Exam 3: Cost-Volume-Profit Analysis

Stones Manufacturing sells a marble slab for $1,100.Fixed costs are $33,000,while the variable costs are $550 per slab.The company currently plans to sell 210 slabs this month.What is the margin of safety assuming 85 slabs are actually sold? (Round interim calculations and final calculations to the nearest whole number. )

Craylon Manufacturing Company produces two products,X and Y.The following information is presented for both products: Total fixed costs are $275,000. Required: a.Calculate the contribution margin for each product. b.Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X for every unit of Y. c.Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3 units of Y.

Family Furniture sells a table for $900.Its fixed costs are $30,000,while its variable costs are $600 per table.It currently plans to sell 175 tables this month. What is the budgeted revenue for the month assuming that Family Furniture sells 175 tables?

The Marietta Company has fixed costs of $75,000 and variable costs are 75% of the selling price.To realize operating income of $10,000 from sales of 80,000 units,the selling price per unit ________.(Round the answer to the nearest cent. )

Companies with a greater proportion of direct costs have a greater risk of loss than companies with a greater proportion of indirect costs.

Managers use cost-volume-profit (CVP)analysis to ________.

In most multiproduct situations when sales mix shifts toward the product with the highest contribution margin,operating income will be higher.

Which of the following is true about the assumptions underlying basic CVP analysis?

Service companies and not-for-profit organizations ________.

Gross margin is ________.

Family Furniture sells a table for $950.Its fixed costs are $2,500,while its variable costs are $500 per table.It currently plans to sell 180 tables this month. What is the budgeted operating income for the month assuming that Family Furniture sells 180 tables?

Karen Hefner,a florist,operates retail stores in several shopping malls.The average selling price of an arrangement is $30 and the average cost of each sale is $18.A new mall is opening where Karen wants to locate a store,but the location manager is not sure about the rent method to accept.The mall operator offers the following three options for its retail store rentals: Required: a.For each option,compute the breakeven sales and the monthly rent paid at break-even. b.Beginning at zero sales,show the sales levels at which each option is preferable up to 5,000 units.

Contribution margin percentage equals the unit contribution margin divided by the selling price.

Sensitivity analysis is ________.

The risk-return tradeoff across alternative cost structures can be measured as operating leverage.

When fixed costs are $70,000 and variable costs are 60% of the selling price,then breakeven sales are ________.(Round the final answer to the nearest dollar. )

Bell Company sells several products.Information of average revenue and costs is as follows: The company sells 10,000 units. The contribution margin per unit is ________.

Lights Manufacturing produces a single product that sells for $130.Variable costs per unit equal $55.The company expects total fixed costs to be $100,000 for the next month at the projected sales level of 1,300 units.What is the current breakeven point in terms of number of units?

Explain what net income and what taxes can have on a manager's decision?

________ is the process of varying key estimates to identify those estimates that are the most critical to a decision.