Question

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

A) Gross margin

B) Contribution-margin ratio

C) Variable-cost ratio

D) Contribution margin

Answer:

Which statement is FALSE?

A) Each different sales-mix of products has a different break-even point.

B) Changes in the sales-mix of products sold affects a company's net operating profit.

C) Changes in the sales-mix of products sold affects a company's contribution margin.

D) If the sales-mix of products sold changes, the break-even point does not change.

Answer:

With mixed costs, the ________ element is unchanged over the relevant range and the ________ element varies proportionately with cost-driver activity.

A) variable cost; fixed cost

B) fixed cost; variable cost

C) fixed cost; step cost

D) step cost; variable cost

Answer:

The sales price is $30 per unit, the contribution margin is $8 per unit and total fixed costs are $32,000. What is the break-even point in units?

A) 857

B) 1,200

C) 2,000

D) 4,000

Answer:

If the selling price per unit increases, what is the effect on the break-even point? (Assume no other changes.)

A) The break-even point increases.

B) The break-even point decreases.

C) The break-even point remains the same.

D) The break-even point is zero.

Answer #1

1 | |||||||||||||||

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

2 | |||||||||||||||

is the excess of sales over the cost of goods sold is FALSE | |||||||||||||||

3 | |||||||||||||||

With mixed costs, the fixed cost element is unchanged over the relevant range and the variable cost element varies proportionately with cost-driver activity. | |||||||||||||||

4 | |||||||||||||||

Break-even point in units = 32000/8= 4000 | |||||||||||||||

5 | |||||||||||||||

If the selling price per unit increases,The break-even point decreases. | |||||||||||||||

In CVP analysis, the unit contribution margin is:
Sales price per unit less cost of goods sold per unit
Sales price per unit less FC per unit
Sales price per unit less total VC per unit
Same as the CM
Maroon Company’s CM ratio of 24%. Total FC are
$84,000. What is Maroon’s B/E point in sales dollars?
$20,160
$110,536
$240,000
$350,000
If a firm’s forecasted sales are $250,000 and its B/E sales are
$190,000, the margin of safety in dollars is:...

1. A company's contribution margin is $90 per unit at a sales
level of 5,400 units. The company's operating income is $37,000.
The company's operating leverage is closest to _____. (Round-off
the answer to one decimal place.)
a.14.9
b.13.1
c.12.4
d.14.0
2. The break-even point is:
a.the same for every company in the same industry.
b.the point where a company's profits are maximized.
c.the point where total revenue equals total cost.
d.the point where sales revenues equal variable costs.
3....

Sales Mix and Break-Even Analysis
Michael Company has fixed costs of $1,021,330. The unit selling
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Product
Selling
Price
Variable
Cost per Unit
Contribution Margin per Unit
Q
$440
$240
$200
Z
560
500
60
The sales mix for products Q and Z is 35% and 65%,
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Determine the break-even point in units of Q and
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Product
Selling Price per Unit
Variable Cost per Unit
Contribution Margin per Unit
X
$848
$318
$530
Y
645
345
300
The sales mix for Products X and Y is 60% and 40%, respectively.
Determine the break-even point in units of X and Y. Round
answers to the nearest whole number.
units...

Sales
$60,000
Less: Variable Expenses
45,000
Contribution Margin
15,000
Less: Fixed Expenses
18,000
Net Income
-$3,000
a. What are the total sales in dollars at the break-even
point?
b. What are the total variable expenses at the break-even
point?
c. What is the company's contribution margin ratio?
d. If unit sales were increased by 10% and fixed expenses were
reduced by $2,000, what would be the company's expected net income?
(Prepare a new income statement.)

The following information is available for a company’s
maintenance cost over the last seven months.
Month
Maintenance Hours
Maintenance Cost
June
9
$
4,590
July
18
7,110
August
12
5,430
September
15
6,270
October
21
7,950
November
24
8,790
December
6
3,750
Using the high-low method, estimate both the fixed and variable
components of its maintenance cost.
High-Low method - Calculation of variable cost per maintenance
hour
0
Total cost at the high
point
Variable costs at the high
point:...

Mastery Problem: CVP Analysis - Constructing a
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For planning and control purposes, managers have a powerful tool
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costs are classified according to behavior: variable or fixed,
rather than by category: product (which includes both variable and
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Mastery
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Chart
CVP Analysis
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For planning and
control purposes, managers have a powerful tool known as
cost-volume-profit (CVP) analysis. CVP analysis shows how revenues,
expenses, and profits behave as volume changes, which helps
identify problems and create solutions. In CVP analysis, costs are
classified according to behavior: variable or fixed, rather than by
category: product (which includes both variable and fixed) or
period (which includes both variable...

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Heyden Company has fixed costs of $1,263,850. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
Model 94
$440
$180
$260
Model 81
320
280
40
The sales mix for products Model 94 and Model 81 is 55% and 45%,
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Jordan Company has fixed costs of $98,260. The unit selling
price, variable cost per unit, and contribution margin per unit for
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Product
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
Model 94
$100
$60
$40
Model 81
160
140
20
The sales mix for products Model 94 and Model 81 is 70% and 30%,
respectively. Determine the break-even point in units of Model 94
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