Smart Inc.expects to produce and sell 4,000 units next month.Data on costs follows: $\begin{array}{ll} \text { Per unit costs: } & \\ \text { Selling price } & \$ 80 \\ \text { Variable manufacturing costs } & \$ 20 \\ \text { Variable selling costs } & \$ 12\\\\ \text { Total costs: }\\ \text { Fixed manufacturing costs } & \$ 32,000 \\ \text { Fixed selling costs } & \$ 16,000 \end{array}$ A. What is the variable cost per unit? B. What is contribution margin per unit? C. What is the variable cost ratio? D. What is the contribution margin ratio?

The answer of Smart Inc.expects to produce and sell 4,000...

$\begin{array}{lr} \text { Direct materials } & \$ 1.50 \\ \text { Direct labour } & 1.20 \\ \text { Variable overhead } & 0.90 \\ \text { Variable marketing expense } & 0.40 \end{array}$ -Refer to the Figure.What is the contribution margin ratio?

A) 36% B) 40% C) 44% D) 50% A) 36% B) 40% C) 44% D) 50%

$\begin{array}{lr} \text { Sales } & \$ 540,000 \\ \text { Variable costs } & \$ 378,000 \\ \text { Fixed costs } & \$ 120,000 \\ \text { Expected production and sales in units } & 40,000 \end{array}$ -Refer to the Figure.What is the break-even point in sales dollars?

A) $112,500 B) $150,000 C) $171,429 D) $400,000 A) $112,500 B) $150,000 C) $171,429 D) $400,000

$\begin{array}{lr} \text { Direct materials } & \$ 1.50 \\ \text { Direct labour } & 1.20 \\ \text { Variable overhead } & 0.90 \\ \text { Variable marketing expense } & 0.40 \end{array}$ -Refer to the Figure.What is the variable cost ratio?

A) 33% B) 40% C) 50% D) 60% A) 33% B) 40% C) 50% D) 60%

McKenzie Company expects to produce and sell 1000 units next month.Data on costs follows: $\begin{array}{lc} \text { Per unit costs: } & \\ \text { Selling price } & \$ 8 \\ \text { Variable manufacturing costs } & \$ 2.75 \\ \text { Variable selling costs } & \$ 0.25\\\\\text { Total costs: }\\\text { Fixed manufacturing costs }&\$1,000\\\text { Fixed selling costs }&\$125 \end{array}$ A. What is the break-even point in units? B. What is the break-even point in sales dollars? C. What is the expected operating income for next month? D. What is the margin of safety in dollars? E. What is the break-even point in units if fixed manufacturing costs increase by $ \$ 500 $ ? F. What is the break-even point in units if variable manufacturing costs decrease by $ \$ 0.75 $ ?

The answer of McKenzie Company expects to produce and sell...

$\begin{array}{lr} \text { Selling price per unit } & \$ 80 \\ \text { Variable cost per unit } & \$ 60 \\ \text { Total fixed costs } & \$ 400,000 \end{array}$ -Refer to the Figure.What is the break-even point in units?

A) 6,667 B) 10,000 C) 13,333 D) 20,000 A) 6,667 B) 10,000 C) 13,333 D) 20,000

Assume the following information: $\begin{array}{lr} \text { Selling price per unit } & \$ 100 \\ \text { Contribution margin ratio } & 50 \% \\ \text { Total fixed costs } & \$ 250,000 \end{array}$ How many units must be sold to generate a before-tax profit of $45,000?

A) 2,500 units B) 3,000 units C) 3,750 units D) 5,900 units A) 2,500 units B) 3,000 units C) 3,750 units D) 5,900 units

Exam 4: Costvolumeprofit Analysis: a Managerial Planning Tool

Smart Inc.expects to produce and sell 4,000 units next month.Data on costs follows: Per unit costs: Selling price \ 80 Variable manufacturing costs \ 20 Variable selling costs \ 12 Total costs: Fixed manufacturing costs \ 32,000 Fixed selling costs \ 16,000 A. What is the variable cost per unit? B. What is contribution margin per unit? C. What is the variable cost ratio? D. What is the contribution margin ratio?

(Essay)

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Question 41

Miss She makes dolls.The price of a doll is $15,and the variable expense is $7 per doll.What is the contribution margin ratio?

(Multiple Choice)

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Question 42

Direct materials \ 1.50 Direct labour 1.20 Variable overhead 0.90 Variable marketing expense 0.40 -Refer to the Figure.What is the contribution margin ratio?

(Multiple Choice)

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Question 43

What formula is used to calculate the degree of operating leverage?

(Multiple Choice)

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Question 44

Refer to the Figure.How many deluxe models are sold at break-even?

(Multiple Choice)

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Question 45

Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to the Figure.What is the break-even point in sales dollars?

