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Exam 5: Cost-Volume-Profit Relationships

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Question 111

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Veren Inc.produces and sells two products.During the most recent month,Product F73A's sales were $27,000 and its variable expenses were $9,450.Product L75P's sales were $14,000 and its variable expenses were $5,310.The company's fixed expenses were $21,060. Required: a.Determine the overall break-even point for the company in total sales dollars.Show your work! b.If the sales mix shifts toward Product F73A with no change in total sales,what will happen to the break-even point for the company? Explain.

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Overall CM ratio = Total contribution m...

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Question 112

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A company makes a single product that it sells for $16 per unit.Fixed costs are $76,800 per month and the product has a contribution margin ratio of 40%.If the company's actual sales are $224,000,its margin of safety is:

A) $32,000
B) $96,000
C) $128,000
D) $192,000

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

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Question 113

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Gamma Corporation has sales of $120,000,a contribution margin of $48,000,and a net operating income of $12,000.The company's degree of operating leverage is:

Newham Corporation produces and sells two products.In the most recent month,Product R10L had sales of $28,000 and variable expenses of $6,440.Product X96N had sales of $22,000 and variable expenses of $7,560.The fixed expenses of the entire company were $32,710.The break-even point for the entire company is closest to:

If sales volume increases and all other factors remain constant,then the:

Brihon Corporation produces and sells a single product.Data concerning that product appear below: Required: a.Assume the company's monthly target profit is $12,650.Determine the unit sales to attain that target profit.Show your work! b.Assume the company's monthly target profit is $63,250.Determine the dollar sales to attain that target profit.Show your work!

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Houpe Corporation.Refer to the original data when answering this question. The marketing manager believes that a $14,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?

Giannini Inc.,which produces and sells a single product,has provided the following contribution format income statement for March: Required: Redo the company's contribution format income statement assuming that the company sells 5,500 units.

Hopi Corporation expects the following operating results for next year: What is Hopi expecting total fixed expenses to be next year?

Sufra Corporation is planning to sell 100,000 units for $8.00 per unit and will break even at this level of sales.Fixed expenses will be $300,000.What are the company's variable expenses per unit?

A manufacturer of premium wire strippers has supplied the following data: -The company's unit contribution margin is closest to:

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Houpe Corporation.Refer to the original data when answering this question. Management is considering using a new component that would increase the unit variable cost by $5.Since the new component would increase the features of the company's product,the marketing manager predicts that monthly sales would increase by 300 units.What should be the overall effect on the company's monthly net operating income of this change?

Kelsay Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If the company increases its unit sales volume by 4% without increasing its fixed expenses,then total net operating income should be closest to:

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. -The break-even point for the entire company is closest to:

In a CVP graph (sometimes called a break-even chart),unit volume is represented on the horizontal (X)axis and dollars on the vertical (Y)axis.

The July contribution format income statement of Doxtater Corporation appears below: -If the company's sales increase by 19%,its net operating income should increase by about:

Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%.Assuming that the fixed monthly expenses do not change,what is the best estimate of the company's net operating income in a month when sales are $95,000?

Nussbaum Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The break-even point in dollar sales is closest to:

Kelsay Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The variable expense ratio is closest to:

A manufacturer of tiling grout has supplied the following data: -The company's break-even in unit sales is closest to: