Question 1

Contribution margin (CM) is the amount that remains after all fixed costs are subtracted from sales.

Accepted Answer

A) True 
 B)False

Question 2

The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $31,680.
- The breakeven point in watches per month is

Accepted Answer

A)  1,535 watches. 
B)  2,010 watches. 
C)  1,760 watches. 
D)  2,200 watches. 
A)  1,535 watches. 
B)  2,010 watches. 
C)  1,760 watches. 
D)  2,200 watches.

Question 3

A product line's contribution margin represents its contribution to paying off variable costs and to generating a profit.

Accepted Answer

A) True 
 B)False

Question 4

If direct materials costs are decreased, the breakeven point will decrease.

Accepted Answer

A) True 
 B)False

Question 5

Christian Company's sales revenue for 20xx was $144,000. Christian's product sells for $5.50 and has a 30 percent contribution margin. Christian has fixed costs of $33,000.
- What is Christian Company's breakeven point in sales dollars?

Accepted Answer

A)  $205,714 
B)  $110,000 
C)  $144,000 
D)  $173,000 
A)  $205,714 
B)  $110,000 
C)  $144,000 
D)  $173,000

Question 6

The breakeven formula adjusted for profits may be stated as

Accepted Answer

A)  S = VC - FC + P. 
B)  S = VC - FC - P. 
C)  VC + FC - P = S. 
D)  S = VC + FC + P. 
A)  S = VC - FC + P. 
B)  S = VC - FC - P. 
C)  VC + FC - P = S. 
D)  S = VC + FC + P.

Question 7

Service businesses do not have any overhead costs.

Accepted Answer

A) True 
 B)False

Question 8

Identify the following as fixed costs, variable costs, or mixed costs:
_____________a. Direct materials
_____________b. Electricity
_____________c. Factory building rent
_____________d. Advertising expense
_____________e. Shipping expense
_____________f. Insurance on the factory building
_____________g. Cost of goods sold
_____________h. Direct labor

Accepted Answer

a. Variable
b. Mixed

Question 9

The objective of breakeven analysis is to find the level of activity at which sales revenue equals the sum of all variable and fixed costs.

Accepted Answer

A) True 
 B)False

Question 10

Breakeven sales in dollars can be obtained without knowing the contribution margin per unit.

Accepted Answer

A) True 
 B)False

Question 11

When managers plan, they may use cost behavior to decide how to change the mix of products to meet changing demand.

Accepted Answer

A) True 
 B)False

Question 12

Adding a desired profit level to breakeven computations will lower the number of sales units.

Accepted Answer

A) True 
 B)False

Question 13

Last year, RC Rancho's revenue was $120,000,000, variable costs were $90,000,000 and fixed costs were $15,000,000. RC Rancho's contribution margin ratio was 25 percent.

Accepted Answer

A) True 
 B)False

Question 14

If James, Inc., sells 300 widgets at $50 per widget and has variable costs of $20 per widget and fixed costs of $4,000, what is the projected profit?

Accepted Answer

The answer of If James, Inc., sells 300 widgets at...

Question 15

Which of the following costs is a variable manufacturing cost?

Accepted Answer

A)  Depreciation costs computed using the straight-line method 
B)  Factory rent 
C)  President's salary 
D)  Direct labor costs 
A)  Depreciation costs computed using the straight-line method 
B)  Factory rent 
C)  President's salary 
D)  Direct labor costs

Question 16

In a graph of cost-volume-profit analysis, the

Accepted Answer

A)  total revenue line typically begins at a required minimum level. 
B)  slope of the total cost line is dependent on the variable cost per unit. 
C)  total cost line normally begins at zero. 
D)  sales level at which total cost and total revenue lines intersect is also equal to fixed costs. 
A)  total revenue line typically begins at a required minimum level. 
B)  slope of the total cost line is dependent on the variable cost per unit. 
C)  total cost line normally begins at zero. 
D)  sales level at which total cost and total revenue lines intersect is also equal to fixed costs.

Question 17

Which of the following statements is true regarding fixed and variable costs?

Accepted Answer

A)  Both costs are constant when considered on a total basis. 
B)  Variable costs are constant in total, and fixed costs are constant per unit. 
C)  Both costs are constant when considered on a per unit basis. 
D)  Fixed costs are constant in total, and variable costs are constant per unit. 
A)  Both costs are constant when considered on a total basis. 
B)  Variable costs are constant in total, and fixed costs are constant per unit. 
C)  Both costs are constant when considered on a per unit basis. 
D)  Fixed costs are constant in total, and variable costs are constant per unit.