(Multiple Choice)

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Question 46

The HandyTool Manufacturing Company produces the following three products: Hammers Screwdrivers Saws Selling price per unit \ 40 \ 16 \ 50 Variable costs per unit 28 12 30 Contribution per unit \ 12 \ 4 \ 20 Fixed costs are $76,000 per year. Of all units sold,50% are hammers,30% are screwdrivers,and 20% are saws. Required: Calculate the following values: A. $\quad$ Break-even point in total units B. $\quad$ Number of hammers that will be sold at break-even C. $\quad$ Total sales in units to obtain a before-tax profit of $\$ 19,000$

(Essay)

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Question 47

What is the break-even point?

(Multiple Choice)

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Question 48

To find the number of units to sell to earn a targeted income,it is quicker to simply adjust the break-even units equation by adding target income to the variable cost.

(True/False)

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Question 49

Direct materials \ 1.50 Direct labour 1.20 Variable overhead 0.90 Variable marketing expense 0.40 -Refer to the Figure.What is the variable cost ratio?

(Multiple Choice)

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Question 50

McKenzie Company expects to produce and sell 1000 units next month.Data on costs follows: Per unit costs: Selling price \ 8 Variable manufacturing costs \ 2.75 Variable selling costs \ 0.25 Total costs: Fixed manufacturing costs \1 ,000 Fixed selling costs \1 25 A. What is the break-even point in units? B. What is the break-even point in sales dollars? C. What is the expected operating income for next month? D. What is the margin of safety in dollars? E. What is the break-even point in units if fixed manufacturing costs increase by $\$ 500$ ? F. What is the break-even point in units if variable manufacturing costs decrease by $\$ 0.75$ ?

(Essay)

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Question 51

Match each item with the correct statement below. -The use of fixed costs to extract higher percentage changes in profits as sales activity changes

(Multiple Choice)

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Question 52

What is the result when actual sales equal break-even sales?

(Multiple Choice)

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Question 53

What is total contribution margin divided by sales revenue?

(Multiple Choice)

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Question 54

What is the formula to calculate operating income?

(Multiple Choice)

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Question 55

Selling price per unit \ 80 Variable cost per unit \ 60 Total fixed costs \ 400,000 -Refer to the Figure.What is the break-even point in units?

(Multiple Choice)

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Question 56

Assume the following information: Selling price per unit \ 100 Contribution margin ratio 50\% Total fixed costs \ 250,000 How many units must be sold to generate a before-tax profit of $45,000?

(Multiple Choice)

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Question 57

Match each item with the correct statement below. -Fixed costs that are directly traceable to a given segment and,consequently,disappear if the segment is eliminated

(Multiple Choice)

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Question 58

Information about the K-9 Salon's two products is as follows: Suppose the sales mix in units is 70% Product X and 30% Product Y.What total monthly sales volume in units is required to break even?

(Multiple Choice)

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Question 59

By what amount can sales decline before losses are incurred?

(Multiple Choice)

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Question 60

Miss She makes dolls.The price of a doll is $15,and the variable expense is $7 per doll.What is the contribution margin ratio?

Direct materials \ 1.50 Direct labour 1.20 Variable overhead 0.90 Variable marketing expense 0.40 -Refer to the Figure.What is the contribution margin ratio?

What formula is used to calculate the degree of operating leverage?

Refer to the Figure.How many deluxe models are sold at break-even?

Sales \ 540,000 Variable costs \ 378,000 Fixed costs \ 120,000 Expected production and sales in units 40,000 -Refer to the Figure.What is the break-even point in sales dollars?

What is the break-even point?

To find the number of units to sell to earn a targeted income,it is quicker to simply adjust the break-even units equation by adding target income to the variable cost.

Direct materials \ 1.50 Direct labour 1.20 Variable overhead 0.90 Variable marketing expense 0.40 -Refer to the Figure.What is the variable cost ratio?

Match each item with the correct statement below. -The use of fixed costs to extract higher percentage changes in profits as sales activity changes

What is the result when actual sales equal break-even sales?

What is total contribution margin divided by sales revenue?

What is the formula to calculate operating income?

Selling price per unit \ 80 Variable cost per unit \ 60 Total fixed costs \ 400,000 -Refer to the Figure.What is the break-even point in units?

Assume the following information: Selling price per unit \ 100 Contribution margin ratio 50\% Total fixed costs \ 250,000 How many units must be sold to generate a before-tax profit of $45,000?

Match each item with the correct statement below. -Fixed costs that are directly traceable to a given segment and,consequently,disappear if the segment is eliminated

Information about the K-9 Salon's two products is as follows: Suppose the sales mix in units is 70% Product X and 30% Product Y.What total monthly sales volume in units is required to break even?

By what amount can sales decline before losses are incurred?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

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