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Exam 19: Cost-Volume-Profit Analysis

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Question 141

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

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

E) B) and D)
F) All of the above

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Question 142

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The Grant Company has sales of $300,000,and the break-even point in sales dollars if $225,000.Determine the company's margin of safety percentage.

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25% ($300,...

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Question 143

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If fixed costs are $46,800,the unit selling price is $42,and the unit variable costs are $24,what is the break-even sales (units) if the variable costs are decreased by $2?

Steven Company has fixed costs of $160,000.The unit selling price,variable cost per unit,and contribution margin per unit for the company's two products are provided below. ​ The sales mix for product X and Y is 60% and 40%,respectively.Determine the break-even point in units of X and Y.

The contribution margin ratio is

As production increases,the fixed cost per unit

Perfect Stampers makes and sells aftermarket hub caps.The variable cost for each hub cap is $4.75 and the hub cap sells for $9.95.Perfect Stampers has fixed costs per month of $3,120.Compute the contribution margin per unit and break-even sales in units and in dollars for the month.

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 45.8%.

The Dean Company has sales of $500,000,and the break-even point in sales dollars of $300,000.Determine the company's margin of safety percentage.

Which of the following describes the behavior of a variable cost per unit?

Given the following cost data,what type of cost is shown? ​ ​ ​

What was Carter Co.'s sales mix last year?

Safari Co.sells two products,Orks and Zins.Last year,Safari sold 21,000 units of Orks and 14,000 units of Zins.Related data are ​ ​ Calculate the following: a.Safari Co.'s sales mix b.Safari Co.'s unit selling price of E? c.Safari Co.'s unit contribution margin of E? d.Safari Co.'s break-even point assuming that last year's fixed costs were $160,000.

If direct materials cost per unit decreases,the amount of sales necessary to earn a desired amount of profit will decrease.

A low operating leverage is normal for highly automated industries.

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Assuming that last year's fixed costs totaled $960,000,what was Carter Co.'s break-even point in units?

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Flying Cloud Co.has the following operating data for its manufacturing operations: ​ The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant,the next break-even point for Flying Cloud Co.will be

The relevant activity base for a cost depends upon which base is most closely associated with the cost and the decision-making needs of management.