Question 1

A recent income statement of Black Corporation reported the following data: 
If these data are based on the sale of 20,000 units,the break-even point would be:

Accepted Answer

A)  9,565 units (rounded) .
B)  11,000 units (rounded) .
C)  7,586 units (rounded) .
D)  14,667 units (rounded) .
E)  an amount other than those abovE.F) A) and E)
G) A) and C)

Question 2

Which of the following underlying assumptions form(s) the basis for cost-volume-profit analysis?

Accepted Answer

A)  Revenues and costs behave in a linear manner.
B)  Costs can be categorized as variable,fixed,or semivariable.
C)  Worker efficiency and productivity remain constant.
D)  In multiproduct organizations,the sales mix remains constant.
E)  All of these are assumptions that underlie cost-volume-profit analysis.F) A) and B)
G) A) and C)

Question 3

The extent to which an organization uses fixed costs in its cost structure is measured by financial leverage.

Accepted Answer

A) True 
 B)False

Question 4

Refer to the figure above.Line C represents the level of:

Accepted Answer

A)  fixed cost.
B)  variable cost.
C)  semivariable cost.
D)  total cost.
E)  mixed cost.F) C) and D)
G) B) and D)

Question 5

Danielle sells a single product at $20 per unit.The firm's most recent income statement revealed unit sales of 100,000,variable costs of $800,000,and fixed costs of $400,000.If a $4 drop in selling price will boost unit sales volume by 20%,the company will experience:

Accepted Answer

A)  no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.
B)  an $80,000 drop in profit.
C)  a $240,000 drop in profit.
D)  a $400,000 drop in profit.
E)  a change in profit other than those abovE.F) All of the above
G) C) and D)

Question 6

The Braggs & Struttin' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below,based on sales of 40,000 units.
A.Calculate the break-even point in units and sales dollars.
B.Calculate the safety margin (in dollars).
C.Braggs & Struttin' received an order for 6,000 units at a price of $25.00.There will be no increase in fixed costs,but variable costs will be reduced by $0.54 per unit because of cheaper packaging.Determine the projected increase or decrease in profit from the order,assuming there is no opportunity costs.

Accepted Answer

Cost of goods sold consists of $810,00...

Question 7

Sanderson sells a single product for $50 that has a variable cost of $30.Fixed costs amount to $5 per unit when anticipated sales targets are met.If the company sells one unit in excess of its break-even volume,profit will be:

Accepted Answer

A)  $15.
B)  $20.
C)  $50.
D)  an amount that cannot be derived based on the information presenteD.
E)  an amount other than those in choices "A," "B," and "C",but one that can be derived based on the information presented.F) C) and D)
G) A) and D)

Question 8

CVP analysis can be used to study the effect of:

Accepted Answer

A)  changes in selling prices on a company's profitability.
B)  changes in variable costs on a company's profitability.
C)  changes in fixed costs on a company's profitability.
D)  changes in product sales mix on a company's profitability.
E)  All of thesE.F) B) and C)
G) B) and D)

Question 9

The assumptions on which cost-volume-profit analysis is based appear to be most valid for businesses:

Accepted Answer

A)  over the short run.
B)  over the long run.
C)  over both the short run and the long run.
D)  in periods of sustained profits.
E)  in periods of increasing sales.F) None of the above
G) A) and C)

Question 10

A recent income statement of Suni Corporation reported the following data: 
If these data are based on the sale of 20,000 units,the break-even point would be:

Accepted Answer

A)  7,500 units.
B)  11,628 units.
C)  12,500 units.
D)  33,333 units.
E)  an amount other than those abovE.F) D) and E)
G) C) and D)

Question 11

Assuming no change in sales volume,an increase in company's per-unit contribution margin would:

Accepted Answer

A)  increase income.
B)  decrease income.
C)  have no effect on income.
D)  increase fixed costs.
E)  decrease fixed costs.F) C) and D)
G) A) and B)

Question 12

Hatchcox Company is studying the impact of the following:
1.An increase in sales price.
2.An increase in the variable cost per unit.
3.An increase in the number of units sold (note: each unit produces a $6 contribution margin).
4.A decrease in fixed costs.
5.A proposed change in the method of compensation for salespeople,away from commissions based on gross sales dollars and toward higher monthly salaries.
Required:
Determine the impact of each of these operating changes on Hatchcox's per-unit contribution margin and break-even point by completing the chart that follows.Your responses should be Increase (INC),Decrease (DEC),No Effect (NE),or Insufficient Information to Judge (II).

Accepted Answer

The answer of Hatchcox Company is studying the impact of...

Question 13

The break-even point is that level of activity where:

Accepted Answer

A)  total revenue equals total cost.
B)  variable cost equals fixed cost.
C)  total contribution margin equals the sum of variable cost plus fixed cost.
D)  sales revenue equals total variable cost.
E)  profit is greater than zero.F) B) and D)
G) A) and C)

Question 14

The extent to which an organization uses fixed costs in its cost structure is measured by:

Accepted Answer

A)  financial leverage.
B)  operating leverage.
C)  fixed cost leverage.
D)  contribution leverage.
E)  efficiency leveragE.F) None of the above
G) B) and C)

Question 15

Maxine's budget for the upcoming year revealed the following figures: 
If the company's break-even sales total $750,000,Maxine's safety margin would be:

Accepted Answer

A)  $(90,000) .
B)  $90,000.
C)  $246,000.
D)  $336,000.
E)  $696,000.F) B) and D)
G) C) and E)

Question 16

The following information relates to Dazie Company: 
Dazie's operating leverage factor is closest to:

Accepted Answer

A)  0.067.
B)  0.167.
C)  0.400.
D)  2.500.
E)  6.000.F) B) and D)
G) A) and E)

Question 17

Each unit that Narchie sells will:

Accepted Answer

A)  increase profit by $20.
B)  increase profit by $30.
C)  increase profit by $50.
D)  increase profit by some other amount.
E)  decrease profit by $5.F) A) and E)
G) B) and E)

Question 18

At a volume of 20,000 units,Dries reported sales revenues of $1,000,000,variable costs of $300,000,and fixed costs of $260,000.The company's contribution margin per unit is:

Accepted Answer

A)  $22.
B)  $28.
C)  $35.
D)  $37.
E)  an amount other than those abovE.F) A) and E)
G) A) and C)

Question 19

Refer to the figure above.The slope of line B is equal to the:

Accepted Answer

A)  fixed cost per unit.
B)  selling price per unit.
C)  variable cost per unit.
D)  profit per unit.
E)  unit contribution margin.F) A) and B)
G) B) and C)

Question 20

A company that desires to lower its break-even point should strive to:

Accepted Answer

A)  decrease selling prices.
B)  reduce variable costs.
C)  increase fixed costs.
D)  sell more units.
E)  achieve more than one of the above actionsF) A) and C)
G) None of the above

Exam 7: Cost-Volume-Profit Analysis

A company that desires to lower its break-even point should strive to:

Correct Answer
verified

Correct Answer
verified

Refer to the figure above.Line C represents the level of:

Correct Answer
verified

The extent to which an organization uses fixed costs in its cost structure is measured by:

Correct Answer
verified

Assuming no change in sales volume,an increase in company's per-unit contribution margin would:

Correct Answer
verified

A recent income statement of Suni Corporation reported the following data: If these data are based on the sale of 20,000 units,the break-even point would be:

Correct Answer
verified

The extent to which an organization uses fixed costs in its cost structure is measured by financial leverage.

Correct Answer
verified

Which of the following underlying assumptions form(s) the basis for cost-volume-profit analysis?

Correct Answer
verified

The assumptions on which cost-volume-profit analysis is based appear to be most valid for businesses:

Correct Answer
verified

CVP analysis can be used to study the effect of:

Correct Answer
verified

At a volume of 20,000 units,Dries reported sales revenues of $1,000,000,variable costs of $300,000,and fixed costs of $260,000.The company's contribution margin per unit is:

Correct Answer
verified

The following information relates to Dazie Company: Dazie's operating leverage factor is closest to:

Correct Answer
verified

Danielle sells a single product at $20 per unit.The firm's most recent income statement revealed unit sales of 100,000,variable costs of $800,000,and fixed costs of $400,000.If a $4 drop in selling price will boost unit sales volume by 20%,the company will experience:

Correct Answer
verified

The break-even point is that level of activity where:

Correct Answer
verified

A recent income statement of Black Corporation reported the following data: If these data are based on the sale of 20,000 units,the break-even point would be:

Correct Answer
verified

Sanderson sells a single product for $50 that has a variable cost of $30.Fixed costs amount to $5 per unit when anticipated sales targets are met.If the company sells one unit in excess of its break-even volume,profit will be:

Correct Answer
verified

Correct Answer
verified

Cost of goods sold consists of $810,00...
View Answer

Each unit that Narchie sells will:

Correct Answer
verified

Refer to the figure above.The slope of line B is equal to the:

Correct Answer
verified

Maxine's budget for the upcoming year revealed the following figures: If the company's break-even sales total $750,000,Maxine's safety margin would be:

Correct Answer
verified

Exam 7: Cost-Volume-Profit Analysis

A company that desires to lower its break-even point should strive to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the figure above.Line C represents the level of:

Correct AnswerverifiedShow Answer

The extent to which an organization uses fixed costs in its cost structure is measured by:

Correct AnswerverifiedShow Answer

Assuming no change in sales volume,an increase in company's per-unit contribution margin would:

Correct AnswerverifiedShow Answer

A recent income statement of Suni Corporation reported the following data: If these data are based on the sale of 20,000 units,the break-even point would be:

Correct AnswerverifiedShow Answer

The extent to which an organization uses fixed costs in its cost structure is measured by financial leverage.

Correct AnswerverifiedShow Answer

Which of the following underlying assumptions form(s) the basis for cost-volume-profit analysis?

Correct AnswerverifiedShow Answer

The assumptions on which cost-volume-profit analysis is based appear to be most valid for businesses:

Correct AnswerverifiedShow Answer

CVP analysis can be used to study the effect of:

Correct AnswerverifiedShow Answer

At a volume of 20,000 units,Dries reported sales revenues of $1,000,000,variable costs of $300,000,and fixed costs of $260,000.The company's contribution margin per unit is:

Correct AnswerverifiedShow Answer

The following information relates to Dazie Company: Dazie's operating leverage factor is closest to:

Correct AnswerverifiedShow Answer

Danielle sells a single product at $20 per unit.The firm's most recent income statement revealed unit sales of 100,000,variable costs of $800,000,and fixed costs of $400,000.If a $4 drop in selling price will boost unit sales volume by 20%,the company will experience:

Correct AnswerverifiedShow Answer

The break-even point is that level of activity where:

Correct AnswerverifiedShow Answer

A recent income statement of Black Corporation reported the following data: If these data are based on the sale of 20,000 units,the break-even point would be:

Correct AnswerverifiedShow Answer

Sanderson sells a single product for $50 that has a variable cost of $30.Fixed costs amount to $5 per unit when anticipated sales targets are met.If the company sells one unit in excess of its break-even volume,profit will be:

Correct AnswerverifiedShow Answer

Correct Answerverified Cost of goods sold consists of $810,00...View AnswerShow Answer

Each unit that Narchie sells will:

Correct AnswerverifiedShow Answer

Refer to the figure above.The slope of line B is equal to the:

Correct AnswerverifiedShow Answer

Maxine's budget for the upcoming year revealed the following figures: If the company's break-even sales total $750,000,Maxine's safety margin would be:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Cost of goods sold consists of $810,00...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified