large amounts of fixed costs will generally have a high operating leverage.

Which of the graphs in Figure 21-1 illustrates the behavior of a total variable cost?

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Given the following: Variable cost as a percentage of sales = 60% Unit variable cost = $30 Fixed costs = $200,000 What is the break-even point in units?

Cost behavior refers to the methods used to estimate costs for use in managerial decision making.

If direct materials cost per unit increases, the break-even point will decrease.

With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume, and can immediately see the effects of each change on the break-even point and profit.This is called

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units?

Total fixed costs change as the level of activity changes.

Penny Company sells 25,000 units at $59 per unit.Variable costs are $29 per unit, and loss from operations is $50,000.Determine the a unit contribution margin b contribution margin ratio, and c fixed costs per unit at production of 25,000 units.

The Tom Company reports the following data: Determine Tom Company's operating leverage.

Costs that remain constant in total dollar amount as the level of activity changes are called

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

What would Timmer's net income be for the year using absorption costing?

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters

Assuming that last year's fixed costs totaled $675,000.What was Rusty Co.'s breakeven point in units?