FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 22: Cost-Volume-Profit Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Dunkin Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the contribution margin ratio.

A) 37.5%.
B) 62.5%.
C) 55.0%.
D) 50.0%.
E) 47.5%.

F) A) and E)
G) None of the above

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Dunkin Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the current margin of safety in dollars for Dunkin Company.

A) $3,210,000.
B) $2,640,000.
C) $1,560,000.
D) $2,440,000.
E) $3,500,000.

F) D) and E)
G) B) and E)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

A product sells for $30 per unit and has variable costs of $18 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit and fixed costs increase to $900,000, and the selling price does not change, break-even point in units would:

Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is (round to the nearest thousand) :

A statistical method for deriving an estimated line of cost behavior is the:

A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000.The contribution margin per unit is:

A line on a scatter diagram that is intended to reflect the past relation between cost and volume is the:

The sales mix of Palm Company is 5 units of A, 3 units of B, and 1 unit of C. Per unit sales prices for each product are $30, $40, and $50, respectively. Variable costs per unit are $14, $24, and $34, respectively. Fixed costs are $597,600. What is the break-even point in composite units and in units of A, B, and C?

Least-squares regression is a statistical method for deriving an estimated line of cost behavior.

The method most likely to produce the most precise line of cost behavior is the scatter diagram.

Curvilinear costs always increase:

Narrows Co. is considering the production and sale of a new product line with the following sales and cost data: unit sales price $125; unit variable costs $75; and total fixed costs of $140,000. Calculate the break-even point: (a) In units. (b) In dollar sales.

The difference between the unit sales price and the unit variable cost of an item is defined as the ________________________.

A company has a goal of earning $100,000 in after-tax income. The company must pay $28,000 in income tax if it achieves the goal. The contribution margin ratio is 30%. What dollar amount of sales must be achieved to reach the goal if fixed costs are $64,000?

Three important assumptions in cost-volume-profit analysis is that (1) _______________ per unit is constant, (2) _____________ per unit is constant, and (3) ______________ are constant in total.

A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?

A company has total fixed costs of $360,000. Its product sells for $40 per unit and variable costs amount to $25 per unit. What is the break-even point in dollar sales?

Break-even analysis is a special case of cost-volume-profit analysis.

Discuss how CVP analysis can be useful in planning.

A step-wise variable cost can be separated into a fixed component and a variable component.