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Exam 6: Cost-Volume-Profit Relationships

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Question 71

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Mcconkey Corporation produces and sells a single product.The company's contribution format income statement for July appears below: Required: Redo the company's contribution format income statement assuming that the company sells 5,800 units.

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Question 72

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To estimate what the profit will be at various levels of activity, multiply the number of units to be sold above or below the break-even point by the unit contribution margin.

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Question 73

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Product Y sells for $15 per unit, and has variable expenses of $9 per unit.Fixed expenses total $300,000 per year.How many units of Product Y must be sold each year to yield an annual profit of $90,000?

If a company increases its selling price by $2 per unit due to an increase in its variable labor cost of $2 per unit, the break-even point in units will:

Sunnripe Corporation manufactures and sells two types of beach towels, standard and deluxe.Sunnripe expects the following operating results next year: Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Ploeger 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:

Flesch Corporation produces and sells two products.In the most recent month, Product C90B had sales of $24,000 and variable expenses of $6,480.Product Y45E had sales of $29,000 and variable expenses of $11,010.The fixed expenses of the entire company were $32,280.If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:

The margin of safety as a percentage of sales is closest to:

Data concerning Milian Corporation's single product appear below: Fixed expenses are $66,000 per month.The company is currently selling 1,000 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $15.Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 200 units.What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? Show your work!

The selling price of Old Corporation's only product is $180.00 per unit and its variable expense is $37.80 per unit.The company's monthly fixed expense is $483,480. Required: Assume the company's monthly target profit is $56,880.Determine the unit sales to attain that target profit.Show your work!

Awtis Corporation has a margin of safety percentage of 20% based on its actual sales.The break-even point is $500,000 and the variable expenses are 60% of sales.Given this information, the actual profit is:

Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 20% increase in sales is closest to:

Shelhorse Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $275,000 per month.The company is currently selling 4,000 units per month. Required: The marketing manager believes that a $13,000 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? Show your work!

Yamakawa Corporation produces and sells a single product.Data concerning that product appear below: Required: Determine the monthly break-even in unit sales.Show your work!

Bussy Corporation produces and sells a single product whose contribution margin ratio is 54%.The company's monthly fixed expense is $561,600 and the company's monthly target profit is $34,560. Required: Determine the dollar sales to attain the company's target profit.Show your work!

The company's break-even in unit sales is closest to:

Corporation X sold 25,000 units of product last year.The contribution margin per unit was $2, and fixed expenses totaled $40,000 for the year.This year fixed expenses are expected to increase to $45,000, but the contribution margin per unit will remain unchanged at $2.How many units must be sold this year to earn the same net operating income as was earned last year:

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

The company's contribution margin ratio is closest to:

What is the margin of safety in dollars?