Quiz 9: Break-Even Point and Cost-Volume-Profit Analysis
Business
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Q 2Q 2
Absorption costing is more useful than variable costing in determining a company's break-even point.
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Q 3Q 3
Variable costing is more useful than absorption costing in determining a company's break-even point.
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Q 12Q 12
Dividing total fixed costs by the contribution margin ratio yields break-even point in sales dollars.
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Q 13Q 13
Dividing total fixed costs by the contribution margin ratio yields break-even point in units.
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Q 14Q 14
After the break-even point is reached,each dollar of contribution margin is a dollar of before-tax profit.
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Q 15Q 15
After the break-even point is reached,each dollar of contribution margin is a dollar of after-tax profit.
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Q 16Q 16
When using CVP analysis to determine sales level for a desired amount of profit,the profit is treated as an additional cost to be covered.
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Q 17Q 17
When computing profit on an after-tax basis,it is necessary to divide the pretax profit by the effective tax rate.
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Q 18Q 18
When computing profit on an after-tax basis,it is necessary to multiply the pretax profit by (1 - effective tax rate).
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Q 24Q 24
In a multi-product environment,CVP analysis makes the assumption that a company's sales mix is constant.
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Q 26Q 26
There is an inverse relationship between degree of operating leverage and the margin of safety.
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Q 29Q 29
The level of activity where a company's total revenues equal total costs is referred to as the ______________________________.
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Q 30Q 30
Contribution margin divided by revenue is referred to as the ________________________________________.
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Q 31Q 31
A process that focuses only on factors that change from one course of action to another is referred to as ___________________________________.
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Q 32Q 32
The excess of budgeted or actual sales over sales at break-even point is referred to as ______________________________.
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Q 33Q 33
The relationship between a company's variable costs and fixed costs is referred to as its ______________________________.
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Q 34Q 34
The __________________________________________________ is computed by dividing the contribution margin by profit before tax.
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Q 36Q 36
CVP analysis requires costs to be categorized as
A)either fixed or variable.
B)direct or indirect.
C)product or period.
D)standard or actual.
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Q 37Q 37
With respect to fixed costs,CVP analysis assumes total fixed costs
A)per unit remain constant as volume changes.
B)remain constant from one period to the next.
C)vary directly with volume.
D)remain constant across changes in volume.
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Multiple Choice
Q 38Q 38
CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable.Consistent with these assumptions,as volume decreases total
A)fixed costs decrease.
B)variable costs remain constant.
C)costs decrease.
D)costs remain constant.
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Multiple Choice
Q 39Q 39
CVP analysis is based on concepts from
A)standard costing.
B)variable costing.
C)job order costing.
D)process costing.
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Multiple Choice
Q 40Q 40
Cost-volume-profit analysis is a technique available to management to understand better the interrelationships of several factors that affect a firm's profit.As with many such techniques,the accountant oversimplifies the real world by making assumptions.Which of the following is not a major assumption underlying CVP analysis?
A)All costs incurred by a firm can be separated into their fixed and variable components.
B)The product selling price per unit is constant at all volume levels.
C)Operating efficiency and employee productivity are constant at all volume levels.
D)For multi-product situations,the sales mix can vary at all volume levels.
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Multiple Choice
Q 41Q 41
In CVP analysis,linear functions are assumed for
A)contribution margin per unit.
B)fixed cost per unit.
C)total costs per unit.
D)all of the above.
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Q 42Q 42
Which of the following factors is involved in studying cost-volume-profit relationships?
A)product mix
B)variable costs
C)fixed costs
D)all of the above
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Multiple Choice
Q 43Q 43
Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only
A)fixed and mixed costs.
B)relevant fixed costs.
C)relevant variable costs.
D)a relevant range of volume.
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Multiple Choice
Q 44Q 44
After the level of volume exceeds the break-even point
A)the contribution margin ratio increases.
B)the total contribution margin exceeds the total fixed costs.
C)total fixed costs per unit will remain constant.
D)the total contribution margin will turn from negative to positive.
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Multiple Choice
Q 45Q 45
Which of the following will decrease the break-even point?
A)yes yes yes
B)yes no yes
C)yes no no
D)no yes no
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Multiple Choice
Q 46Q 46
At the break-even point,fixed costs are always
A)less than the contribution margin.
B)equal to the contribution margin.
C)more than the contribution margin.
D)more than the variable cost.
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Q 47Q 47
The method of cost accounting that lends itself to break-even analysis is
A)variable.
B)standard.
C)absolute.
D)absorption.
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Q 48Q 48
Given the following notation,what is the break-even sales level in units?
SP = selling price per unit,FC = total fixed cost,VC = variable cost per unit
A)SP/(FC/VC)
B)FC/(VC/SP)
C)VC/(SP - FC)
D)FC/(SP - VC)
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Multiple Choice
Q 49Q 49
Consider the equation X = Sales - [(CM/Sales)´ (Sales)].What is X?
A)net income
B)fixed costs
C)contribution margin
D)variable costs
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Multiple Choice
Q 50Q 50
If a firm's net income does not change as its volume changes,the firm('s)
A)must be in the service industry.
B)must have no fixed costs.
C)sales price must equal $0.
D)sales price must equal its variable costs.
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Multiple Choice
Q 51Q 51
Break-even analysis assumes over the relevant range that
A)total variable costs are linear.
B)fixed costs per unit are constant.
C)total variable costs are nonlinear.
D)total revenue is nonlinear.
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Multiple Choice
Q 52Q 52
To compute the break-even point in units,which of the following formulas is used?
A)FC/CM per unit
B)FC/CM ratio
C)CM/CM ratio
D)(FC+VC)/CM ratio
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Multiple Choice
Q 53Q 53
A firm's break-even point in dollars can be found in one calculation using which of the following formulas?
A)FC/CM per unit
B)VC/CM
C)FC/CM ratio
D)VC/CM ratio
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Multiple Choice
Q 54Q 54
The contribution margin ratio always increases when the
A)variable costs as a percentage of net sales increase.
B)variable costs as a percentage of net sales decrease.
C)break-even point increases.
D)break-even point decreases.
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Multiple Choice
Q 55Q 55
In a multiple-product firm,the product that has the highest contribution margin per unit will
A)generate more profit for each $1 of sales than the other products.
B)have the highest contribution margin ratio.
C)generate the most profit for each unit sold.
D)have the lowest variable costs per unit.
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Multiple Choice
Q 56Q 56
____ focuses only on factors that change from one course of action to another.
A)Incremental analysis
B)Margin of safety
C)Operating leverage
D)A break-even chart
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Multiple Choice
Q 57Q 57
On a break-even chart,the break-even point is located at the point where the total
A)revenue line crosses the total fixed cost line.
B)revenue line crosses the total contribution margin line.
C)fixed cost line intersects the total variable cost line.
D)revenue line crosses the total cost line.
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Multiple Choice
Q 58Q 58
In a CVP graph,the slope of the total revenue line indicates the
A)rate at which profit changes as volume changes.
B)rate at which the contribution margin changes as volume changes.
C)ratio of increase of total fixed costs.
D)total costs per unit.
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Multiple Choice
Q 59Q 59
In a CVP graph,the area between the total cost line and the total revenue line represents total
A)contribution margin.
B)variable costs.
C)fixed costs.
D)profit.
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Q 60Q 60
In a CVP graph,the area between the total cost line and the total fixed cost line yields the
A)fixed costs per unit.
B)total variable costs.
C)profit.
D)contribution margin.
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Multiple Choice
Q 61Q 61
If a company's fixed costs were to increase,the effect on a profit-volume graph would be that the
A)contribution margin line would shift upward parallel to the present line.
B)contribution margin line would shift downward parallel to the present line.
C)slope of the contribution margin line would be more pronounced (steeper).
D)slope of the contribution margin line would be less pronounced (flatter).
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Multiple Choice
Q 62Q 62
If a company's variable costs per unit were to increase but its unit selling price stays constant,the effect on a profit-volume graph would be that the
A)contribution margin line would shift upward parallel to the present line.
B)contribution margin line would shift downward parallel to the present line.
C)slope of the contribution margin line would be pronounced (steeper).
D)slope of the contribution margin line would be less pronounced (flatter).
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Multiple Choice
Q 63Q 63
The most useful information derived from a cost-volume-profit chart is the
A)amount of sales revenue needed to cover enterprise variable costs.
B)amount of sales revenue needed to cover enterprise fixed costs.
C)relationship among revenues,variable costs,and fixed costs at various levels of activity.
D)volume or output level at which the enterprise breaks even.
