Exam 20: Cost Behavior Analysis

Breakeven,simply,is when total costs equal total revenues.

The point at which the total cost line intersects with the total revenue line provides information on the number of units that must be sold to break even.

Christian Company's sales revenue for 20xx was $144,000.Christian's product sells for $5.50 and has a 30 percent contribution margin.Christian has fixed costs of $33,000. What is Christian Company's breakeven point in sales dollars?

Ditex is a manufacturer of digital cameras and is preparing production and sales forecasts for the coming fiscal year.The company needs to determine the point at which the projected sales revenue will equal the total of all fixed and variable costs.Fixed costs are estimated to be $314,390,and variable costs are expected to be maintained at $150 per camera.Each camera will sell for $299.Compute (a)the breakeven point in sales units and (b)the breakeven point in sales dollars.

Repair bills for large machinery may include a flat fee for the visit to the company's premises plus additional labor charges per hour of repair work and various costs of replacement parts needed.What type of cost is the repair?

When using the high-low method,the accountant assumes the fixed portion of mixed costs to be the lowest fixed amount incurred during the period under review.

Edward Cheezer's makes and sells frozen four-cheese pizzas,New York-style.The expected selling price is $10 per pizza.The projected variable cost per pizza is $6.The estimated fixed costs per month are $10,000. If 6,000 pizzas are sold in a given month and fixed costs increase by $5,000,the overall profit is

Indicate whether each of the following costs of productive output is usually variable (V)or fixed (F): a. Machine operator's hourly wages b. City operating license c. Machine helper's wages d. Wiring used in radios e. Indirect materials f. Property insurance g. Gasoline for delivery truck h. Real estate taxes