Question 1

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed

Accepted Answer

A) contribution margin analysis 
B) cost-volume-profit analysis 
C) budgetary analysis 
D) gross profit analysis 
A) contribution margin analysis 
B) cost-volume-profit analysis 
C) budgetary analysis 
D) gross profit analysis

Question 2

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Accepted Answer

A) True 
 B)False

Question 3

Douglas Company has a contribution margin ratio of 30%.If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?

Accepted Answer

$336,420/0

Question 4

Manley Co.manufactures office furniture.During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625.In its slowest month, the company made 1,800 desks at a cost of $49,500.Using the high-low method of cost estimation, total fixed costs are

Accepted Answer

A) $61,875 
B) $33,875 
C) $24,750 
D) cannot be determined from the data given 
A) $61,875 
B) $33,875 
C) $24,750 
D) cannot be determined from the data given

Question 5

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

Accepted Answer

A) True 
 B)False

Question 6

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

Accepted Answer

A) unaffected 
B) expected to increase by 3% 
C) expected to increase by 48% 
D) expected to increase by 4 % 
A) unaffected 
B) expected to increase by 3% 
C) expected to increase by 48% 
D) expected to increase by 4 %

Question 7

Given the following cost and activity observations for Bounty Company's utilities, use the high­low method to calculate Bounty' variable utilities costs per machine hour.Round your answer to the nearest cent.

Accepted Answer

A) $10.00 
B) $0.67 
C) $0.63 
D) $0.11 
A) $10.00 
B) $0.67 
C) $0.63 
D) $0.11

Question 8

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 9

Match the following terms a-e with their definitions.
-Graphically shows costs, sales, and operating profit or loss at various levels of units sold

Accepted Answer

A) Profit-volume chart 
B) Cost-volume-profit chart 
C) Sales mix 
D) Operating leverage 
E) Margin of safety 
A) Profit-volume chart 
B) Cost-volume-profit chart 
C) Sales mix 
D) Operating leverage 
E) Margin of safety

Question 10

What would Timmer's net income be for the year using variable 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

Question 11

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 11,500 units.

Accepted Answer

A) True 
 B)False

Question 12

The Klein Company reports the following data:
   Determine Klein Company's operating leverage.Round your answer to two decimal places.

Accepted Answer

$980,000 - $500,000/

Question 13

The range of activity over which changes in cost are of interest to management is called the relevant range.

Accepted Answer

A) True 
 B)False

Question 14

Variable costs as a percentage of sales for Lemon Inc.are 80%, current sales are $600,000, and fixed costs are $130,000.How much will operating income change if sales increase by $40,000?

Accepted Answer

A) $8,000 increase 
B) $8,000 decrease 
C) $30,000 decrease 
D) $30,000 increase 
A) $8,000 increase 
B) $8,000 decrease 
C) $30,000 decrease 
D) $30,000 increase

Question 15

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

Accepted Answer

A) True 
 B)False

Question 16

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit, and fixed costs are $270,000.
Determine the a unit sales price, and b break-even points in sales units if the company desires a target profit of $36,000.

Accepted Answer

a.$270,000/$X - $60

Question 17

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

Accepted Answer

A) True 
 B)False

Question 18

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

Accepted Answer

A) no difference 
B) $2,000 greater 
C) $4,000 less 
D) $6,000 less 
A) no difference 
B) $2,000 greater 
C) $4,000 less 
D) $6,000 less

Question 19

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

Accepted Answer

A) margin of safety ratio 
B) contribution margin ratio 
C) costs and expenses ratio 
D) profit ratio 
A) margin of safety ratio 
B) contribution margin ratio 
C) costs and expenses ratio 
D) profit ratio

Question 20

When units manufactured exceed units sold:

Accepted Answer

A) variable costing income equals absorption costing income 
B) variable costing income is less than absorption costing income 
C) variable costing income is greater than absorption costing income 
D) variable costing income is greater by the number of units produced multiplied by the variable cost ratio. 
A) variable costing income equals absorption costing income 
B) variable costing income is less than absorption costing income 
C) variable costing income is greater than absorption costing income 
D) variable costing income is greater by the number of units produced multiplied by the variable cost ratio.

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Douglas Company has a contribution margin ratio of 30%.If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?

Manley Co.manufactures office furniture.During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625.In its slowest month, the company made 1,800 desks at a cost of $49,500.Using the high-low method of cost estimation, total fixed costs are

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

Given the following cost and activity observations for Bounty Company's utilities, use the highlow method to calculate Bounty' variable utilities costs per machine hour.Round your answer to the nearest cent.

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

Match the following terms a-e with their definitions. -Graphically shows costs, sales, and operating profit or loss at various levels of units sold

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

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 11,500 units.

The Klein Company reports the following data: Determine Klein Company's operating leverage.Round your answer to two decimal places.

The range of activity over which changes in cost are of interest to management is called the relevant range.

Variable costs as a percentage of sales for Lemon Inc.are 80%, current sales are $600,000, and fixed costs are $130,000.How much will operating income change if sales increase by $40,000?

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit, and fixed costs are $270,000. Determine the a unit sales price, and b break-even points in sales units if the company desires a target profit of $36,000.

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

When units manufactured exceed units sold:

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

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 25%.

Douglas Company has a contribution margin ratio of 30%.If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?

Manley Co.manufactures office furniture.During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625.In its slowest month, the company made 1,800 desks at a cost of $49,500.Using the high-low method of cost estimation, total fixed costs are

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is

Given the following cost and activity observations for Bounty Company's utilities, use the high­low method to calculate Bounty' variable utilities costs per machine hour.Round your answer to the nearest cent.

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

Match the following terms a-e with their definitions. -Graphically shows costs, sales, and operating profit or loss at various levels of units sold

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

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 11,500 units.

The Klein Company reports the following data: Determine Klein Company's operating leverage.Round your answer to two decimal places.

The range of activity over which changes in cost are of interest to management is called the relevant range.

Variable costs as a percentage of sales for Lemon Inc.are 80%, current sales are $600,000, and fixed costs are $130,000.How much will operating income change if sales increase by $40,000?

The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.

The Atlantic Company sells a product with a break-even point of 3,000 sales units.The variable cost is $60 per unit, and fixed costs are $270,000. Determine the a unit sales price, and b break-even points in sales units if the company desires a target profit of $36,000.

The reliability of cost-volume-profit analysis does not depend on the assumption that costs can be accurately divided into fixed and variable components.

What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

When units manufactured exceed units sold:

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

Given the following cost and activity observations for Bounty Company's utilities, use the highlow method to calculate Bounty' variable utilities costs per machine hour.Round your answer to the nearest cent.