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Exam 19: Cost-Volume-Profit Analysis

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Question 41

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The manufacturing cost of Carrie Industries for the first three months of the year are provided below: ​ Using the high-low method,determine the (a)variable cost per unit,and (b)the total fixed cost.

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(a)($115,500 - $79,5...

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Question 42

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For the coming year,River Company estimates fixed costs at $109,000,the unit variable cost at $21,and the unit selling price at $85.Determine (a)the break-even point in units of sales,(b)the unit sales required to realize operating income of $150,000 and (c)the probable operating income if sales total $500,000. ​ Round units to the nearest whole number and percentage to one decimal place.

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Question 43

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Companies with large amounts of fixed costs will generally have a high operating leverage.

Which of the following conditions would cause the break-even point to increase?

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 25%.

The Rocky Company reports the following data: ​ ​ Rocky Company's operating leverage is

Beemer's sales are $400,000,variable costs are 75% of sales,and operating income is $50,000.The operating leverage is

Trail Bikes,Inc.sells three Deluxe bikes for every seven Standard bikes.The Deluxe bike sells for $1,800 and has variable costs of $1,200.The Standard bike sells for $600 and has variable costs of $200. Required (a)If Trail Bikes has fixed costs that total $1,702,000,how many bikes must be sold in order for the company to break even? (b)How many of these bikes will be Deluxe bikes and how many will be the Standard bikes?

If sales are $820,000,variable costs are 55% of sales,and operating income is $260,000,what is the contribution margin ratio?

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000,the margin of safety is 45.8%.

For the past year,Iris Company had fixed costs of $6,708,000,a unit variable cost of $444,and a unit selling price of $600.For the coming year,no changes are expected in revenues and costs,except that a new wage contract will increase variable costs by $6 per unit.Determine the break-even sales (units)for (a)the past year and (b)the coming year.

Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.

If employees accept a wage contract that decreases the unit contribution margin,the break-even point will decrease.

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

What was Rusty Co.'s weighted average unit contribution margin?

With the aid of computer software,managers can vary assumptions regarding selling prices,costs,and volume,and can immediately see the effects of each change on the break-even point and profit.This is called

If fixed costs are $300,000,the unit selling price is $31,and the unit variable costs are $22,what is the break-even sales (units) if fixed costs are reduced by $30,000?

Cost-volume-profit analysis can be presented in both equation form and graphic form.

If fixed costs are $250,000,the unit selling price is $125,and the unit variable costs are $73,what is the break-even sales (units) ?

Forde Co.has an operating leverage of 4.Sales are expected to increase by 12% next year.Operating income is