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Exam 19: Cost Behavior and Cost-Volume-Profit Analysis

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Question 41

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Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X's and 35,000 units of Y's. Related data are: What was Rusty Co.'s weighted average unit contribution margin?

A) $60.00
B) $20.00
C) $40.00
D) $22.50

E) B) and D)
F) B) and C)

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Question 42

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If sales are $525,000, variable costs are 53% of sales, and operating income is $50,000, what is the contribution margin ratio?

A) 47%
B) 26.5%
C) 9.5%
D) 53%

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

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Question 43

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Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: 0 What was Carter Co.'s weighted average unit contribution margin?

If sales are $500,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage?

The reliability of cost-volume-profit analysis does NOT depend on the assumption that costs can be accurately divided into fixed and variable components.

Douglas Company has a contribution margin ratio of 30%. If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?

If the property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.

The point where the profit line intersects the horizontal axis on the profit-volume chart represents:

A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit was:

Trail Bikes, Inc. sells three Deluxe bikes for every seven Standard bikes. The Deluxe bike sells for $1,800 and has variable costs of $1,200. The Standard bike sells for $600 and has variable costs of $200. Required: A. If Trail Bikes has fixed costs that total $1,702,000, how many bikes must be sold in order for the company to break even? B. How many of these bikes will be Deluxe bikes and how many will be the Standard bikes?

If fixed costs increased and variable costs per unit decreased, the break-even point would:

A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.

Calzone Co. has budgeted salary increases to factory supervisors totaling 8%. If selling prices and all other cost relationships are held constant, next year's break-even point:

If fixed costs are $490,000, the unit selling price is $35, and the unit variable costs are $20, what is the break-even sales (units) if fixed costs are reduced by $40,000?

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the cost-volume-profit chart.

Unit variable cost does not change as the number of units of activity changes.

The Waterfall Company sells a product for $150 per unit. The variable cost is $80 per unit, and fixed costs are $270,000. Determine the (a) break-even point in sales units, and (b) break-even points in sales units if the company desires a target profit of $36,000. Round your answer to the nearest whole number.

If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, what are the old and new break-even sales (units) if the unit selling price increases by $10?