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Exam 21: Cost-Volume-Profit Analysis

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Question 41

Multiple Choice

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Cost behavior refers to the manner in which a cost

A) changes as the related activity changes
B) is allocated to products
C) is used in setting selling prices
D) is estimated

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

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Question 42

Multiple Choice

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When a business sells more than one product at varying selling prices, the business's break-even point can be determined as long as the number of products does not exceed

A) two
B) three
C) fifteen
D) There is no limit.

E) B) and D)
F) A) and B)

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Question 43

Multiple Choice

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Given the following cost data, what type of cost is shown?​​ ​

Which of the following costs is a mixed cost?

As production increases, the fixed cost per unit

Costs that vary in total in direct proportion to changes in an activity level are called

Roller Paint Co. reported the following data for the month of September. There were no beginning inventories and all units were completed (no work in process).​ In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80.00 per unit. (a)Prepare a variable costing income statement. (b)Prepare an absorption costing income statement. (c)Briefly explain why there is a difference in income from operations between the two methods.

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the cost-volume-profit chart.

Variable costs are costs that vary in total in direct proportion to changes in the activity level.

Use this information for Timmer Corporation to answer the questions that follow. Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 12,000 units of product and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000, and fixed selling and administrative costs were $6,000. -What would Timmer's net income be for the year using absorption costing?

Currently, the unit selling price is $50, the variable cost is $34, and the total fixed costs are $108,000. A proposal is being evaluated to increase the selling price to $54. (a)Compute the current break-even sales (units). (b)Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.

What was Carter Co.'s variable cost of E?

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

The manufacturing cost of Carrie Industries for the first three months of the year are provided below.? Using the high-low method, determine the (a) variable cost per unit and (b) the total fixed cost. If required, round answer to the nearest cent.

Klein Company reports the following data:? Sales$980,000 Variable costs500,000 Fixed costs350,000? Determine Klein Company's operating leverage. Round answer to the nearest cent.

Understanding how costs behave is useful to management for all the following reasons except

Explain how variable costing net income will be different than absorption costing net income under the following situations:? (1) A company had no beginning or ending inventory. During the year, it produced and sold 10,000 units.? (2) A company had no beginning inventory. During the year, it produced 10,000 units and sold 8,000 units.? (3) A company had 2,000 units in beginning inventory. During the year, it produced 10,000 units and sold 12,000units.

For the current year ending January 31, Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50. For the coming year, a new wage contract will increase the unit variable cost to $55.50. The selling price of $70.00 per unit is expected to remain the same. (a)Compute the break-even sales (units) for the current year. Round answer to the nearest whole number. (b)Compute the anticipated break-even sales (units) for the coming year, assuming the new wage contract is signed.

Mia Enterprises sells a product for $90 per unit. The variable cost is $40 per unit, while fixed costs are $75,000. Determine the (a) break-even point in sales units and (b) break-even point in sales units if the selling price increased to $100 per unit. If required, round answer to nearest whole number.

What was Carter Co.'s unit contribution margin of E?