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Exam 4: Cost-Volume-Profit Relationships

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Question 71

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Jatry Corporation's budgeted sales are $300,000,its budgeted variable expenses are $210,000,and its budgeted fixed expenses are $60,000.The company's break-even in dollar sales is:

A) $200,000
B) $330,000
C) $210,000
D) $270,000

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Question 72

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The selling price of Garey Corporation's only product is $170.00 per unit and its variable expense is $39.10 per unit.The company's monthly fixed expense is $641,410. Required: Assume the company's monthly target profit is $65,450.Determine the unit sales to attain that target profit.Show your work!

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Question 73

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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.

Kappen Corporation's contribution format income statement for October appears below: The degree of operating leverage is closest to:

The following monthly budgeted data are available for the International Company: Budgeted net operating income for the month is $220,000. Required: a.Calculate the break-even dollar sales for the month. b.Calculate the margin of safety. c.Calculate the operating leverage.

Data concerning Hillegass Corporation's single product appear below: Fixed expenses are $502,000 per month.The company is currently selling 4,000 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $18.Since the new component would improve 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 if fixed expenses are unaffected? Show your work!

Deavila Inc.produces and sells two products.Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $13,980. Required: a.Determine the overall break-even point for the company.Show your work! b.If the sales mix shifts toward Product Q91I with no change in total sales,what will happen to the break-even point for the company? Explain.

Terres Corporation produces and sells a single product.Data concerning that product appear below: The break-even in monthly dollar sales is closest to:

The following data concern two products sold by Redding Corporation. -If the sales mix shifts toward Product X,and product contribution margin ratios remain unchanged,one would expect the break-even point for the company as a whole to:

Data concerning Shanor Enterprises Corporation's single product appear below: The unit sales to attain the company's monthly target profit of $13,000 is closest to:

The January contribution format income statement of Steffel Corporation appears below: The degree of operating leverage is closest to:

On a cost-volume-profit graph,the break-even point is located:

If company A has a higher degree of operating leverage than company B,then:

Forest Corporation has prepared the following budgeted data based on a sales forecast of $3,000,000: What would be the amount of dollar sales at the break-even point?

Akerley,Inc. ,produces and sells a single product.The product sells for $140.00 per unit and its variable expense is $42.00 per unit.The company's monthly fixed expense is $393,960. Required: Determine the monthly break-even in unit sales.Show your work!

Camden Inc.produces and sells two products.During the most recent month,Product M21B's sales were $35,000 and its variable expenses were $14,350.Product Y79X's sales were $20,000 and its variable expenses were $7,650.The company's fixed expenses were $30,820. Required: a.Determine the overall break-even point for the company.Show your work! b.If the sales mix shifts toward Product M21B with no change in total sales,what will happen to the break-even point for the company? Explain.

Erdmann Corporation has provided its contribution format income statement for July.The company produces and sells a single product. -If the company sells 7,500 units,its total contribution margin should be closest to:

Tassone Corporation has provided the following data concerning its only product: The margin of safety as a percentage of sales is closest to:

Legaard Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $220,000 per month.The company is currently selling 4,000 units per month. Required: The marketing manager would like to cut the selling price by $15 and increase the advertising budget by $11,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,500 units.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Sadbury Corporation produces and sells a single product whose selling price is $210.00 per unit and whose variable expense is $73.50 per unit.The company's monthly fixed expense is $873,600. Required: a.Assume the company's monthly target profit is $27,300.Determine the unit sales to attain that target profit.Show your work! b.Assume the company's monthly target profit is $68,250.Determine the dollar sales to attain that target profit.Show your work!