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Exam 2: Cost-Volume-Profit Relationships

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Question 51

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Buentello Corporation produces and sells a single product.The company's contribution format income statement for January appears below: Required: Redo the company's contribution format income statement assuming that the company sells 1, 600 units.

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Question 52

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Data concerning Cutshall Enterprises Corporation's single product appear below: The unit sales to attain the company's monthly target profit of $16, 000 is closest to:

A) 3, 872
B) 2, 320
C) 4, 834
D) 4, 462

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Question 53

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Palomo Corporation sells a product for $170 per unit.The product's current sales are 35, 200 units and its break-even sales are 25, 344 units.The margin of safety as a percentage of sales is closest to:

Moallankamp Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $1, 131, 000 per month.The company is currently selling 7, 000 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $20 per unit.In exchange, the sales staff would accept an overall decrease in their salaries of $117, 000 per month.The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Moonen Corporation produces and sells a single product whose contribution margin ratio is 57%.The company's monthly fixed expense is $487, 350 and the company's monthly target profit is $10, 000.The dollar sales to attain that target profit is closest to:

Torbert, Inc. , produces and sells a single product.The product sells for $190.00 per unit and its variable expense is $72.20 per unit.The company's monthly fixed expense is $353, 400. Required: Determine the monthly break-even in unit sales.Show your work!

Gonyo Inc. , which produces and sells a single product, has provided the following contribution format income statement for December: Required: Redo the company's contribution format income statement assuming that the company sells 3, 400 units.

Liest Corporation produces and sells a single product whose selling price is $100.00 per unit and whose variable expense is $48.00 per unit.The company's monthly fixed expense is $244, 400. Required: a.Assume the company's monthly target profit is $5, 200.Determine the unit sales to attain that target profit.Show your work! b.Assume the company's monthly target profit is $26, 000.Determine the dollar sales to attain that target profit.Show your work!

Sanes Corporation produces and sells a single product.Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $19, 000 is closest to:

A manufacturer of cedar shingles has supplied the following data: The company's contribution margin ratio is closest to:

Mahaxay Corporation has provided its contribution format income statement for April. Required: a.Compute the degree of operating leverage to two decimal places. b.Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 9% increase in sales.

Minist Corporation sells a single product for $15 per unit.Last year, the company's sales revenue was $225, 000 and its net operating income was $18, 000.If fixed expenses totaled $72, 000 for the year, the break-even point in unit sales was:

A product sells for $10 per unit and has variable expenses of $6 per unit.Fixed expenses total $45, 000 per month.How many units of the product must be sold each month to yield a monthly profit of $15, 000?

Blackner Corporation produces and sells a single product.Data concerning that product appear below: The break-even in monthly unit sales is closest to:

For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales.

A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Seiersen Corporation's contribution format income statement for February appears below: The degree of operating leverage is closest to:

Lepage Corporation has provided its contribution format income statement for January.The company produces and sells a single product. If the company sells 4, 700 units, its total contribution margin should be closest to:

Gauani Corporation produces and sells a single product.Data concerning that product appear below: Required: a.Assume the company's monthly target profit is $21, 600.Determine the unit sales to attain that target profit.Show your work! b.Assume the company's monthly target profit is $54, 000.Determine the dollar sales to attain that target profit.Show your work!

A manufacturer of premium wire strippers has supplied the following data: The company's unit contribution margin is closest to: