Question 1

Wang Co.manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit.Annual fixed costs are $800,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars.

Accepted Answer

A)  $1,560,000.
B)  $2,000,000.
C)  $2,200,000.
D)  $2,895,652.
E)  $2,460,000.

Question 2

Alvarez Company's break-even point in units is 1,000.The sales price per unit is $10 and variable cost per unit is $7.If the company sells 2,500 units,what will net income be?

Accepted Answer

A)  $4,500
B)  $7,500
C)  $17,000
D)  $35,000
E)  $3,000

Question 3

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Accepted Answer

A)  Current product mix.
B)  Relevant mix.
C)  Sales mix.
D)  Inventory cost ratio.
E)  Production ratio.

Question 4

A CVP graph presents data on:

Accepted Answer

A)  Profit and loss on a per unit basis.
B)  Profit,loss,and break-even on a total dollar basis.
C)  Profit,loss,and break-even on a per unit basis.
D)  Only profit and loss on a total basis.
E)  Profit and loss on a budget and actual basis.

Question 5

A graphic depiction of the break-even point is known as a cost-volume-profit (CVP)chart.

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following statements is not true?

Accepted Answer

A)  Total fixed costs remain the same regardless of volume within the relevant range.
B)  Total variable costs change with volume.
C)  Total variable costs decrease as the volume increases.
D)  Fixed costs per unit increase as the volume decreases.
E)  Variable costs per unit remain the same regardless of the volume.

Question 7

The contribution margin per unit is the price at which a unit must be sold in order for the company to break even.

Accepted Answer

A) True 
 B)False

Exam 18: Cost Behavior and Cost-Volume-Profit Analysis

A graphic depiction of the break-even point is known as a cost-volume-profit (CVP)chart.

Correct Answer
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A CVP graph presents data on:

Correct Answer
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Alvarez Company's break-even point in units is 1,000.The sales price per unit is $10 and variable cost per unit is $7.If the company sells 2,500 units,what will net income be?

Correct Answer
verified

The contribution margin per unit is the price at which a unit must be sold in order for the company to break even.

Correct Answer
verified

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Correct Answer
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Which one of the following statements is not true?

Correct Answer
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Wang Co.manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit.Annual fixed costs are $800,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars.

Correct Answer
verified

Exam 18: Cost Behavior and Cost-Volume-Profit Analysis

A graphic depiction of the break-even point is known as a cost-volume-profit (CVP)chart.

Correct AnswerverifiedShow Answer

A CVP graph presents data on:

Correct AnswerverifiedShow Answer

Alvarez Company's break-even point in units is 1,000.The sales price per unit is $10 and variable cost per unit is $7.If the company sells 2,500 units,what will net income be?

Correct AnswerverifiedShow Answer

The contribution margin per unit is the price at which a unit must be sold in order for the company to break even.

Correct AnswerverifiedShow Answer

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Correct AnswerverifiedShow Answer

Which one of the following statements is not true?

Correct AnswerverifiedShow Answer

Wang Co.manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit.Annual fixed costs are $800,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars.

Correct AnswerverifiedShow Answer

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