FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Cost-Volume-Profit Relationships

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

The impact on net operating income of a given dollar change in sales can be computed by multiplying the contribution margin by the dollar change in sales.

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Data concerning Hinkson Corporation's single product appear below: Fixed expenses are $720,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $60,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?

A) increase of $59,100
B) decrease of $121,700
C) increase of $894,300
D) decrease of $1,700

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Frank Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $45,000 per year, and the company must sell 5,000 units to break even. If the company has a target profit of $13,500, sales in units must be:

The following monthly data are available for the Wyatt Corporation and its only product: The margin of safety for the company during May was:

If the company sells 5,700 units, its net operating income should be closest to:

The break-even in units sold will decrease if there is an increase in:

Lopp Corporation produces and sells a single product. Data concerning that product appear below: Required: Assume the company's monthly target profit is $38,280. Determine the unit sales to attain that target profit. Show your work!

Maddaloni International, Inc., produces and sells a single product. The product sells for $160.00 per unit and its variable expense is $46.40 per unit. The company's monthly fixed expense is $219,248. Required: Determine the monthly break-even in total dollar sales. Show your work!

Mason Enterprises has prepared the following budget for the month of July: Assuming that total fixed expenses will be $150,000 and the sales mix remains constant, the break-even point would be closest to:

Pultz Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in total dollar sales. Show your work!

Alpha Corporation reported the following data for its most recent year: sales, $500,000; variable expenses, $300,000; and fixed expenses, $150,000. The company's degree of operating leverage is:

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.

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $126,000?

In the most recent month, Shoemaker Corporation's total contribution margin was $29,600 and its net operating income $3,000. 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 10% increase in sales.

This question is to be considered independently of all other questions relating to Boenisch Corporation. Refer to the original data when answering this question. -The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $16 per unit. In exchange, the sales staff would accept a decrease in their salaries of $102,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 700 units. What should be the overall effect on the company's monthly net operating income of this change?

The margin of safety in dollars equals the excess of actual sales over budgeted sales.

Assume the company's target profit is $15,000. The dollar sales to attain that target profit is closest to:

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:

Wyly Inc. produces and sells a single product. The selling price of the product is $170.00 per unit and its variable cost is $62.90 per unit. The fixed expense is $356,643 per month. The break-even in monthly dollar sales is closest to:

If the company's sales increase by 10%, its net operating income should increase by about: