Exam 2: Introduction to Cost Behavior and Cost Volume Profit Relationships

Assume fixed costs are constant and contribution margin per unit is reduced by 50 percent.What will happen to the break-even point in units?

The relevant range applies to ________.

Helium Company has the following information available: Selling price per unit \ 5.00 Variable cost per unit \ 3.50 Total fixed costs \9 0,000.00 Targeted net income \3 0,000.00 How many units must be sold to achieve the targeted net income?

Which action will decrease a company's break-even point?

Assume the following information for Janice Company: Selling price per unit \ 100 Variable costs per unit \8 0 Total fixed costs \ 80,000 If fixed costs increased by 10% and management wanted to maintain the original break-even point,then the selling price per unit would have to be increased to ________.

On a cost-volume-profit graph,the vertical distance between the Revenue line and the Total Cost line represents ________ or ________.

A brainstorming group in the Research and Development area is charged with developing new product ideas for the company.What is a good cost driver of the cost of this activity?

Xerox Company has the following information available: Selling price per unit \1 00 Variable cost per unit \4 5 Fixed costs per year \4 20,000 Expected sales per year (units) 20,000 If variable costs increase to $65 per unit,what is the break-even point in units?

To construct the Total Cost line on a cost-volume-profit graph,plot ________ and then plot ________.

Nearly all companies sell more than one product,and thus,they must be concerned with sales mix.

Murphy Company produces dolls.Each doll sells for $20.00.Variable costs per unit are $14.00 and total fixed costs for the period are $435,000.What is the break-even point in units?

Johnson Company produces dolls.Each doll sells for $20.00.Variable costs per unit are $14.00 and total fixed costs for the period are $300,000.What is the break-even volume in dollars?

The break-even point is located at the intersection of the total revenue line and the total costs line on a cost-volume-profit graph.

Suppose Shady Lane Hotel has annual fixed costs applicable to its rooms of $1.0 million for its 300-room hotel.Average daily room rents are $60 per room and average variable costs are $10 for each room rented.It operates 365 days per year.What percent of occupancy is needed to breakeven?

The following information is available for Kinsner Corporation: Total fixed costs \3 13,500 Variable costs per unit \ 99 Selling price per unit \ 154 If management has a targeted net income of $46,200,then the number of units that must be sold is ________.

The county government released $100,000 as an appropriation for a counseling program for at-risk teenagers.The program should run one year and the variable costs for the program are $400 per teenager per year.Within the relevant range of 50 to 150 teenagers,the fixed costs for the program are $60,000.How many teenagers can the program serve?

Consider the following activity: The manufacturer in a commercial airplane.What is an appropriate cost driver for the cost of the seats?

John Company has the following information: Income taxrate 40\% Selling price per unit \ 7.50 Variable cost per unit \ 2.50 Total fixed costs \ 100,000 Target after-tax net income \ 42,000 Assume the tax rate decreases to 30%.How many fewer units can be sold to retain the same after-tax net income of $42,000?

Suppose a hotel has annual fixed costs applicable to its rooms of $2.0 million for its 300-room hotel.Average daily room rents are $50 per room and average variable costs are $10 for each room rented.It operates 365 days per year.If the hotel is completely full throughout the year,what is net income for one year?

Seidner Company has the following information available: Total fixed costs \ 80,000 Targeted after-taxnet income \ 18,000 Contribution margin per unit \ 2.00 Taxrate 40\% How many units must be sold to achieve the targeted after-tax net income?