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

Crumbley Inc. produces and sells two products. Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $42,760. Required: a. Determine the overall break-even point for the company in total sales dollars. Show your work! b. If the sales mix shifts toward Product W43J with no change in total sales, what will happen to the break-even point for the company? Explain.

Mason Enterprises has prepared the following budget for the month of July: Assuming that total fixed expenses will be $150,000 and the sales mix remains constant, the break-even point would be closest to:

Assume a company sells a single product. If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then the break-even point in sales dollars is:

The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $25,000. If sales increase by $75,000, the company's net operating income will increase by:

Moccio Enterprises, Inc., produces and sells a single product whose selling price is $120.00 per unit and whose variable expense is $37.20 per unit. The company's monthly fixed expense is $356,040. Assume the company's target profit is $15,000. The dollar sales to attain that target profit is closest to:

Mahaxay Corporation has provided its contribution format income statement for April. 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 9% increase in sales.

A cement manufacturer has supplied the following data: What is the company's unit contribution margin?

Steeler Corporation is planning to sell 100,000 units for $2.00 per unit and will break even at this level of sales. Fixed expenses will be $75,000. What are the company's variable expenses per unit?

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

Cleckley Corporation's operating leverage is 5.9. If the company's sales increase by 19%, its net operating income should increase by about:

Data concerning Marchman Corporation's single product appear below: The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question. The marketing manager believes that a $6,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Minist Corporation sells a single product for $15 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in unit sales was:

Brown Corporation has sales of 2,000 units at $70 per unit. Variable expenses are 40% of the selling price. If total fixed expenses are $44,000, the degree of operating leverage is:

The contribution margin ratio is equal to:

Data concerning Wang Corporation's single product appear below: The break-even in monthly dollar sales is closest to:

Hitchens Inc. produces and sells two products. Data concerning those products for the most recent month appear below: The fixed expenses of the entire company were $24,010. The break-even point for the entire company is closest to:

Frank Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $45,000 per year, and the company must sell 5,000 units to break even. If the company has a target profit of $13,500, sales in units must be:

A manufacturer of premium wire strippers has supplied the following data: The company's margin of safety in units is closest to:

Lore Corporation has provided the following information: Lore's break-even point in dollar sales is:

All other things the same, an increase in total fixed expenses will increase the break-even point.