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Exam 4: Cost-Volume-Profit Relationships

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Question 31

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The following is last month's contribution format income statement: What is the company's break-even in sales dollars?

A) $1,200,000
B) $0
C) $1,800,000
D) $1,600,000

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

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Question 32

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Starwalt Corporation produces and sells a single product. The company has provided its contribution format income statement for March. -If the company sells 7,900 units,its total contribution margin should be closest to:

A) $77,051
B) $322,200
C) $316,000
D) $308,000

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

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Question 33

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East Company has the following budgeted cost and revenue data: -To reach a target net operating income of $490,000,East Company must sell:

Data concerning Homme Corporation's single product appear below:The company is currently selling 2,000 units per month. Fixed expenses are $130,000 per month. Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Homme 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 $16.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?

The following is Allison Corporation's contribution format income statement for last month: The company has no beginning or ending inventories. The company produced and sold 10,000 units last month. -What is the company's degree of operating leverage?

Data concerning Homme Corporation's single product appear below:The company is currently selling 2,000 units per month. Fixed expenses are $130,000 per month. Consider each of the following questions independently. -This question is to be considered independently of all other questions relating to Homme Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $8,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 700 units.What should be the overall effect on the company's monthly net operating income of this change?

James Company has a margin of safety percentage of 20% based on its actual sales.The break-even point is $200,000 and the variable expenses are 45% of sales.Given this information,the actual profit is:

Longiotti Corporation produces and sells a single product.Data concerning that product appear below: Required: Determine the monthly break-even in total dollar sales.Show your work!

The following is Allison Corporation's contribution format income statement for last month: The company has no beginning or ending inventories. The company produced and sold 10,000 units last month. -What is the company's margin of safety percentage?

Brasher Company manufactures and sells a single product that has a positive contribution margin.If the selling price and variable expenses both decrease by 5% and fixed expenses do not change,then what would be the effect on the contribution margin per unit and the contribution margin ratio?

Toye Corporation has provided its contribution format income statement for March. -If the company's sales increase by 12%,its net operating income should increase by about:

Perona Corporation produces and sells a single product.Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $9,000 is closest to:

The following is Allison Corporation's contribution format income statement for last month: The company has no beginning or ending inventories. The company produced and sold 10,000 units last month. -If sales increase by 200 units,by how much should net operating income increase?

Sinclair Company's single product has a selling price of $25 per unit.Last year the company reported a profit of $20,000 and variable expenses totaling $180,000.The product has a 40% contribution margin ratio.Because of competition,Sinclair Company will be forced in the current year to reduce its selling price by $2 per unit.How many units must be sold in the current year to earn the same profit as was earned last year?

Drake Company's contribution format income statement for the most recent year appears below: -The unit contribution margin is:

The following data were supplied by Reader Corporation: -The break-even point in sales dollars is:

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

Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000.Assuming that the fixed monthly expenses do not change,what is the best estimate of the company's net operating income in a month when sales are $112,000?

The impact on net operating income of a given dollar change in sales can be computed by applying the contribution margin ratio to the dollar change in sales.

The contribution margin ratio is 25% for Grain Company and the break-even point in sales is $200,000.To obtain a target net operating income of $60,000,sales would have to be: