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Exam 11: Cost Behavior and Cost-Volume-Profit Analysis

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Question 31

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If fixed costs are $550,000 and the unit contribution margin is $15,what amount of units must be sold in order to realize an operating income of $125,000?

A) 45,000 units
B) 10,417 units
C) 45,833 units
D) 28,333 units

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

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Question 32

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The relative distribution of sales among the various products sold by a business is termed as:

A) business's basket of goods.
B) contribution margin mix.
C) sales mix.
D) product portfolio.

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

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Question 33

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The graph of the variable costs when plotted against the activity level appears as a line parallel to horizontal axis.

Currently,fixed costs are $810,000,the unit selling price is $60,and the unit variable cost is $48.What would be the break-even sales (in units) ,if the variable cost is increased by $2?

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

If a business had sales of $4,000,000 and a margin of safety of 25%,what was the break-even point?

Variable cost per unit remains the same regardless of activity level.

If fixed costs are $350,000,the unit selling price is $80,and the unit variable cost is $30,what is the break-even sales (in units) ?

If fixed costs are $250,000,the unit selling price is $105,and the unit variable cost is $65,what is the break-even sales (in units) ?

Given the following costs and activity observations for Pike Company's utilities,use the high­low method to calculate Pike's variable utilities costs per machine hour.

Refer to the information provided for Kennedy Co.Assuming that last year's fixed costs totaled $910,000,what was Kennedy's break-even point in units?

Which of the following costs is an example of fixed cost?

If fixed costs are $450,000 and the unit contribution margin is $50,the sales necessary to earn an operating income of $30,000 are 14,000 units.

Break-even analysis is a type of cost-volume-profit analysis.

Cost behavior refers to the manner in which a cost changes as a related activity changes.

If a business had a capacity of $10,000,000 of sales,actual sales were $6,000,000,break-even sales was $4,500,000,fixed costs amounted to $1,800,000,and variable costs amounted to 60% of sales,what is the margin of safety expressed as a percentage of sales?

What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000,65% of sales are variable costs,and operating income of $24,000?

If variable costs per unit decreased because of a decrease in utility rates,the break-even point would:

If direct materials cost per unit decreases,the break-even point will increase.

For the current year ending April 30,Philip Company expects fixed costs of $70,000,a unit variable cost of $45,and a unit selling price of $95. (a) Compute the anticipated break-even sales (in units). (b) Compute the sales (in units) required to realize an operating profit of $8,000