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Exam 4: Cost Behavior and Cost-Volume-Profit Analysis

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Question 91

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Which of the following is an example of a cost that varies in total as the number of units produced changes?

A) salary of a production supervisor
B) direct materials cost
C) property taxes on factory buildings
D) straight-line depreciation on factory equipment

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Question 92

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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 sale units if the variable costs are decreased by $2?

A) 2,127
B) 1,114
C) 2,340
D) 1,950

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Question 93

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Connor Company's fixed costs are $400,000, the unit selling price is $25, and the unit variable costs are $15.What is the break-even sale units if the variable costs are increased by $2?

If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales units?

Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17.What amount of units must be sold in order to realize an operating income of $100,000?

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

For the past year, Pedi Company had fixed costs of $70,000, unit variable costs of $32, and a unit selling price of $40.For the coming year, no changes are expected in revenues and costs, except that property taxes are expected to increase by $10,000.Determine the break-even sales units for a the past year and b the coming year.

The data required for determining the break-even point for a business are the total estimated fixed costs for a period, stated as a percentage of net sales.

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

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000.The operating leverage is

If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, what is the contribution margin ratio?

The following data are available from the accounting records of Willow Creek Co.for the month ended May 31.During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit.There were no beginning inventories, and all units were completed no work in process. Selling and administrative expenses: a Prepare a variable costing income statement. b Prepare an absorption costing income statement.

For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and anticipated break-even of 1,715 sales units. a Compute the unit sales price. b Compute the sales units required to realize an operating profit of $8,000.Round your answer to the nearest whole number.

The graph of a variable cost when plotted against its related activity base appears as a

Bobby 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.

For purposes of analysis, mixed costs can generally be separated into their variable and fixed components.

If yearly insurance premiums are increased, this change in fixed costs will result in an increase in the break-even point.

Which of the following costs is a mixed cost?

Understanding how costs behave is useful to management for all the following reasons except