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Exam 5: Cost-Volume-Profit Relationships

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Question 91

Multiple Choice

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A manufacturer of cedar shingles has supplied the following data: -The company's contribution margin ratio is closest to:

A) 72.6%
B) 65.7%
C) 34.3%
D) 27.4%

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

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Question 92

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Two companies with the same margin of safety in dollars will also have the same total contribution margin.

A) True
B) False

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Question 93

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In July,Meers Corporation sold 3,700 units of its only product.Its total sales were $107,300,its total variable expenses were $66,600,and its total fixed expenses were $34,800. Required: a.Construct the company's contribution format income statement for July. b.Redo the company's contribution format income statement assuming that the company sells 3,400 units.

Golebiewski Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -The margin of safety in dollars is closest to:

Keomuangtai Corporation produces and sells a single product. The company has provided its contribution format income statement for October. -If the company sells 4,200 units,its net operating income should be closest to:

If the variable expense per unit decreases,and all other factors remain the same,the contribution margin ratio will increase.

Warrix Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. If sales increase to 3,020 units,the increase in net operating income would be closest to:

Cubie Corporation has provided the following data concerning its only product: What is the margin of safety in dollars?

Highjinks, Inc., has provided the following budgeted data: -What is the margin of safety in dollars?

Lister Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If sales decline to 2,900 units,the net operating income would be closest to:

The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin.

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:

A $2.00 increase in a product's variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:

Data concerning Strite Corporation's single product appear below: -Assume the company's target profit is $8,000.The dollar sales to attain that target profit is closest to:

Fawn Company's margin of safety is $90,000.If the company's sales drop by $80,000,it will still have positive net operating income.

Remmel Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. -If sales increase to 6,020 units,the increase in net operating income would be closest to:

Highjinks, Inc., has provided the following budgeted data: -The margin of safety as a percentage of sales is closest to:

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

Data concerning Kardas Corporation's single product appear below: The company is currently selling 8,000 units per month.Fixed expenses are $719,000 per month.The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?

Wimpy Inc.produces and sells a single product.The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit.The fixed expense is $366,915 per month. The break-even in monthly dollar sales is closest to: