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Exam 21: Cost-Volume-Profit Analysis

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Question 61

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As the volume increases,fixed cost per unit of output remains constant.

A) True
B) False

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Question 62

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A graphic depiction of the break-even point is known as a cost-volume-profit (CVP)chart.

A) True
B) False

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Question 63

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Total variable costs change in proportion to changes in volume of activity.

The least-squares regression method is:

Curvilinear costs increase as volume of activity increases,but at a nonconstant rate.

The contribution margin ratio is the percent of each sales dollar that remains after deducting the total unit variable cost.

McCoy Brothers manufactures and sells two products,A and Z in the ratio of 5:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the number of units of Product A McCoy must sell to break even.

Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $300 and has a unit contribution margin of $105;the Adult model sells for $850 and has a unit contribution margin of $450;and the Recreational model sells for $1,000 and has a unit contribution margin of $500.The company's sales mix includes: 5 Youth models;9 Adult models;and 6 Recreational models.If the firm's annual fixed costs total $6,500,000,calculate the firm's break-even point in sales dollars.

A product sells for $30 per unit and has variable costs of $18 per unit.The fixed costs are $720,000.If the variable costs per unit were to decrease to $15 per unit,fixed costs increase to $900,000,and the selling price does not change,break-even point in units would:

To calculate the break-even point in units,one must know unit fixed cost,unit variable cost,and sales price.

Which of the following costs are most likely to be classified as fixed?

The following information is available for a company's utility cost for operating its machines over the last four months. Using the high-low method,the estimated variable cost per unit for utilities is:

Watson Company has monthly fixed costs of $83,000 and a 40% contribution margin ratio.If the company has set a target monthly income of $15,000,what dollar amount of sales must be made to produce the target income?

A cost-volume-profit chart is also known as a(n)

Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Flannigan Company management targets an annual pre-tax income of $1,125,000.Compute the unit sales to earn the target pre-tax net income.

The Goldfarb Company manufactures and sells toasters.Each toaster sells for $23.75 and the variable cost per unit is $16.25.Goldfarb's total fixed costs are $25,000,and budgeted sales are 8,000 units.What is the contribution margin per unit?

The relevant range of operations includes extremely high and low levels of production that are unlikely to occur.

The difference between sales price per unit and variable cost per unit is the:

A statistical method for identifying cost behavior is the:

When using the high-low method for estimating cost behavior,the slope,or variable cost per unit,is calculated by ___________________________________.