MAS Cost-Volume-Profit Analysis

11/17/2020 Cost-Volume-Profit Analysis
Cost-Volume-Pro t Analysis
2nd Formative Assessment
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Section *
Your answer
True or False
At the break-even point, variable expenses and fixed expenses are equal. * 1 point
True
False
A contribution approach income statement can usually be easily prepared 1 point

from the information contained in a corporation's published income
statement. *
True
False
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The profit in cost-volume-profit equations is the same as the net operating 1 point
income on a contribution income statement. *
True
False
On a CVP graph for a profitable company, the line representing total 1 point
expenses is steeper than the line representing total revenue. *
True
False
On a cost-volume-profit graph, the revenue line will be shown above the 1 point
total expense line for any activity level above the break-even point. *
True
False
Short problems
If the answer is in dollars, please write your answers in this manner $100,000 or $5,287.35.There should
be no space after the dollar sign and make sure to use the appropriate commas. Provide only decimals if
the answer is not in whole numbers, otherwise, omit the decimals.
A company has provided the following data: (please see image) If the 2 points
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: (increase or decrease by?) *
Your answer
At a break-even point of 400 units sold, variable expenses were $4,000 2 points
and fixed expenses were $2,000. What will the 401st unit sold contribute
to profit? *
Your answer
Filson Inc., a company that produces and sells a single product, has 2 points
provided its contribution format income statement for February (pls see
image). If the company sells 9,700 units, its total contribution margin
should be closest to: *
Your answer
Finnefrock Inc. produces and sells a single product. The company has 2 points
provided its contribution format income statement for December (pls see
image). If the company sells 9,200 units, how much will be its net
operating income? *
Your answer
Last year, Black Company reported sales of $640,000, a contribution 2 points

margin of $160,000, and a net loss of $40,000. Based on this information,
the break-even point in sales dollars was: *
Your answer
The break-even point in dollar sales for Rice Company is $360,000 and 2 points
the company's contribution margin ratio is 30%. If Rice Company desires a
profit of $84,000, sales would have to total *
Your answer
North Company sells a single product. The product has a selling price of 2 points
$30 per unit and variable expenses of 70% of sales. If the company's fixed
expenses total $60,000 per year, then it will have a break-even (in sales
dollars) of: *
Your answer
Fenestre Corporation's contribution margin ratio is 25%. The company's 2 points

break-even is 80,000 units and the selling price of its only product is
$4.00 a unit. What are the company's fixed expenses? *
Your answer
Forest Corporation has prepared the following budgeted data based on a 2 points
sales forecast of $3,000,000 (pls see image): What would be the amount
of dollar sales at the break-even point? *
Your answer
Mardist Corporation has sales of $100,000, variable expenses of $75,000, 2 points

fixed expenses of $30,000, and a net loss of $5,000. How much would
Mardist have to sell to achieve a profit of 10% of sales? *
Your answer
Slosh Cleaning Corporation services both residential and commercial 2 points

customers. Slosh expects the following operating results next year for
each type of customer: (see image) Slosh expects to have $18,000 in fixed
expenses next year. What would Slosh's total dollar sales have to be next
year in order to generate a profit of $90,000? *
Your answer
Riven Corporation has a single product whose selling price is $10. At an 2 points
expected sales level of $1,000,000, the company's variable expenses are
$600,000 and its fixed expenses are $300,000. The marketing manager
has recommended that the selling price be increased by 20%, with an
expected decrease of only 10% in unit sales. What would be the
company's net operating income if the marketing manager's
recommendation is adopted? *
Your answer
Last year, variable expenses were 60% of total sales and fixed expenses 2 points
were 10% of total sales. If the company increases its selling prices by 10%,
but if fixed expenses, variable costs per unit, and unit sales remain
unchanged, the effect of the increase in selling price on the company's
total contribution margin would be an increase or decrease of what
percent? *
Your answer
Data concerning Damberger Corporation's single product appear below 2 points

(see image): The company is currently selling 5,000 units per month. Fixed
expenses are $243,000 per month. The marketing manager believes that
an $11,000 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 (increase or
decrease of how much)? *
Your answer
Vaccaro Corporation produces and sells a single product. Data concerning 2 points
that product appear below (see image): Fixed expenses are $293,000 per
month. The company is currently selling 3,000 units per month.
Management is considering using a new component that would increase
the unit variable cost by $13. Since the new component would increase the
features of the company's product, the marketing manager predicts that
monthly sales would increase by 400 units. What should be the overall
effect on the company's monthly net operating income of this change
(increase or decrease of how much)? *
Your answer
Data concerning Sa Corporation's single product appear below (see 2 points
image): Fixed expenses are $445,000 per month. The company is

currently selling 6,000 units per month. The marketing manager would like
to introduce sales commissions as an incentive for the sales staff. The
marketing manager has proposed a commission of $9 per unit. In
exchange, the sales staff would accept a decrease in their salaries of
$43,000 per month. (This is the company's savings for the entire sales
staff.) The marketing manager predicts that introducing this sales
incentive would increase monthly sales by 100 units. What should be the
overall effect on the company's monthly net operating income of this
change (increase or decrease of how much? *
Your answer
Bear Publishing sells a nature guide. The following information was 2 points
reported for a typical month (sales volume is constant each month; see
image): Bear is expecting a 20 cent increase in variable expenses. No
other changes are expected or planned. How much total contribution
margin should Bear expect after the increase? *
Your answer
The following is last month's contribution format income statement (see 2 points
image): What is the company's margin of safety in dollars? *
Your answer
Last year, Perry Company reported profits of $4,200. Its variable expenses 2 points
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: *
Your answer
image): What is the company's break-even in unit sales? *
Your answer
Lineman Corporation sells a product for $230 per unit. The product's 2 points
current sales are 23,400 units and its break-even sales are 20,124 units.
What is the margin of safety in dollars? *
Your answer
If sales increase from $80,000 per year to $120,000 per year, and if the 2 points
operating leverage is 5, then net operating income should increase by
what percent? *
Your answer
image): What is the company's degree of operating leverage? *
Your answer
The following data pertain to Wistron Company's two products (see 2 points
image): If fixed expenses for the company as a whole are $60,000 and the
product mix is constant, the overall break-even point for the company
would be: *
Your answer
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A company currently sells products Aye, Bee, and Cee in equal quantities 2 points
and at the same selling price per unit. The contribution margin ratio for
product Aye is 40%, for product Bee is 50%, and the overall contribution
margin ratio for the company is 48%. Suppose that the sales mix changes
to 40% Aye, 25% Bee, and 35% Cee, what would be the new overall
contribution margin ratio for the company? *
Your answer
The following is Addison Corporation's contribution format income 2 points

statement for last month (see image):The company has no beginning or
ending inventories. A total of 20,000 units were produced and sold last
month. How many units would the company have to sell to attain the
target profit of $150,000? *
Your answer
Comprehensive Problem
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11/17/2020 Cost-Volume-Profit Analysis

A contribution approach income statement can usually be easily prepared 1 point

Last year, Black Company reported sales of $640,000, a contribution 2 points

Fenestre Corporation's contribution margin ratio is 25%. The company's 2 points

Mardist Corporation has sales of $100,000, variable expenses of $75,000, 2 points

Slosh Cleaning Corporation services both residential and commercial 2 points

Data concerning Damberger Corporation's single product appear below 2 points

Data concerning Sa Corporation's single product appear below (see 2 points

image): Fixed expenses are $445,000 per month. The company is

The following is Addison Corporation's contribution format income 2 points

Send me a copy of my responses.

Never submit passwords through Google Forms.

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