Question 1

A planned increase in advertising would be considered an increase in variable costs in CVP analysis.

Accepted Answer

A) True 
 B)False

Question 2

If selling price per unit is $55,variable costs per unit are $25,total fixed costs are $24,000,the tax rate is 35%,and the company sells 7,000 units,net income is ________.

Accepted Answer

A) $186,000 
B) $75,250 
C) $136,500 
D) $120,900 
A) $186,000 
B) $75,250 
C) $136,500 
D) $120,900

Question 3

The difference between total revenues and total variable costs is called profit margin.

Accepted Answer

A) True 
 B)False

Question 4

MyArt sells framed art prints for $100.The unit variable cost per phone is $50 plus a selling commission of 10%.Fixed manufacturing costs total $1,250 per month,while fixed selling and administrative costs total $2,500.
Required:
a.What is the contribution margin per print?
b.What is the breakeven point in prints?
c.How many prints must be sold to earn pretax income of $7,500?

Accepted Answer

a.CM per print = $100 - $50 -

Question 5

Sky High sells helicopters.During the current year,130 helicopters were sold resulting in $840,000 of sales revenue,$260,000 of variable costs,and $350,000 of fixed costs.The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

Accepted Answer

A) 151 units 
B) 104 units 
C) 79 units 
D) 130 units 
A) 151 units 
B) 104 units 
C) 79 units 
D) 130 units

Question 6

What is sales mix? How do companies choose their sales mix?

Accepted Answer

Sales mix is the quantities or proportio

Question 7

The planned operating income is calculated by ________.

Accepted Answer

A) dividing net income by tax rate 
B) dividing net income by 1 − tax rate 
C) multiplying net income by tax rate 
D) multiplying net income by 1 − tax rate 
A) dividing net income by tax rate 
B) dividing net income by 1 − tax rate 
C) multiplying net income by tax rate 
D) multiplying net income by 1 − tax rate

Question 8

Explain sensitivity analysis and how do managers use sensitivity analysis to evaluate its implications?

Accepted Answer

Sensitivity analysis is a "what-if" tech

Question 9

Tally Corp.sells softwares during the recruiting seasons.During the current year,14,000 software packages were sold resulting in $460,000 of sales revenue,$110,000 of variable costs,and $50,000 of fixed costs.
Contribution margin per software is ________.

Accepted Answer

A) $32.86 
B) $25.00 
C) $29.29 
D) $7.86 
A) $32.86 
B) $25.00 
C) $29.29 
D) $7.86

Question 10

Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000.Next year,sales are projected to be $3,100,000.An advertising campaign is being evaluated that costs an additional $120,000.How much would sales have to increase to justify the additional expenditure?

Accepted Answer

A) $280,000 
B) $930,000 
C) $400,000 
D) $550,000 
A) $280,000 
B) $930,000 
C) $400,000 
D) $550,000

Question 11

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $700,and fixed costs are $100,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000,assuming the tax rate is 40%?

Accepted Answer

A) 267 dresses 
B) 240 dresses 
C) 200 dresses 
D) 400 dresses 
A) 267 dresses 
B) 240 dresses 
C) 200 dresses 
D) 400 dresses

Question 12

Ken's Beer Emporium sells beer and ale in both pint and quart sizes.If Ken's sells twice as many pints as it sells quarts,and sells 2,400 items total,it will sell 800 quarts of ale.

Accepted Answer

A) True 
 B)False

Question 13

Furniture,Inc. ,sells lamps for $30.The unit variable cost per lamp is $22.Fixed costs total $9,600.
Required:
a.What is the contribution margin per lamp?
b.What is the breakeven point in lamps?
c.How many lamps must be sold to earn a pretax income of $8,000?
d.What is the margin of safety,assuming 1,500 lamps are sold?

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00 b.N = Bre

Question 14

Katrina's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $400,and fixed costs are $110,000.What is Katrina's operating income when 200 dresses are sold?

Accepted Answer

A) $50,000 
B) $240,000 
C) $80,000 
D) $130,000 
A) $50,000 
B) $240,000 
C) $80,000 
D) $130,000

Question 15

Contribution margin = Contribution margin percentage × Revenues (in dollars).

Accepted Answer

A) True 
 B)False

Question 16

Answer the following questions using the information below:
The following information is for Alex Corp:
 $\begin{array}{cc}
\text { Product X: Revenue } & \$ 15.00 \
\text { Variable Cost } & \$ 2.50
\end{array}$    
-If the sales mix shifts to one unit of Product X and two units of Product Y,then the breakeven point will ________.

Accepted Answer

A) increase 
B) stay the same 
C) decrease 
D) will be greater than the original breakeven point 
A) increase 
B) stay the same 
C) decrease 
D) will be greater than the original breakeven point

Question 17

The following information is for Alex Corp:

What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

Accepted Answer

A) 842.5 units of Y and 1,685 units of X 
B) 3,000 units of Y and 1,500 units of X 
C) 1 units of Y and 10,000 units of X 
D) 1,500 units of Y and 3,000 units of X 
A) 842.5 units of Y and 1,685 units of X 
B) 3,000 units of Y and 1,500 units of X 
C) 1 units of Y and 10,000 units of X 
D) 1,500 units of Y and 3,000 units of X

Question 18

Operating income plus total fixed costs equals the contribution margin.

Accepted Answer

A) True 
 B)False

Question 19

In 2017,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2018,the company expects annual property taxes to decrease by $15,000.
Required:
a.Calculate operating income and the breakeven point for 2017.
b.Calculate the breakeven point for 2018.

Accepted Answer

a.In 2017,operating income is $1,000,000

Question 20

Tony Manufacturing produces a single product that sells for $80.Variable costs per unit equal $50.The company expects total fixed costs to be $82,000 for the next month at the projected sales level of 2,800 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately.Suppose that management believes that a 14% reduction in the selling price will result in a 14% increase in sales.If this proposed reduction in selling price is implemented ________.

Accepted Answer

A) operating income will decrease by $23,990 
B) operating income will increase by $7,370 
C) operating income will decrease by $31,360 
D) operating income will increase by $23,990 
A) operating income will decrease by $23,990 
B) operating income will increase by $7,370 
C) operating income will decrease by $31,360 
D) operating income will increase by $23,990

A planned increase in advertising would be considered an increase in variable costs in CVP analysis.

If selling price per unit is $55,variable costs per unit are $25,total fixed costs are $24,000,the tax rate is 35%,and the company sells 7,000 units,net income is ________.

The difference between total revenues and total variable costs is called profit margin.

Sky High sells helicopters.During the current year,130 helicopters were sold resulting in $840,000 of sales revenue,$260,000 of variable costs,and $350,000 of fixed costs.The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

What is sales mix? How do companies choose their sales mix?

The planned operating income is calculated by ________.

Explain sensitivity analysis and how do managers use sensitivity analysis to evaluate its implications?

Tally Corp.sells softwares during the recruiting seasons.During the current year,14,000 software packages were sold resulting in $460,000 of sales revenue,$110,000 of variable costs,and $50,000 of fixed costs. Contribution margin per software is ________.

Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000.Next year,sales are projected to be $3,100,000.An advertising campaign is being evaluated that costs an additional $120,000.How much would sales have to increase to justify the additional expenditure?

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $700,and fixed costs are $100,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000,assuming the tax rate is 40%?

Ken's Beer Emporium sells beer and ale in both pint and quart sizes.If Ken's sells twice as many pints as it sells quarts,and sells 2,400 items total,it will sell 800 quarts of ale.

Katrina's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $400,and fixed costs are $110,000.What is Katrina's operating income when 200 dresses are sold?

Contribution margin = Contribution margin percentage × Revenues (in dollars).

The following information is for Alex Corp: What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

Operating income plus total fixed costs equals the contribution margin.

In 2017,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2018,the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2017. b.Calculate the breakeven point for 2018.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 3: Cost-Volume-Profit Analysis

A planned increase in advertising would be considered an increase in variable costs in CVP analysis.

If selling price per unit is $55,variable costs per unit are $25,total fixed costs are $24,000,the tax rate is 35%,and the company sells 7,000 units,net income is ________.

The difference between total revenues and total variable costs is called profit margin.

Sky High sells helicopters.During the current year,130 helicopters were sold resulting in $840,000 of sales revenue,$260,000 of variable costs,and $350,000 of fixed costs.The number of helicopters that must be sold to achieve $320,000 of operating income is ________.

What is sales mix? How do companies choose their sales mix?

The planned operating income is calculated by ________.

Explain sensitivity analysis and how do managers use sensitivity analysis to evaluate its implications?

Tally Corp.sells softwares during the recruiting seasons.During the current year,14,000 software packages were sold resulting in $460,000 of sales revenue,$110,000 of variable costs,and $50,000 of fixed costs. Contribution margin per software is ________.

Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000.Next year,sales are projected to be $3,100,000.An advertising campaign is being evaluated that costs an additional $120,000.How much would sales have to increase to justify the additional expenditure?

Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $700,and fixed costs are $100,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000,assuming the tax rate is 40%?

Ken's Beer Emporium sells beer and ale in both pint and quart sizes.If Ken's sells twice as many pints as it sells quarts,and sells 2,400 items total,it will sell 800 quarts of ale.

Katrina's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,200,variable costs are $400,and fixed costs are $110,000.What is Katrina's operating income when 200 dresses are sold?

Contribution margin = Contribution margin percentage × Revenues (in dollars).

Answer the following questions using the information below: The following information is for Alex Corp: Product X: Revenue \ 15.00 Variable Cost \ 2.50 -If the sales mix shifts to one unit of Product X and two units of Product Y,then the breakeven point will ________.

The following information is for Alex Corp: What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

Operating income plus total fixed costs equals the contribution margin.

In 2017,Craylon Company has sales of $1,000,000,variable costs of $250,000,and fixed costs of $200,000.In 2018,the company expects annual property taxes to decrease by $15,000. Required: a.Calculate operating income and the breakeven point for 2017. b.Calculate the breakeven point for 2018.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters