Question Gilberto Mutya Cherry FInal Answer

Statement I: Assuming that the unit sales

are unchanged, the total contribution margin
will decrease if the variable expense per unit
increases. (T)

Statement II: If company A has a higher

degree of operating leverage than company
B, then company A's profits are more
sensitive to percentage changes in sales. (T)
1
Group of answer choices

Both Statements are True

Only Statement I is True

Both Statements are False

Only Statement II is True Both Statements are True

Statement I: An assumption made in most
cost-volume-profit calculations: Selling
price, variable expense per unit, and fixed
expense per unit do not change throughout
the relevant range.

Statement II: The degree of operating

leverage is greatest at sales levels near the
break-even point and decreases as sales
2 rise.

Both Statements are False

Only Statement I is True

Only Statement II is True

Both Statements are True Both Statements are False

3 Only Statement I is True

A 15% increase in production volume will
result in a
Group of answer choices

15% increase in total mixed costs.

4 15% increase in total variable costs.

15% increase in total manufacturing costs.

15% increase in total variable costs.
15% increase in the variable cost per unit.
Statement I: At the break-even point,
variable expenses and fixed expenses are
equal. (T)

Statement II: All other things equal, the

margin of safety in a company with high
fixed costs and low variable costs will tend to
be higher than the margin of safety in a
similar company that has low fixed costs and
high variable costs. (F)
5
Group of answer choices

Both Statements are True

Only Statement II is True

Only Statement I is True

Both Statements are False Only Statement I is True

Which of the following would not affect the
break-even point?
Group of answer choices

total fixed expenses

6 selling price per unit

number of units sold

variable expense per unit number of units sold

Which of the following would usually be
considered a committed fixed cost for a retail
sales corporation?
Group of answer choices

The cost of running an annual leadership

seminar for managers.

7 The lease payments made on its store

buildings

The cost of the Caribbean trip given to the

employee of the year

The lease payments made on its store

buildings and the cost of running an annual The lease payments made
leadership seminar for managers on its store buildings
RVR Company has a single product and
currently has a degree of operating leverage
of 5. Which of the following will increase the
degree of operating leverage?
Group of answer choices

Increase in Variable Expenses: Yes

Increase in Fixed Expenses: No
8 Increase in Variable Expenses: Yes
No; No

Increase in Fixed Expenses: Yes

Increase in Variable Expenses: No

Increase in Fixed Expenses: Yes
Increase in Variable
Increase in Variable Expenses: No Expenses: Yes Increase in
Increase in Fixed Expenses: No Fixed Expenses: Yes
For the past 8 months, DLSU Inc has
experienced a steady increase in its cost per
unit even though total costs have remained
stable. This cost per unit increase may be
due to ______________ costs because the
level of activity at the firm is
______________ .
Group of answer choices
9
variable, decreasing

variable, increasing

fixed, increasing

fixed, decreasing fixed, decreasing fixed, decreasing

 Question Gilberto Mutya Cherry FInal Answer
Statement I: All other things the same, in
periods of increasing sales, net operating
income will tend to increase more rapidly in
a company with high variable costs and low
fixed costs than in a company with high fixed
costs and low variable costs. (F)

Statement II: All other things the same, a

decrease in variable expense per unit will
reduce the break-even point. (T)
10
Group of answer choices

Only Statement II is True

Both Statements are False

Only Statement I is True

Both Statements are True Only Statement II is True

Statement I: On a cost-volume-profit graph,
the revenue line will be shown above the
total expense line for any activity level above
the break-even point.

Statement II: The contribution margin ratio

measures the effect on the total contribution
margin of a given change in total sales.

11 Group of answer choices

both are true

Only Statement I is True

Only Statement II is True

Both Statements are False

Both Statements are True Only Statement II is True

Statement I: On a cost-volume-profit graph,
the break-even point is located where the
total revenue line intersects the volume axis.
(F)
Statement II: The contribution margin ratio
increases as the number of units sold
increases. (T)

12 Group of answer choices

Both Statements are False

Only Statement II is True

Only Statement I is True

Only Statement II is True
Statement I: If the sales mix changes, the
average contribution margin ratio is likely to
change as well.

Statement II: Once the break-even point is

reached net operating income will increase
by the unit contribution margin for each
additional item sold. (T)

13 Group of answer choices

Only Statement II is True

Both Statements are True

Both Statements are False

Only Statement I is True Both Statements are True

Statement I: The profit in cost-volume-profit
equations is the same as the net operating
income on a contribution income statement.

Statement II: As total sales increase beyond

the break-even point, the degree of
operating leverage will also increase.

14 Group of answer choices

Both Statements are True

Both Statements are False

Only Statement I is True

Only Statement II is True Both Statements are True

Which of the following would a
manufacturing company expect to
experience as it automates and shifts from
variable expenses to fixed expenses?
Group of answer choices

A lower margin of safety percentage and a

15 higher contribution margin ratio

A lower margin of safety percentage

A higher contribution margin ratio

A lower margin of safety
A steeper total expenses line on its cost- percentage and a higher
volume-profit graph contribution margin ratio
In the middle of the year, the price of Luvdisc
Corporation's major raw material increased
by 8%. How would this increase affect the
company's break-even point (BEP) and
margin of safety (MoS)?
Group of answer choices

116 BEP: Decrease; MoS: Decrease

BEP: Decrease; MoS: Increase

BEP: Increase; MoS: Decrease

BEP: Increase; MoS:
BEP: Increase; MoS: Increase Decrease
Lopunny Shoe Company is a single-product
firm. Lopunny is predicting that a price
increase next year will NOT cause unit sales
to decrease. What effect would this price
increase have on the Contribution Margin
Ratio (CMR) and Break-even Point (BEP) for
next year?
Group of answer choices
17
CMR: Increase; BEP: No effect

CMR: Decrease; BEP: No effect

CMR: Decrease; BEP: Increase

CMR: Increase; BEP: Decrease CMR: Increase; BEP: Decrease

 Question Gilberto Mutya Cherry FInal Answer
Which of the following would usually be
considered a DISCRETIONARY FIXED cost
for a financial planning company?
Group of answer choices

The cost of the annual employees picnic

and the cost of internships for selected
college seniors
18
The cost of internships for selected
college seniors

Property taxes on its corporate office

building

The cost of the annual employees picnic

When the activity level is expected to
DECLINE within the relevant range, what
effects would be anticipated with respect to
Unit Fixed Cost (UFC) and Unit Variable
Cost (UVC)?
Group of answer choices

19 UFC: No change; UVC: No change

UFC: Increase; UVC: No change

UFC: Increase; UVC: Increase

UFC: No change; UVC: Increase UFC: Increase; UVC: No change

Oshawatt Lighting Company has a normal range of production volumes between 100,000 units and 180,000 units per month. That is considered the relevant range for production cost analysis. If the company expands significantly beyond 180,000 units per month, which of the following would be the most likely expectation?
Group of answer choices

The fixed costs and the variable cost per unit will not change
Both the fixed costs
20 Both the fixed costs and the variable cost per unit may change and the variable cost

The fixed costs may change, but the variable cost per unit will remain the same

The fixed costs will remain the same, but the variable cost per unit may change.
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer
Question Gilberto Mutya Cherry FInal Answer