Question 1

The cost graphs in the illustration below shows various types of cost behaviors.

Accepted Answer

@#IMG-DLM& For each of the following cos

Question 2

Knowing how costs behave is useful to management for all the following reasons except for

Accepted Answer

A)  predicting customer demand. 
B)  predicting profits as sales and production volumes change. 
C)  estimating costs. 
D)  changing an existing product production. 
A)  predicting customer demand. 
B)  predicting profits as sales and production volumes change. 
C)  estimating costs. 
D)  changing an existing product production.

Question 3

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

Accepted Answer

A) True 
 B)False

Question 4

A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit was:

Accepted Answer

A)  $90,000 
B)  $210,000 
C)  $590,000 
D)  $490,000 
A)  $90,000 
B)  $210,000 
C)  $590,000 
D)  $490,000

Question 5

For the past year, Pedi Company had fixed costs of $70,000, unit variable costs of $32, and a unit selling price of $40. For the coming year, no changes are expected in revenues and costs, except that property taxes are expected to increase by $10,000. Determine the break-even sales (units) for (a) the past year and (b) the coming year.

Accepted Answer

The answer of For the past year, Pedi Company had...

Question 6

Louis Company sells a single product at a price of $65 per unit. Variable costs per unit are $45 and total fixed costs are $625,500. Louis is considering the purchase of a new piece of equipment that would increase the fixed costs to $800,000, but decrease the variable costs per unit to $42.
Required:
If Louis Company expects to sell 44,000 units next year, should they purchase this new equipment?

Accepted Answer

Under the current system, Louis' profit

Question 7

The Atlantic Company sells a product with a break-even point of 3,000 sales units. The variable cost is $60 per unit, and fixed costs are $270,000. Determine the (a) unit sales price, and (b) break-even points in sales units if the company desires a target profit of $36,000.

Accepted Answer

a. 3,000 units = $27

Question 8

Which of the following conditions would cause the break-even point to decrease?

Accepted Answer

A)  Total fixed costs increase 
B)  Unit selling price decreases 
C)  Unit variable cost decreases 
D)  Unit variable cost increases 
A)  Total fixed costs increase 
B)  Unit selling price decreases 
C)  Unit variable cost decreases 
D)  Unit variable cost increases

Question 9

Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

Accepted Answer

A)  $56,000 
B)  $28,400 
C)  $17,600 
D)  cannot be determined from the data given 
A)  $56,000 
B)  $28,400 
C)  $17,600 
D)  cannot be determined from the data given

Question 10

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Accepted Answer

A)  25,000 
B)  29,000 
C)  4,000 
D)  21,000 
A)  25,000 
B)  29,000 
C)  4,000 
D)  21,000

Question 11

Blane Company has the following data:
   What will operating income be if units sold double to 100,000 units?

Accepted Answer

The answer of Blane Company has the following data:
 ...

Question 12

If sales are $400,000, variable costs are 75% of sales, and operating income is $50,000, what is the operating leverage?

Accepted Answer

A)  2.5 
B)  7.5 
C)  2.0 
D)  0 
A)  2.5 
B)  7.5 
C)  2.0 
D)  0

Question 13

In cost-volume-profit analysis, all costs are classified into the following two categories:

Accepted Answer

A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs 
A)  mixed costs and variable costs 
B)  sunk costs and fixed costs 
C)  discretionary costs and sunk costs 
D)  variable costs and fixed costs

Question 14

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

A)  Total fixed costs increase 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Total fixed costs decrease 
A)  Total fixed costs increase 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Total fixed costs decrease

Question 15

The manufacturing cost of Carrie Industries for the first three months of the year are provided below:

Accepted Answer

Using the high-low method, det

Question 16

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

A)  Total fixed costs decrease 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Unit variable cost increases 
A)  Total fixed costs decrease 
B)  Unit selling price increases 
C)  Unit variable cost decreases 
D)  Unit variable cost increases

Question 17

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are:   What was Carter Co.'s weighted average unit selling price?

Accepted Answer

A)  $200 
B)  $100 
C)  $ 80 
D)  $ 88 
A)  $200 
B)  $100 
C)  $ 80 
D)  $ 88

Question 18

If sales are $500,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage?

Accepted Answer

A)  0 
B)  1.25 
C)  1.3 
D)  3.1 
A)  0 
B)  1.25 
C)  1.3 
D)  3.1

Question 19

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Accepted Answer

A) True 
 B)False

Question 20

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Accepted Answer

A) True 
 B)False

The cost graphs in the illustration below shows various types of cost behaviors.

Knowing how costs behave is useful to management for all the following reasons except for

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit was:

The Atlantic Company sells a product with a break-even point of 3,000 sales units. The variable cost is $60 per unit, and fixed costs are $270,000. Determine the (a) unit sales price, and (b) break-even points in sales units if the company desires a target profit of $36,000.

Which of the following conditions would cause the break-even point to decrease?

Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

If sales are $400,000, variable costs are 75% of sales, and operating income is $50,000, what is the operating leverage?

In cost-volume-profit analysis, all costs are classified into the following two categories:

Which of the following conditions would cause the break-even point to increase?

The manufacturing cost of Carrie Industries for the first three months of the year are provided below:

Which of the following conditions would cause the break-even point to increase?

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s weighted average unit selling price?

If sales are $500,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage?

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Filters

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

The cost graphs in the illustration below shows various types of cost behaviors.

Knowing how costs behave is useful to management for all the following reasons except for

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit was:

The Atlantic Company sells a product with a break-even point of 3,000 sales units. The variable cost is $60 per unit, and fixed costs are $270,000. Determine the (a) unit sales price, and (b) break-even points in sales units if the company desires a target profit of $36,000.

Which of the following conditions would cause the break-even point to decrease?

Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Blane Company has the following data: What will operating income be if units sold double to 100,000 units?

If sales are $400,000, variable costs are 75% of sales, and operating income is $50,000, what is the operating leverage?

In cost-volume-profit analysis, all costs are classified into the following two categories:

Which of the following conditions would cause the break-even point to increase?

The manufacturing cost of Carrie Industries for the first three months of the year are provided below:

Which of the following conditions would cause the break-even point to increase?

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: What was Carter Co.'s weighted average unit selling price?

If sales are $500,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage?

Cost behavior refers to the manner in which a cost changes as the related activity changes.

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Job Order Costing

Process Cost Systems

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Filters