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Multiple Choice
Q 64Q 64
The margin of safety would be negative if a company('s)
A)was presently operating at a volume that is below the break-even point.
B)present fixed costs were less than its contribution margin.
C)variable costs exceeded its fixed costs.
D)degree of operating leverage is greater than 100.
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Multiple Choice
Q 65Q 65
The margin of safety is a key concept of CVP analysis.The margin of safety is the
A)contribution margin rate.
B)difference between budgeted contribution margin and actual contribution margin.
C)difference between budgeted contribution margin and break-even contribution margin.
D)difference between budgeted sales and break-even sales.
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Multiple Choice
Q 66Q 66
Management is considering replacing an existing sales commission compensation plan with a fixed salary plan.If the change is adopted,the company's
A)break-even point must increase.
B)margin of safety must decrease.
C)operating leverage must increase.
D)profit must increase.
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Multiple Choice
Q 67Q 67
As projected net income increases the
A)degree of operating leverage declines.
B)margin of safety stays constant.
C)break-even point goes down.
D)contribution margin ratio goes up.
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Q 68Q 68
A managerial preference for a very low degree of operating leverage might indicate that
A)an increase in sales volume is expected.
B)a decrease in sales volume is expected.
C)the firm is very unprofitable.
D)the firm has very high fixed costs.
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Multiple Choice
Q 69Q 69
Parker Company
Below is an income statement for Parker Company:
Refer to Parker Company.What is Parker's degree of operating leverage?
A)3.67
B)5.33
C)1.45
D)2.67
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Multiple Choice
Q 70Q 70
Parker Company
Below is an income statement for Parker Company:
Refer to Parker Company.Based on the cost and revenue structure on the income statement,what was Parker's break-even point in dollars?
A)$200,000
B)$325,000
C)$300,000
D)$290,909
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Multiple Choice
Q 71Q 71
Parker Company
Below is an income statement for Parker Company:
Refer to Parker Company.What was Parker's margin of safety?
A)$200,000
B)$75,000
C)$100,000
D)$109,091
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Multiple Choice
Q 72Q 72
Parker Company
Below is an income statement for Parker Company:
Refer to Parker Company.Assuming that the fixed costs are expected to remain at $200,000 for the coming year and the sales price per unit and variable costs per unit are also expected to remain constant,how much profit before taxes will be produced if the company anticipates sales for the coming year rising to 130 percent of the current year's level?
A)$97,500
B)$195,000
C)$157,500
D)A prediction cannot be made from the information given.
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Multiple Choice
Q 73Q 73
Real Products Company
Real Products Company produces and sells a single product.Information on its costs follow:
Refer to Real Products Company.Assume Real Products Company produced and sold 5,000 units.At this level of activity,it produced a profit of $18,000.What was Real Products Company's sales price per unit?
A)$15.00
B)$11.40
C)$9.60
D)$10.00
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Multiple Choice
Q 74Q 74
Real Products Company
Real Products Company produces and sells a single product.Information on its costs follow:
Refer to Real Products Company.In the upcoming year,Real Products Company estimates that it will produce and sell 4,000 units.The variable costs per unit and the total fixed costs are expected to be the same as in the current year.However,it anticipates a sales price of $16 per unit.What is Real Products Company's projected margin of safety for the coming year?
A)$7,000
B)$20,800
C)$18,400
D)$13,000
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Multiple Choice
Q 75Q 75
Harris Manufacturing incurs annual fixed costs of $250,000 in producing and selling a single product.Estimated unit sales are 125,000.An after-tax income of $75,000 is desired by management.The company projects its income tax rate at 40 percent.What is the maximum amount that Harris can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at $6?
A)$3.37
B)$3.59
C)$3.00
D)$3.70
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Multiple Choice
Q 76Q 76
Stewart Company
The following information relates to financial projections of Stewart Company:
Refer to Stewart Company.How many units would Stewart Company need to sell to earn a profit before taxes of $10,000?
A)25,714
B)10,000
C)8,571
D)12,000
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Multiple Choice
Q 77Q 77
Stewart Company
The following information relates to financial projections of Stewart Company:
Refer to Stewart Company.If Stewart Company achieves its projections,what will be its degree of operating leverage?
A)6.00
B)1.20
C)1.68
D)2.40
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Multiple Choice
Q 78Q 78
Putnam Company
Below is an income statement for Putnam Company:
Refer to Putnam Company.What is Putnam's degree of operating leverage?
A)1.33
B)2.00
C)3.00
D)4.00
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Multiple Choice
Q 79Q 79
Putnam Company
Below is an income statement for Putnam Company:
Refer to Putnam Company.Based on the cost and revenue structure on the income statement,what was Putnam's break-even point in dollars?
A)$300,000
B)$400,000
C)$425,000
D)$450,000
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Multiple Choice
Q 80Q 80
Putnam Company
Below is an income statement for Putnam Company:
Refer to Putnam Company.What was Putnam's margin of safety?
A)$150,000
B)$175,000
C)$200,000
D)$300,000
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Multiple Choice
Q 81Q 81
Putnam Company
Below is an income statement for Putnam Company:
Refer to Putnam Company.Assuming that the fixed costs are expected to remain at $300,000 for the coming year and the sales price per unit and variable costs per unit are also expected to remain constant,how much profit before taxes will be produced if the company anticipates sales for the coming year rising to 125 percent of the current year's level?
A)$112,500
B)$187,500
C)$262,500
D)$300,000
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Multiple Choice
Q 82Q 82
Blue Mountain Company manufactures a single product.In the prior year,the company had sales of $90,000,variable costs of $50,000,and fixed costs of $30,000.Blue Mountain expects its cost structure and sales price per unit to remain the same in the current year,however total sales are expected to increase by 20 percent.If the current year projections are realized,net income should exceed the prior year's net income by:
A)100 percent.
B)80 percent.
C)20 percent.
D)50 percent.
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Multiple Choice
Q 83Q 83
Daybreak Corporation
Daybreak Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $10,000.
A)333
B)1,111
C)2,333
D)3,332
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Multiple Choice
Q 84Q 84
Daybreak Corporation
Daybreak Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $10,000.
A)5,250
B)6,000
C)7,000
D)7,875
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Multiple Choice
Q 85Q 85
Daybreak Corporation
Daybreak Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $10,000.
A)6,000
B)6,250
C)6,923
D)7,000
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Multiple Choice
Q 86Q 86
Surfside Corporation
Surfside Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $9,000.
A)3,750
B)750
C)3,600
D)1,800
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Multiple Choice
Q 87Q 87
Surfside Corporation
Surfside Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $9,000.
A)3,000
B)4,000
C)3,600
D)3,500
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Multiple Choice
Q 88Q 88
Surfside Corporation
Surfside Corporation manufactures and sells two products: A and B.The operating results of the company are as follows:
In addition,the company incurred total fixed costs in the amount of $9,000.
A)8,750
B)20,000
C)10,000
D)8,400
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Multiple Choice
Q 89Q 89
Jean Simmons Company
Below is an income statement for Jean Simmons Company:
Refer to Jean Simmons Company.What was the company's margin of safety?
A)$50,000
B)$100,000
C)$150,000
D)$25,000
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Multiple Choice
Q 90Q 90
Jean Simmons Company
Below is an income statement for Jean Simmons Company:
Refer to Jean Simmons Company.If the unit sales price for Jean Simmons's sole product was $10,how many units would it have needed to sell to produce a profit of $40,000?
A)27,500
B)29,000
C)28,000
D)can't be determined from the information given
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Multiple Choice
Q 91Q 91
A firm estimates that it will sell 100,000 units of its sole product in the coming period.It projects the sales price at $40 per unit,the CM ratio at 60 percent,and profit at $500,000.What is the firm budgeting for fixed costs in the coming period?
A)$1,600,000
B)$2,400,000
C)$1,100,000
D)$1,900,000
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Multiple Choice
Q 92Q 92
Broncho Lids Corporation manufactures a western-style hat that sells for $10 per unit.This is its sole product and it has projected the break-even point at 50,000 units in the coming period.If fixed costs are projected at $100,000,what is the projected contribution margin ratio?
A)80 percent
B)20 percent
C)40 percent
D)60 percent
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Multiple Choice
Q 93Q 93
Horner Company
Horner Company manufactures a single product.Each unit sells for $15.The firm's projected costs are listed below:
Refer to Horner Company.What is Horner's projected margin of safety for the current year?
A)$133,333
B)$150,000
C)$80,000
D)$100,000
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Multiple Choice
Q 94Q 94
Horner Company
Horner Company manufactures a single product.Each unit sells for $15.The firm's projected costs are listed below:
Refer to Horner Company.What is Horner's projected degree of operating leverage for the current year?
A)2.25
B)1.80
C)3.75
D)1.67
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Multiple Choice
Q 95Q 95
Austin,Brown,and Freeman Companies
Below are income statements that apply to three companies: Austin,Brown,and Freeman:
Refer to Austin,Brown,and Freeman Companies.Within the relevant range,if sales go up by $1 for each firm,which firm will experience the greatest increase in profit?
A)Austin Company
B)Brown Company
C)Freeman Company
D)can't be determined from the information given
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Multiple Choice
Q 96Q 96
Austin,Brown,and Freeman Companies
Below are income statements that apply to three companies: Austin,Brown,and Freeman:
Refer to Austin,Brown,and Freeman Companies.Within the relevant range,if sales go up by one unit for each firm,which firm will experience the greatest increase in net income?
A)Austin Company
B)Brown Company
C)Freeman Company
D)can't be determined from the information given
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Multiple Choice
Q 97Q 97
Austin,Brown,and Freeman Companies
Below are income statements that apply to three companies: Austin,Brown,and Freeman:
Refer to Austin,Brown,and Freeman Companies.At sales of $100,which firm has the highest margin of safety?
A)Austin Company
B)Brown Company
C)Freeman Company
D)They all have the same margin of safety.
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Multiple Choice
Q 98Q 98
McDonald Company
The following information relates to financial projections of McDonald Company:
Refer to McDonald Company.How many units would McDonald Company need to sell to earn a profit before taxes of $15,000?
A)9,375
B)12,000
C)15,000
D)37,500
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Multiple Choice
Q 99Q 99
McDonald Company
The following information relates to financial projections of McDonald Company:
Refer to McDonald Company.If McDonald Company achieves its projections,what will be its degree of operating leverage?
A)6.25
B)1.19
C)1.68
D)3.00
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Multiple Choice
Q 100Q 100
Lance is interested in entering the catfish farming business.He estimates if he enters this business,his fixed costs would be $50,000 per year and his variable costs would equal 30 percent of sales.If each catfish sells for $2,how many catfish would Lance need to sell to generate a profit that is equal to 10 percent of sales?
A)40,000
B)41,667
C)35,000
D)No level of sales can generate a 10 percent net return on sales.
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Multiple Choice
Q 101Q 101
Robert Wilson Company
Below is an income statement for Robert Wilson Company:
Refer to Robert Wilson Company.What was the company's margin of safety?
A)$ 37,500
B)$ 75,000
C)$125,000
D)$150,000
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Multiple Choice
Q 102Q 102
Robert Wilson Company
Below is an income statement for Robert Wilson Company:
Refer to Robert Wilson Company.What is the company's degree of operating leverage (DOL)?
A)2.67
B)3.2
C)5.33
D)10.67
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Multiple Choice
Q 103Q 103
The following information pertains to Venus Company's cost-volume-profit relationships:
How much will be contributed to profit before taxes by the 1,001st unit sold?
A)$650
B)$500
C)$150
D)$0
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Multiple Choice
Q 104Q 104
The following information pertains to Gemini Company's cost-volume-profit relationships:
How much will be contributed to profit before taxes by the 1,501st unit sold?
A)$850
B)$700
C)$150
D)$0
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Multiple Choice
Q 105Q 105
Information concerning Thompson Corporation's Product A follows:
Assuming that Thompson increased sales of Product A by 20 percent,what should the profit from Product A be?
A)$20,000
B)$24,000
C)$32,000
D)$80,000
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Multiple Choice
Q 106Q 106
Information concerning Lynch Corporation's Product A follows:
Assuming that Lynch increased sales of Product A by 25 percent,what should the profit from Product A be?
A)$ 50,000
B)$ 62,500
C)$ 75,000
D)$170,000
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Multiple Choice
Q 107Q 107
Tisdale Company reported the following results from sales of 5,000 units of Product A for June:
Assume that Tisdale increases the selling price of Product A by 10 percent in July.How many units of Product A would have to be sold in July to generate an operating income of $20,000?
A)4,000
B)4,300
C)4,545
D)5,000
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Multiple Choice
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Q 109Q 109
What major assumption do multi-product firms need to make in using CVP analysis that single-product firms need not make?
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Q 110Q 110
What important information is conveyed by the margin of safety calculation in CVP analysis?
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Q 112Q 112
The O'Brien Company sells two products,A and B,with contribution margin ratios of 40 and 30 percent and selling prices of $5 and $2.50 a unit.Fixed costs amount to $72,000 a month.Monthly sales average 30,000 units of product A and 40,000 units of product B.
Required:
At current sales levels increase advertising.
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Q 113Q 113
The Jordan Company makes three products.The cost data for these three products is as follows:
C.
Required:
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Q 114Q 114
Carson Company produces and sells two products: A and B in the ratio of 3A to 5B.Selling prices for A and B are,respectively,$1,200 and $240;respective variable costs are $480 and $160.The company's fixed costs are $1,800,000 per year.
Compute the volume of sales in units of each product needed to:
Required:
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Q 115Q 115
Burns Corporation
Information relating to the current operations of Burns Corporation follows:
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Q 116Q 116
Burns Corporation
Information relating to the current operations of Burns Corporation follows:
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Q 117Q 117
Bridges Corporation
Bridges Corporation manufactures and sells two products: A and B.
B.The overall company break-even point is found by dividing total fixed costs by the contribution margin on one unit of sales mix: $10,000/$20 = 500 units.The 500 units of sales mix contain 500 ´ 5 units of product for a total of 2,500.Of the 2,500 total units,2,000 are units of Product A and 500 are units of Product B.The projected information on these two products for the coming year is presented below:
Total fixed costs for the company are projected at $10,000.B.The total contribution margin for one unit of sales mix would be $20.This consists of $16 of contribution margin from the 4 units of Product A and $4 of contribution margin from 1 unit of Product
Refer to Bridges Corporation.Compute Bridges Corporation's projected break-even point in total units.
The company anticipates a sales mix consisting of 4 units of Product A and 1 unit of Product
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Essay
Q 118Q 118
Bridges Corporation
Bridges Corporation manufactures and sells two products: A and B.
B.The projected information on these two products for the coming year is presented below:
Total fixed costs for the company are projected at $10,000.
Refer to Bridges Corporation.How many units would the company need to sell to produce an income before income taxes equal to 15 percent of sales?
Again,using a unit of sales mix as the unit of analysis,one unit of sales mix sells for $56.Since the contribution margin is $20 on one unit of sales mix,the CM ratio on one unit of sales mix is $20/$56 = .3571.This implies that variable costs as a percentage of sales are equal to 1 - .3571 = .6429.Income before income taxes equal to 15 percent of sales can be found by solving a formula of the following type:
Sales - VC - FC = Income before income taxes
In this particular case,we solve the following formula:
Sales - (.6429 ´ Sales)- $10,000 = (.15 ´ Sales)
Solving for Sales,we get $48,286.We can find out how many units of sales mix are required to generate sales of $48,286 by dividing $48,286 by $56 = 863.These 863 units of sales mix each contain 5 units of product,so the correct answer would be 863 ´ 5 = 4,315 units of product,3,452 of Product A and 863 of Product
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Essay
Q 119Q 119
Whitmore Corporation
Whitmore Corporation predicts it will produce and sell 40,000 units of its sole product in the current year.At that level of volume,it projects a sales price of $30 per unit,a contribution margin ratio of 40 percent,and fixed costs of $5 per unit.
Refer to Whitmore Corporation.What is the company's projected breakeven point in dollars and units?
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Q 120Q 120
Whitmore Corporation
Whitmore Corporation predicts it will produce and sell 40,000 units of its sole product in the current year.At that level of volume,it projects a sales price of $30 per unit,a contribution margin ratio of 40 percent,and fixed costs of $5 per unit.
Refer to Whitmore Corporation.What would the company's projected profit be if it produced and sold 30,000 units?
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Q 121Q 121
Castle Corporation
The following questions are based on the following data pertaining to two types of products manufactured by Castle Corporation:
Fixed costs total $300,000 annually.The expected mix in units is 60 percent for Product Y and 40 percent for Product Z.
Refer to Castle Corporation.How much is Castle's break-even point sales in units?
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Q 122Q 122
Castle Corporation
The following questions are based on the following data pertaining to two types of products manufactured by Castle Corporation:
Fixed costs total $300,000 annually.The expected mix in units is 60 percent for Product Y and 40 percent for Product Z.
Refer to Castle Corporation.What is Castle's break-even point in sales dollars?
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