Question 18

For every unit that a company produces and sells above the breakeven point, its profitability is improved (ignoring taxes) by the unit's

Accepted Answer

A)  gross margin. 
B)  selling price minus fixed cost. 
C)  variable cost. 
D)  contribution margin. 
A)  gross margin. 
B)  selling price minus fixed cost. 
C)  variable cost. 
D)  contribution margin.

Question 19

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

Accepted Answer

A) True 
 B)False

Question 20

Dick Sports, Inc.'s, income statement data for last year is as follows: $\begin{array}{|l|l|}
\hline \text { Salesrevenue } & \$ 200,000 \
\hline \text { Variable costs } & 140,000 \
\hline \text { Fixed costs } & 30,000 \
\hline \text { Operating income } & 18,000 \
\hline &
\end{array}$
 What is Dick's breakeven point in dollars?

Accepted Answer

A)  $100,000 
B)  $18,000 
C)  $142,000 
D)  $48,000 
A)  $100,000 
B)  $18,000 
C)  $142,000 
D)  $48,000

Contribution margin (CM) is the amount that remains after all fixed costs are subtracted from sales.

The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $31,680. - The breakeven point in watches per month is

A product line's contribution margin represents its contribution to paying off variable costs and to generating a profit.

If direct materials costs are decreased, the breakeven point will decrease.

Christian Company's sales revenue for 20xx was $144,000. Christian's product sells for $5.50 and has a 30 percent contribution margin. Christian has fixed costs of $33,000. - What is Christian Company's breakeven point in sales dollars?

The breakeven formula adjusted for profits may be stated as

Service businesses do not have any overhead costs.

Identify the following as fixed costs, variable costs, or mixed costs: _______a. Direct materials _b. Electricity _c. Factory building rent _d. Advertising expense _e. Shipping expense _f. Insurance on the factory building _g. Cost of goods sold _______h. Direct labor

The objective of breakeven analysis is to find the level of activity at which sales revenue equals the sum of all variable and fixed costs.

Breakeven sales in dollars can be obtained without knowing the contribution margin per unit.

When managers plan, they may use cost behavior to decide how to change the mix of products to meet changing demand.

Adding a desired profit level to breakeven computations will lower the number of sales units.

Last year, RC Rancho's revenue was $120,000,000, variable costs were $90,000,000 and fixed costs were $15,000,000. RC Rancho's contribution margin ratio was 25 percent.

If James, Inc., sells 300 widgets at $50 per widget and has variable costs of $20 per widget and fixed costs of $4,000, what is the projected profit?

Which of the following costs is a variable manufacturing cost?

In a graph of cost-volume-profit analysis, the

Which of the following statements is true regarding fixed and variable costs?

For every unit that a company produces and sells above the breakeven point, its profitability is improved (ignoring taxes) by the unit's

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

Dick Sports, Inc.'s, income statement data for last year is as follows: Salesrevenue \ 200,000 Variable costs 140,000 Fixed costs 30,000 Operating income 18,000 What is Dick's breakeven point in dollars?

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters

Exam 5: Cost Behavior Analysis

Contribution margin (CM) is the amount that remains after all fixed costs are subtracted from sales.

The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $31,680. - The breakeven point in watches per month is

A product line's contribution margin represents its contribution to paying off variable costs and to generating a profit.

If direct materials costs are decreased, the breakeven point will decrease.

Christian Company's sales revenue for 20xx was $144,000. Christian's product sells for $5.50 and has a 30 percent contribution margin. Christian has fixed costs of $33,000. - What is Christian Company's breakeven point in sales dollars?

The breakeven formula adjusted for profits may be stated as

Service businesses do not have any overhead costs.

The objective of breakeven analysis is to find the level of activity at which sales revenue equals the sum of all variable and fixed costs.

Breakeven sales in dollars can be obtained without knowing the contribution margin per unit.

When managers plan, they may use cost behavior to decide how to change the mix of products to meet changing demand.

Adding a desired profit level to breakeven computations will lower the number of sales units.

Last year, RC Rancho's revenue was $120,000,000, variable costs were $90,000,000 and fixed costs were $15,000,000. RC Rancho's contribution margin ratio was 25 percent.

If James, Inc., sells 300 widgets at $50 per widget and has variable costs of $20 per widget and fixed costs of $4,000, what is the projected profit?

Which of the following costs is a variable manufacturing cost?

In a graph of cost-volume-profit analysis, the

Which of the following statements is true regarding fixed and variable costs?

For every unit that a company produces and sells above the breakeven point, its profitability is improved (ignoring taxes) by the unit's

All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin.

Dick Sports, Inc.'s, income statement data for last year is as follows: Salesrevenue \ 200,000 Variable costs 140,000 Fixed costs 30,000 Operating income 18,000 What is Dick's breakeven point in dollars?

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters