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Exam 5: Cost-Volume-Profit Relationships

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Question 151

Multiple Choice

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Ploeger Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The break-even point in dollar sales is closest to:

A) $234,000
B) $237,900
C) $156,000
D) $0

E) B) and C)
F) B) and D)

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Question 152

Multiple Choice

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A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

A) 55.68
B) 3.65
C) 7.73
D) 12.76

E) None of the above
F) A) and B)

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Question 153

Multiple Choice

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Speckman Enterprises, Incorporated, produces and sells a single product whose selling price is $200.00 per unit and whose variable expense is $68.00 per unit. The company's monthly fixed expense is $514,800.Assume the company's target profit is $12,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.)

The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below: Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:

Kelsay Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The contribution margin per unit is closest to:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 2,200 units is closest to: (Round your intermediate calculations to 2 decimal places.)

Maziarz Corporation produces and sells a single product. Data concerning that product appear below: Assume the company's target profit is $14,000. The unit sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.)

Huitron Incorporated expects its sales in September to be $143,000. The company's contribution margin ratio is 65% and its fixed monthly expenses are $62,000.Required:Estimate the company's net operating income for September, assuming that the fixed monthly expenses do not change.

Thornbrough Corporation produces and sells a single product with the following characteristics: The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.The marketing manager believes that a $28,000 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 5,300 units is closest to: (Round your intermediate calculations to 2 decimal places.)

Naumann Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $234,000 per month. The company is currently selling 4,000 units per month.Required:Management is considering using a new component that would increase the unit variable cost by $7. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected?

Kelchner Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The contribution margin ratio is closest to:

Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80. The company's monthly fixed expense is $396,480 per month. The unit sales to attain the company's monthly target profit of $13,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

Shambo Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 20% increase in sales volume is closest to: (Round your intermediate calculations to 2 decimal places.)

Ingrum Corporation produces and sells two products. In the most recent month, Product R38T had sales of $20,000 and variable expenses of $7,400. Product X08S had sales of $39,000 and variable expenses of $6,170. The fixed expenses of the entire company were $41,160.If the sales mix were to shift toward Product R38T with total sales remaining constant, the overall break-even point for the entire company:

Awtis Corporation has a margin of safety percentage of 20% based on its actual sales. The break-even point is $340,000 and the variable expenses are 45% of sales. Given this information, the actual profit is:

The July contribution format income statement of Doxtater Corporation appears below: The degree of operating leverage is closest to:

Brancati Incorporated produces and sells two products. Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $32,860.Required: a. Determine the overall break-even point for the company in total sales dollars.b. If the sales mix shifts toward Product W07C with no change in total sales, what will happen to the break-even point for the company? Explain.

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is: (Round your intermediate calculations to 2 decimal places.)

How much will a company's net operating income change if it undertakes an advertising campaign given the following data: