Question 1

Contribution margin is the amount remaining after:

Accepted Answer

A) variable expenses have been deducted from sales revenue. 
B) fixed expenses have been deducted from sales revenue. 
C) fixed expenses have been deducted from variable expenses. 
D) cost of goods sold has been deducted from sales revenues. 
A) variable expenses have been deducted from sales revenue. 
B) fixed expenses have been deducted from sales revenue. 
C) fixed expenses have been deducted from variable expenses. 
D) cost of goods sold has been deducted from sales revenues.

Question 2

Blackner Corporation produces and sells a single product. Data concerning that product appear below:   The break-even in monthly unit sales is closest to:

Accepted Answer

A) 3,290 units 
B) 6,991 units 
C) 4,173 units 
D) 2,237 units 
A) 3,290 units 
B) 6,991 units 
C) 4,173 units 
D) 2,237 units

Question 3

Stoppkotte Corporation has provided its contribution format income statement for April.   The degree of operating leverage is closest to:

Accepted Answer

A) 3.46 
B) 0.11 
C) 0.29 
D) 9.40 
A) 3.46 
B) 0.11 
C) 0.29 
D) 9.40

Question 4

A tile manufacturer has supplied the following data:   The company's contribution margin ratio is closest to:

Accepted Answer

A) 29.4% 
B) 4.7% 
C) 63.3% 
D) 36.7% 
A) 29.4% 
B) 4.7% 
C) 63.3% 
D) 36.7%

Question 5

Alpha Corporation reported the following data for its most recent year: sales, $500,000; variable expenses, $300,000; and fixed expenses, $150,000. The company's degree of operating leverage is:

Accepted Answer

A) 10 
B) 2 
C) 4 
D) 2.5 
A) 10 
B) 2 
C) 4 
D) 2.5

Question 6

In the most recent month, Shoemaker Corporation's total contribution margin was $29,600 and its net operating income $3,000.
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 10% increase in sales.

Accepted Answer

a. Degree of operating leverage = Contri

Question 7

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $126,000?

Accepted Answer

A) $76,860 
B) $7,140 
C) $34,860 
D) $84,000 
A) $76,860 
B) $7,140 
C) $34,860 
D) $84,000

Question 8

Buccheri Corporation produces and sells a single product. Data concerning that product appear below:   Required:
Determine the monthly break-even in unit sales. Show your work!

Accepted Answer

@#IMG-DLM& Unit sales to break

Question 9

A manufacturer of tiling grout has supplied the following data:   The company's contribution margin ratio is closest to:

Accepted Answer

A) 67.7% 
B) 74.2% 
C) 32.3% 
D) 25.8% 
A) 67.7% 
B) 74.2% 
C) 32.3% 
D) 25.8%

Question 10

Salley Corporation produces and sells a single product. Data concerning that product appear below:   Fixed expenses are $1,133,000 per month. The company is currently selling 9,000 units per month. Management is considering using a new component that would increase the unit variable cost by $7. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

Accepted Answer

A) decrease of $68,500 
B) decrease of $5,500 
C) increase of $68,500 
D) increase of $5,500 
A) decrease of $68,500 
B) decrease of $5,500 
C) increase of $68,500 
D) increase of $5,500

Question 11

The degree of operating leverage in a company is largest at the break-even point and decreases as sales rise.

Accepted Answer

A) True 
 B)False

Question 12

A company that makes organic fertilizer has supplied the following data:   The company's margin of safety in units is closest to:

Accepted Answer

A) 140,000 units 
B) 202,238 units 
C) 125,714 units 
D) 32,105 units 
A) 140,000 units 
B) 202,238 units 
C) 125,714 units 
D) 32,105 units

Question 13

Havely International Corporation's only product sells for $200.00 per unit and its variable expense is $70.00. The company's monthly fixed expense is $390,000 per month. The unit sales to attain the company's monthly target profit of $10,000 is closest to:

Accepted Answer

A) 5,714 
B) 3,077 
C) 3,597 
D) 2,000 
A) 5,714 
B) 3,077 
C) 3,597 
D) 2,000

Question 14

Bianchini Corporation's contribution margin ratio is 58% and its fixed monthly expenses are $94,000. Assume that the company's sales for May are expected to be $178,000.
Required:
Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change. Show your work!

Accepted Answer

Profit = (CM ratio × Sales) -

Question 15

A manufacturer of premium wire strippers has supplied the following data:   The company's degree of operating leverage is closest to:

Accepted Answer

A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64 
A) 20.09 
B) 7.73 
C) 1.86 
D) 55.64

Question 16

Holdt Inc. produces and sells a single product. The selling price of the product is $230.00 per unit and its variable cost is $66.70 per unit. The fixed expense is $212,290 per month. The break-even in monthly unit sales is closest to:

Accepted Answer

A) 1,300 
B) 3,183 
C) 1,802 
D) 923 
A) 1,300 
B) 3,183 
C) 1,802 
D) 923

Question 17

The selling price of Roscioli Corporation's only product is $210.00 per unit and its variable expense is $75.60 per unit. The company's monthly fixed expense is $537,600.
Required:
Assume the company's monthly target profit is $13,440. Determine the unit sales to attain that target profit. Show your work!

Accepted Answer

@#IMG-DLM& Unit sales to attain target p

Question 18

Florek Inc. produces and sells a single product. The company has provided its contribution format income statement for March.   If the company sells 5,900 units, its net operating income should be closest to:

Accepted Answer

A) $14,000 
B) $10,600 
C) $18,600 
D) $10,972 
A) $14,000 
B) $10,600 
C) $18,600 
D) $10,972

Question 19

A company that makes organic fertilizer has supplied the following data:   The company's unit contribution margin is closest to:

Accepted Answer

A) $4.10 per unit 
B) $3.80 per unit 
C) $4.55 per unit 
D) $7.15 per unit 
A) $4.10 per unit 
B) $3.80 per unit 
C) $4.55 per unit 
D) $7.15 per unit

Question 20

A manufacturer of cedar shingles has supplied the following data:   The company's contribution margin ratio is closest to:

Accepted Answer

A) 66.2% 
B) 73.0% 
C) 27.0% 
D) 33.8% 
A) 66.2% 
B) 73.0% 
C) 27.0% 
D) 33.8%

Contribution margin is the amount remaining after:

Blackner Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly unit sales is closest to:

Stoppkotte Corporation has provided its contribution format income statement for April. The degree of operating leverage is closest to:

A tile manufacturer has supplied the following data: The company's contribution margin ratio is closest to:

Alpha Corporation reported the following data for its most recent year: sales, $500,000; variable expenses, $300,000; and fixed expenses, $150,000. The company's degree of operating leverage is:

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $126,000?

Buccheri Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in unit sales. Show your work!

A manufacturer of tiling grout has supplied the following data: The company's contribution margin ratio is closest to:

The degree of operating leverage in a company is largest at the break-even point and decreases as sales rise.

A company that makes organic fertilizer has supplied the following data: The company's margin of safety in units is closest to:

Havely International Corporation's only product sells for $200.00 per unit and its variable expense is $70.00. The company's monthly fixed expense is $390,000 per month. The unit sales to attain the company's monthly target profit of $10,000 is closest to:

A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Holdt Inc. produces and sells a single product. The selling price of the product is $230.00 per unit and its variable cost is $66.70 per unit. The fixed expense is $212,290 per month. The break-even in monthly unit sales is closest to:

Florek Inc. produces and sells a single product. The company has provided its contribution format income statement for March. If the company sells 5,900 units, its net operating income should be closest to:

A company that makes organic fertilizer has supplied the following data: The company's unit contribution margin is closest to:

A manufacturer of cedar shingles has supplied the following data: The company's contribution margin ratio is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 6: Variable Costing and Segment Reporting: Tools for Management

Contribution margin is the amount remaining after:

Blackner Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly unit sales is closest to:

Stoppkotte Corporation has provided its contribution format income statement for April. The degree of operating leverage is closest to:

A tile manufacturer has supplied the following data: The company's contribution margin ratio is closest to:

Alpha Corporation reported the following data for its most recent year: sales, $500,000; variable expenses, $300,000; and fixed expenses, $150,000. The company's degree of operating leverage is:

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $126,000?

Buccheri Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in unit sales. Show your work!

A manufacturer of tiling grout has supplied the following data: The company's contribution margin ratio is closest to:

The degree of operating leverage in a company is largest at the break-even point and decreases as sales rise.

A company that makes organic fertilizer has supplied the following data: The company's margin of safety in units is closest to:

Havely International Corporation's only product sells for $200.00 per unit and its variable expense is $70.00. The company's monthly fixed expense is $390,000 per month. The unit sales to attain the company's monthly target profit of $10,000 is closest to:

A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Holdt Inc. produces and sells a single product. The selling price of the product is $230.00 per unit and its variable cost is $66.70 per unit. The fixed expense is $212,290 per month. The break-even in monthly unit sales is closest to:

Florek Inc. produces and sells a single product. The company has provided its contribution format income statement for March. If the company sells 5,900 units, its net operating income should be closest to:

A company that makes organic fertilizer has supplied the following data: The company's unit contribution margin is closest to:

A manufacturer of cedar shingles has supplied the following data: The company's contribution margin ratio is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters