Question 1

is the relative proportions or combinations of quantities of products that comprise total sales.

Accepted Answer

Sales mix refers to the relative proportions or combinations of quantities of products that make up total sales.

Question 2

Which value chain function would include the cost of computer- aided design equipment and cost to develop the prototype of a product?

Accepted Answer

The costs of computer-aided design equipment and developing a prototype are part of the design of product, services, and processes function, as they are related to the creation and development phase of a product.

Question 3

Assume the following cost information for Zachary Company: $\begin{array}{ll}
\text { Selling price per unit } & \$ 144 \
\text { Variable costs per unit } & \$ 80 \
\text { Total fixed costs } & \$ 80,000 \
\text { Tax rate } & 40 \%
\end{array}$ must be sold to earn an after- tax net income of $40,800.

Accepted Answer

D

Question 4

Meredith Company wishes to earn after- tax net income of $18,000. Total fixed costs are $84,000, and the contribution margin per unit is $6.00. Meredith's tax rate is 40%. The number of units that must be sold to breakeven is:

Accepted Answer

The answer of Meredith Company wishes to earn after- tax...

Question 5

is not shown in the cost- volume- profit graph.

Accepted Answer

The cost-volume-profit graph typically shows sales volume, the break-even point, and profit or loss at various activity levels, but it does not show the fixed cost per unit.

Question 6

If total fixed costs are $84,000, contribution margin per unit is $6.00, and targeted after- tax net income is $18,000 with a 40% tax rate, then the number of units which must be sold is:

Accepted Answer

Explanation:Contribution margin per unit = $6.00Targeted after-tax net income = $18,000Tax rate = 40%Total fixed costs = $84,000Contribution margin ratio = Contribution margin per unit / Selling price per unit= $6.00 / (Selling price per unit)= 0.60Break-even point in units = Total fixed costs / Contribution margin per unit= $84,000 / $6.00= 14,000 unitsNumber of units to be sold = Break-even point in units + (Targeted after-tax net income / (1 - Tax rate))= 14,000 units + ($18,000 / (1 - 0.40))= 14,000 units + $30,000= 19,000 units

Question 7

If the proportions in a sales mix change, the:

Accepted Answer

When the sales mix changes, it affects the cost-volume-profit relationship because the contribution margin per unit and the overall profitability can change, altering the break-even point and net income.

Question 8

is the excess of sales over the cost of goods sold.

Accepted Answer

Gross margin is the excess of sales over the cost of goods sold.

Question 9

Which of the following is not a cost driver of customer services costs?

Accepted Answer

The answer of Which of the following is not a...

Question 10

If the sales price per unit is $180, variable cost per unit is $96, targeted net income is $52,800, and total fixed costs are $39,600, the number of units that must be sold is:

Accepted Answer

To find the number of units that must be sold, use the formula: (Fixed Costs + Targeted Net Income) / (Sales Price per Unit - Variable Cost per Unit). Plugging in the values: (39,600 + 52,800) / (180 - 96) = 1,100 units.

Question 11

As the cost- driver activity level increases within the relevant range:

Accepted Answer

Total fixed costs remain unchanged within the relevant range, meaning they do not vary with the level of activity.

Question 12

If targeted sales volume in units is 62,300, total fixed costs are $31,200, and contribution margin per unit is $1.20, then the targeted net income is:

Accepted Answer

Targeted net income = (Targeted sales volume in units * Contribution margin per unit) - Total fixed costs= (62,300 * $1.20) - $31,200= $74,760 - $31,200= $43,560

Question 13

Muy Mal Company, a producer of salsa, has the following information: $$\begin{array} { l l } 
\text { Income tax rate } & 30 \% \
\text { Selling pric e per unit } & \$ 5.00 \
\text { Variable cost p er unit } & \$ 3,00 \
\text { Total fixed costs } & \$ 90,000.00
\end{array}$$ must be sold to obtain a targeted after- tax income of $14,000.

Accepted Answer

To find the number of units needed to achieve a targeted after-tax income, first calculate the pre-tax income required: $14,000 / (1 - 0.30) = $20,000. Then, use the formula: (Fixed Costs + Pre-tax Income) / (Selling Price - Variable Cost) = (90,000 + 20,000) / (5 - 3) = 55,000 units.

Question 14

Squeeze Me Company produces Beanie Babies. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break- even point is:

Accepted Answer

Explanation:Contribution Margin per unit = $20.00 - $14.00 = $6.00Break-even point = 435,000 / 6.00 = 72,500 dolls

Question 15

Which of the following would be a good cost driver for salaries of product and supervisory salaries?

Accepted Answer

Number of people supervised is a good cost driver for salaries of product and supervisory salaries because it is a measure of the amount of work that the supervisors are responsible for. The more people that a supervisor is responsible for, the more work they will have to do and the higher their salary will be.

Question 16

If fixed expenses were the same and contribution margin per unit was cut in half, then the break- even point would:

Accepted Answer

The break-even point is calculated as fixed expenses divided by the contribution margin per unit. If the contribution margin per unit is cut in half, the break-even point will double, assuming fixed expenses remain the same.

Question 17

An increase in total variable cost usually indicates:

Accepted Answer

An increase in total variable cost typically indicates that the cost-driver activity level is increasing, as variable costs change in direct proportion to changes in activity level.

Question 18

If the sales price per unit is $100, the total fixed costs are $75,000, and the break- even volume in dollar sales is $250,000, then the variable cost per unit is:

Accepted Answer

The break-even point in dollar sales is calculated as Fixed Costs / (1 - Variable Cost per Unit / Sales Price per Unit). Given the break-even sales of $250,000 and fixed costs of $75,000, we can solve for the variable cost per unit: $75,000 / ($250,000 / $100) = $70.

Question 19

If the contribution- margin ratio is 0.30, targeted net income is $76,800, and targeted sales volume in dollars is $480,000, then total fixed costs are:

Accepted Answer

The answer of If the contribution- margin ratio is 0.30,...

Question 20

When analyzing cost, think of:

Accepted Answer

The answer of When analyzing cost, think of:
...

Quiz 2: Introduction to Cost Behavior and Cost Volume Relationships