Baines Brothers manufactures and sells two products, A and Z in the ratio of 4:2. 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 Baines must sell to break even.
At Flint Company’s break-even point of 9,000 units, fixed costs are $180,000 and variable costs are $540,000 in total. The unit sales price is:
Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute break-even point in dollars with the purchase of the new machine.
The least-squares regression method is:
The only identify cost estimation method allowed by GAAP.
A statistical method to identify cost behavior.
A cost estimation method that only uses the two extreme values.
A graphical method to identify cost behavior.
An algebraic method to identify cost behavior.
In Davis Corporation’s most recent fiscal year, the company reported pretax earnings of $215,000.
Fixed costs totaled $325,800, the unit selling price of the firm’s only product was $60, and the variable costs per unit were 40% of the selling price. Based on this information, the firm’s break-even point in units was:
The budgeted income statement presented below is for Griffith Corporation for the coming fiscal year. If Griffith Corporation’s income tax rate is 40%, compute the number of units that must be sold in order to achieve a target pretax income of $130,000. (Do not round intermediate calculations.)
direct materials $270,000
direct labor 240,000
fixed factory overhead 100,000
variable factory overhead 150,000
fixed marketing costs 110,000
variable marketing costs 50,000 920,000
Pretaxt income $80,000
A statistical method for deriving an estimated line of cost behavior is the:
Least-squares regression method.
Scatter diagram method.
CVP charting method.
A cost-volume-profit chart is also known as a(n)
Margin of safety chart.
Operating leverage chart.
Operating profit chart.
Dunkin Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Dunkin company management targets an annual after-tax income of $843,750. The company is subject to a 25% income tax rate. Compute the dollar sales to earn the target after-tax net income.
Baines Brothers manufactures and sells two products, A and Z in the ratio of 4:2. 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 contribution margin per composite unit.
A firm sells two products, A and B. For every unit of A the firm sells, two units of B are sold. The firm’s total fixed costs are $1,612,000. Selling prices and cost information for both products follow. What is the firm’s break-even point in units of A and B?
31,000 of A and 62,000 of B.
31,000 of A and 31,000 of B.
10,333 of A and 20,667 of B.
62,000 of A and 31,000 of B.
36,167 of A and 72,333 of B.
In cost-volume-profit analysis, the unit contribution margin is:
Sales price per unit less cost of goods sold per unit.
Sales price per unit less total variable cost per unit.
Sales price per unit less unit total cost per unit.
The same as the contribution margin ratio.
Sales price per unit less unit fixed cost per unit.
Ginger Company’s product has a contribution margin per unit of $11.25 and a contribution margin ratio of 22.5%. What is the selling price of the product?
The budgeted income statement presented below is for Griffith Corporation for the coming fiscal year. If Griffith Corporation is able to achieve the budgeted level of sales, its margin of safety in dollars would be (Do not round intermediate calculations):
A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. What is the break-even point in dollar sales?
Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are:
Unit sales price $7 $4 $6
unit variable costs $3 $2 $3
Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is (round to the nearest thousand):
Select cost information for Winfrey Enterprises is as follows:
Based on this information:
Both direct materials and rent expense are variable costs.
Utilities expense is a mixed cost and rent expense is a variable cost.
Utilities expense is a mixed cost and rent expense is a fixed cost.
Direct materials is a fixed cost and utilities expense is a mixed cost.
Both direct materials and utilities expense are mixed costs.
If a firm’s forecasted sales are $250,000 and its break-even sales are $190,000, the margin of safety in dollars is:
Wayward 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 line on a scatter diagram that is intended to reflect the past relation between cost and volume is the:
Standard cost line.
Estimated line of cost behavior.
Margin of safety line.
Contribution margin line.
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