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COST-VOLUME-PROFIT ANALYSIS mcq homework

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Question;31. Cost-volume-profit;analysis is the study of the effects of;a. changes;in costs and volume on a company?s profit.;b. cost, volume, and profit on the cash budget.;c. cost, volume, and profit on various ratios.;d. changes in costs and;volume on a company?s profitability ratios.;32. The CVP income statementclassifies;costs;a. as;variable or fixed and computes contribution;margin.;b. by function and computes a;contribution margin.;c. as;variable or fixed and computes gross margin.;d. by function and computes a gross;margin.;33. Contribution marginis the;amount of revenue remaining after deducting;a. cost;of goods sold.;b. fixed;costs.;c. variable;costs.;d. contra-revenue.;34. Moonwalker?s CVP income statement included;sales of 4,000 units, a selling price of $100, variable expenses of $60 per;unit, and fixed expenses of $88,000. Contribution margin is;a. $400,000.;b. $240,000.;c. $160,000.;d. $72,000.;35. Moonwalker?s CVP income statement included;sales of 4,000 units, a selling price of $100, variable expenses of $60 per;unit, and fixed expenses of $88,000. Net income is;a. $400,000.;b. $160,000.;c. $152,000.;d. $72,000.;36. For Buffalo Co., at a sales level of 5,000;units, sales is $75,000, variable expenses total $50,000, and fixed expenses;are $21,000. What is the contribution margin per unit?;a. $4.20;b. $5.00;c. $10.00;d. $15.00;37. If contribution margin is $120,000, sales;is $300,000, and net income is $40,000, then variable and fixed expenses are;Variable Fixed;a. $180,000 $260,000;b. $180,000 $80,000;c. $80,000 $180,000;d. $420,000 $260,000;38. In a CVP income statement, cost of goods;sold is generally;a. completely;a variable cost.;b. completely;a fixed cost.;c. neither;a variable cost nor a fixed cost.;d. partly;a variable cost and partly a fixed cost.;39. In a CVP income statement, a selling expense;is generally;a. completely;a variable cost.;b. completely;a fixed cost.;c. neither;a variable cost nor a fixed cost.;d. partly;a variable cost and partly a fixed cost.;40. Hinge Manufacturing?s cost of goods sold is;$420,000 variable and $240,000 fixed. The company?s selling and administrative;expenses are $300,000 variable and $360,000 fixed. If the company?s sales is;$1,480,000, what is its contribution margin?;a. $160,000;b. $760,000;c. $820,000;d. $880,000;41. Hinge Manufacturing?s cost of goods sold is;$420,000 variable and $240,000 fixed. The company?s selling and administrative;expenses are $300,000 variable and $360,000 fixed. If the company?s sales is;$1,480,000, what is its net income?;a. $160,000;b. $760,000;c. $820,000;d. $880,000;42. Woolford?s CVP income statement included;sales of 4,000 units, a selling price of $50, variable expenses of $30 per;unit, and net income of $25,000. Fixed expenses are;a. $55,000.;b. $80,000.;c. $120,000.;d. $200,000.;43. The contribution margin ratio is;a. sales;divided by contribution margin.;b. sales;divided by fixed expenses.;c. sales;divided by variable expenses.;d. contribution;margin divided by sales.;44. For Pierce Company, sales is $500,000, variable;expenses are $330,000, and fixed expenses are $140,000. Pierce?s contribution;margin ratio is;a. 10%.;b. 28%.;c. 34%.;d. 66%.;45. For Sanborn Co., sales is $1,000,000, fixed;expenses are $300,000, and the contribution margin per unit is $48. What is the;break-even point?;a. $2,083,334;sales dollars;b. $625,000;sales dollars;c. 20,834;units;d. 6,250;units;46. For Franklin, Inc., sales is $1,500,000;fixed expenses are $450,000, and the contribution margin ratio is 36%. What is;net income?;a. $90,000;b. $162,000;c. $378,000;d. $540,000;47. For Franklin, Inc., sales is $1,500,000;fixed expenses are $450,000, and the contribution margin ratio is 36%. What are;the total variable expenses?;a. $288,000;b. $540,000;c. $960,000;d. $1,500,000;48. In 2013, Teller Company sold 3,000 units at;$400 each. Variable expenses were $280 per unit, and fixed expenses were $160,000.;What was Teller?s 2013 net income?;a. $200,000;b. $360,000;c. $840,000;d. $1,200,000;49. In 2012, Teller Company sold 3,000 units at;$400 each. Variable expenses were $280 per unit, and fixed expenses were $180,000.;The same selling price, variable expenses, and fixed expenses are expected for 2013.;What is Teller?s break-even point in sales dollars for 2013?;a. $600,000;b. $1,800,000;c. $1,200,000;d. $1,714,286;50. In 2012, Teller Company sold 3,000 units at;$400 each. Variable expenses were $280 per unit, and fixed expenses were $180,000.;The same selling price, variable expenses, and fixed expenses are expected for 2013.;What is Teller?s break-even point in units for 2013?;a. 1,500;b. 3,375;c. 4,500;d. 7,500;51. The required sales in units to achieve a;target net income is;a. (sales;+ target net income) divided by contribution margin per unit.;b. (sales;+ target net income) divided by contribution margin ratio.;c. (fixed;cost + target net income) divided by contribution margin per unit.;d. (fixed;cost + target net income) divided by contribution margin ratio.;52. For Wickham Co., sales is $2,000,000, fixed;expenses are $600,000, and the contribution margin ratio is 36%. What is;required sales in dollars to earn a target net income of $400,000?;a. $1,111,111;b. $1,666,666;c. $2,777,778;d. $5,555,556;53. Warner Manufacturing reported sales of;$2,000,000 last year (100,000 units at $20 each), when the break-even point was;75,000 units. Warner?s margin of safety ratio is;a. 25%.;b. 33%.;c. 75%.;d. 125%.;54. For Wilder Corporation, sales is $1,200,000;(6,000 units), fixed expenses are $360,000, and the contribution margin per;unit is $80. What is the margin of safety in dollars?;a. $60,000;b. $300,000;c. $540,000;d. $840,000;55. Margin of safety in dollars is;a. expected;sales divided by break-even sales.;b. expected;sales less break-even sales.;c. actual;sales less expected sales.;d. expected;sales less actual sales.;56. The margin of safety ratio is;a. expected;sales divided by break-even sales.;b. expected;sales less break-even sales.;c. margin;of safety in dollars divided by expected sales.;d. margin;of safety in dollars divided by break-even sales.;57. In 2012, Hagar Corp. sold 3,000 units at;$500 each. Variable expenses were $350 per unit, and fixed expenses were $455,000.;The same variable expenses per unit and fixed expenses are expected for 2013.;If Hagar cuts selling price by 4%, what is Hagar?s break-even point in units;for 2013?;a. 3,033;b. 3,159;c. 3,360;d. 3,500;58. In 2012, Carow sold 3,000 units at $500;each. Variable expenses were $250 per unit, and fixed expenses were $250,000. The;same selling price is expected for 2013. Carow is tentatively planning to;invest in equipment that would increase fixed costs by 20%, while decreasing;variable costs per unit by 20%. What is Carow?s break-even point in units for 2013?;a. 1,000;b. 1,200;c. 1,250;d. 1,500;Ans: a, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3;AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Risk;Analysis, AICPA PC: Problem Solving/Decision Making, IMA: Business Economics;59. In 2012, Raleigh sold 1,000 units at $500;each, and earned net income of $50,000. Variable expenses were $300 per unit;and fixed expenses were $150,000. The same selling price is expected for 2013. Raleigh?s;variable cost per unit will rise by 10% in 2013 due to increasing material;costs, so they are tentatively planning to cut fixed costs by $15,000. How many;units must Raleigh sell in 2013 to maintain the same income level as 2012?;a. 794;b. 971;c. 1,176;d. 1,088;60. Sales mixis;a. the;relative percentage in which a company sells its multiple products.;b. the;trend of sales over recent periods.;c. the;mix of variable and fixed expenses in relation to sales.;d. a;measure of leverage used by the company.;61. In;a sales mix situation, at any level of units sold, net income will be higher if;a. more;higher contribution margin units are sold than lower contribution margin units.;b. more;lower contribution margin units are sold than higher contribution margin units.;c. more;fixed expenses are incurred.;d. weighted-average;unit contribution margin decreases.;62. Ramirez;Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip);and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of $60 and a selling;price of $100. Q-Chip Plus has variable costs per unit of $70 and a selling;price of $130. The weighted-average unit contribution margin for Ramirez is;a. $46.;b. $50.;c. $54.;d. $100.;63. Capitol Manufacturing sells 3,000 units of;Product A annually, and 7,000 units of Product B annually. The sales mix for;Product A is;a. 30%.;b. 43%.;c. 70%.;d. Cannot;determine from information given.;64. Ramirez Corporation sells two types of;computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has;variable costs per unit of $60 and a selling price of $100. Q-Chip Plus has;variable costs per unit of $70 and a selling price of $130. Ramirez?s fixed;costs are $540,000. How many units of Q-Chip would be sold at the break-even;point?;a. 3,000;b. 3,522;c. 5,000;d. 7,000;65. Roosevelt;Corporation has a weighted-average unit contribution margin of $40 for its two;products, Standard and Supreme. Expected sales for Roosevelt are 40,000;Standard and 60,000 Supreme. Fixed expenses are $1,800,000. How many Standards;would Roosevelt sell at the break-even point?;a. 18,000;b. 27,000;c. 30,000;d. 45,000;66. Roosevelt;Corporation has a weighted-average unit contribution margin of $40 for its two;products, Standard and Supreme. Expected sales for Roosevelt are 40,000;Standard and 60,000 Supreme. Fixed expenses are $1,800,000. At the expected;sales level, Roosevelt?s net income will be;a. $(200,000).;b. $;- 0 -.;c. $2,200,000.;d. $4,000,000.;67. Swanson Company has two divisions, Sporting Goods and Sports Gear.;The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs;$4,440,000 in fixed costs. The contribution margin ratio for Sporting Goods is;30%, while for Sports Gear it is 50%.The weighted-average contribution margin;ratio is;a. 37%.;b. 40%.;c. 43%.;d. 50%.;68. Swanson Company has two divisions, Sporting Goods and Sports Gear.;The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs;$4,440,000 in fixed costs. The contribution margin ratio for Sporting Goods is;30%, while for Sports Gear it is 50%.The break-even point in dollars is;a. $1,642,800.;b. $10,325,582.;c. $11,100,000.;d. $12,000,000.;69. Swanson;Company has two divisions, Sporting Goods and Sports Gear. The sales mix is 65%;for Sporting Goods and 35% for Sports Gear. Swanson incurs $4,440,000 in fixed;costs. The contribution margin ratio for Sporting Goods is 30%, while for;Sports Gear it is 50%.What will sales be for the Sporting Goods Division;at the break-even point?;a. $3,600,000;b. $4,200,000;c. $6,711,628;d. $7,800,000;70. Swanson Company has two divisions, Sporting Goods and Sports Gear.;The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs;$4,440,000 in fixed costs. The contribution margin ratio for Sporting Goods is;30%, while for Sports Gear it is 50%.What will be the total contribution margin;at the break-even point?;a. $3,820,466;b. $4,440,000;c. $4,480,000;d. $5,160,000

 

Paper#41740 | Written in 18-Jul-2015

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