Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

Contribution margin is:

If employees accept a wage contract that increases the unit contribution margin, the break-even point will decrease.

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would:

Mia Enterprises sells a product for $90 per unit. The variable cost is $40 per unit, while fixed costs are $75,000. Determine the (a) break-even point in sales units, and (b) break-even point in sales units if the selling price increased to $100 per unit.

Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X's and 35,000 units of Y's. Related data are: What was Rusty Co.'s sales mix last year?

Absorption costing is required for financial reporting under generally accepted accounting principles.

Given the following cost data, what type of cost is shown?

For purposes of analysis, mixed costs can generally be separated into their variable and fixed components.

If fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)?

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

Direct materials and direct labor costs are examples of variable costs of production.

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%.

If fixed costs are $300,000, the unit selling price is $31, and the unit variable costs are $22, what is the break-even sales (units) if fixed costs are reduced by $30,000?

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (unit ) if the variable costs are decreased by $2?

A mixed cost has characteristics of both a variable and a fixed cost.

Unit variable cost does not change as the number of units of activity changes.

Cool-It Company manufactures and sells commercial air conditioners. Because of current trends, it expects to increase sales by 10 percent next year. If this expected level of production and sales occurs and plant expansion is not needed, how should this increase affect next year's total amounts for the following costs. Variable Costs Fixed Costs Mixed Costs

Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example of a fixed cost.

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was:

As production increases, what should happen to the variable costs per unit?