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Exam 18: Cost-Volume-Profit Analysis

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Question 51

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If sales revenue per unit increases to $25 and 10,000 units are sold, what is the contribution margin? $\begin{array} { | l | r | } \hline \text { Total fixed costs } & \$ 15,000 \\\hline \text { Sale price per unit } & \$ 23 \\\hline \text { Variable costs per unit } & \$ 15 \\\hline\end{array}$

A) $150,000
B) $100,000
C) $1,250,000
D) $135,000

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Question 52

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An electric bill for corporate headquarters is an example of what type of cost?

A) Variable cost
B) Conversion cost
C) Fixed cost
D) Mixed cost

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Question 53

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Marino Company's average manufacturing cost was $5.40 when 50,000 units were manufactured and was $5) 25 when 80,000 units were manufactured. How much was Marino's variable cost per unit?

On a CVP graph, the increase in the operating income as the sales volume increases is equal to the additional contribution margin that is created by the sale of additional units.

Which of the following changes would normally increase the contribution margin per unit the most?

Belton Company currently sells its products for $25 per unit. Management is contemplating a 20% increase in the sales price for next year. Variable costs are currently 30% of sales revenue and are not expected to change next year. Fixed expenses are $150,000. What is the breakeven point in units at the anticipated sales price next year?

Which of the following will result in an increase in the breakeven point, a decrease in the margin of safety, and a decrease in the contribution margin per unit?

The Prentice Corporation has provided the following information pertaining to its most recent year of $\begin{array} { | l | r | } \hline \text { Margin of safety } & \$ 250,000 \\\hline \text { Contribution margin ratio } & 40 \% \\\hline \text { Fixed costs } & \$ 50,000 \\\hline\end{array}$ How much were Prentice's total sales during the most recent year?

During the most recent year, RDJ Company reported sales of $1,200,000, variable expenses of $720,000, and a margin of safety of $450,000. How much were RDJ's fixed expenses?

If total fixed costs are $95,000, contribution margin per unit is $8.00, and targeted operating income is $30,000, how many units must be sold to breakeven?

If sales revenue per unit decreases to $18 and 15,000 units are sold, what is the operating income? $\begin{array} { | l | r | } \hline \text { Total fixed costs } & \$ 15,000 \\\hline \text { Sale price per unit } & \$ 23 \\\hline \text { Variable costs per unit } & \$ 15 \\\hline\end{array}$

If the sales price per unit is $35, the unit contribution margin is $7.50, and total fixed expenses are $56,000, what is the breakeven point in units?