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Exam 4: Cost-Volume-Profit Relationships

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Question 21

Multiple Choice

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McGordon Corporation has provided the following data: -The break-even point in sales dollars is:

A) $240,000
B) $560,000
C) $728,000
D) $408,000

E) All of the above
F) A) and B)

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Question 22

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Data concerning Enslow Corporation's single product appear below: The break-even in monthly unit sales is closest to:

A) 6,711
B) 4,390
C) 12,495
D) 3,249

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

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Question 23

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The following is last month's contribution format income statement: What is the company's margin of safety in dollars?

Boening Enterprises,Inc. ,produces and sells a single product whose selling price is $130.00 per unit and whose variable expense is $39.00 per unit.The company's monthly fixed expense is $509,600. -Assume the company's monthly target profit is $11,000.The unit sales to attain that target profit is closest to:

Finnefrock Inc.produces and sells a single product.The company has provided its contribution format income statement for December. If the company sells 9,200 units,its net operating income should be closest to:

Langin Corporation has provided its contribution format income statement for June. Required: a.Compute the degree of operating leverage to two decimal places. b.Using the degree of operating leverage,estimate the percentage change in net operating income that should result from a 14% increase in sales.

The April contribution format income statement of Iannacone Corporation appears below: -The degree of operating leverage is closest to:

Hinsey Corporation produces and sells a single product.Data concerning the product appear below: Fixed expenses are $300,000 per month.The company is currently selling 4,000 units per month.Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Hinsey 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 $11.Since the new component would increase the features of 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?

To obtain the break-even point in terms of dollar sales,total fixed expenses are divided by which of the following?

Furgason Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $303,000 per month.The company is currently selling 5,000 units per month. Required: The marketing manager believes that a $9,000 increase in the monthly advertising budget would result in a 120 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!

Bello Corporation produces and sells two products.In the most recent month,Product D99P had sales of $33,000 and variable expenses of $15,840.Product G71P had sales of $42,000 and variable expenses of $4,410.The fixed expenses of the entire company were $49,790. -If the sales mix were to shift toward Product D99P with total sales remaining constant,the overall break-even point for the entire company:

Edmondson Inc.produces and sells a single product.The selling price of the product is $200.00 per unit and its variable cost is $50.00 per unit.The fixed expense is $205,500 per month. -The break-even in monthly dollar sales is closest to:

Bello Corporation produces and sells two products.In the most recent month,Product D99P had sales of $33,000 and variable expenses of $15,840.Product G71P had sales of $42,000 and variable expenses of $4,410.The fixed expenses of the entire company were $49,790. -The break-even point for the entire company is closest to:

In August,Bliek Corporation sold 8,300 units of its only product.Its total sales were $664,000,its total variable expenses were $415,000,and its total fixed expenses were $204,000. Required: a.Construct the company's contribution format income statement for August in good form. b.Redo the company's contribution format income statement assuming that the company sells 8,600 units.

Sween Corporation produces and sells two products.Data concerning those products for the most recent month appear below: The fixed expenses of the entire company were $27,530.If the sales mix were to shift toward Product Z45B with total sales remaining constant,the overall break-even point for the entire company:

At a break-even point of 400 units sold,variable expenses were $4,000 and fixed expenses were $2,000.What will the 401st unit sold contribute to profit?

Doubleday Corporation produces and sells a single product.The company has provided its contribution format income statement for August. -If the company sells 3,500 units,its net operating income should be closest to:

A company has provided the following data: If the dollar contribution margin per unit is increased by 10%,total fixed cost is decreased by 20%,and all other factors remain the same,net operating income will:

Hinsey Corporation produces and sells a single product.Data concerning the product appear below: Fixed expenses are $300,000 per month.The company is currently selling 4,000 units per month.Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Hinsey Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $21,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 900 units.What should be the overall effect on the company's monthly net operating income of this change?

Last year,Perry Company reported profits of $4,200.Its variable expenses totaled $66,000 or $6 per unit.The unit contribution margin was $3.00.The break-even point in unit sales for Perry Company is: