Deck 9: Profit Planning: Cost-Volume-Profit Analysis

Question 1

The contribution income statement would require a firm to:

A)Separate fixed and variable costs.
B)Separate revenue into different categories.
C)Round off amounts to the nearest dollar.
D)Ignore some estimated fixed expenses,such as depreciation.
E)Restructure its entire accounting system.

Answer 1

A

Question 2

Which one of the following is not included as a factor in CVP analysis?

A)Fixed costs.
B)Variable costs.
C)Desired profit.
D)Price.
E)Expected production level.

Answer 2

E

Question 3

Which one of the following is defined as the ratio of the contribution margin to profit?

A)Contribution margin ratio.
B)Margin of safety ratio.
C)Operating leverage.
D)Breakeven point.
E)Margin of safety.

Answer 3

C

Question 4

Grant's Western Wear is a retailer of western hats located in Atlanta,Georgia.Although Grant's carries numerous styles of western hats,each hat has approximately the same price and invoice purchase cost,as shown below.Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts.Currently the economy of Atlanta is really humming,and sales growth at Grant's has been great.However,the business is very competitive,and Grant has relied on its knowledgeable and courteous staff to attract and retain customers,who otherwise might go to other western wear stores.Also,because of the rapid growth in sales,Grant is finding it more difficult to manage certain aspects of the business,such as restocking of inventory and hiring and training new salespeople.
The annual breakeven point in unit sales is calculated to be:

A)15,000 units.
B)14,000 units.
C)16,000 units.
D)13,000 units.
E)17,000 units.

Question 5

The breakeven point is:

A)The point at which revenues equal total cost plus a desired profit.
B)The point at which revenues equal variable cost and profit is zero.
C)The point at which revenues equal fixed cost and profit is zero.
D)The point at which revenues meet the budget target.

Question 6

CVP analysis using activity-based costs will tend to shift cost from fixed to variable classifications,resulting in:

A)Lower breakeven sales.
B)Higher breakeven sales.
C)Breakeven sales can be higher or lower,depending on batch size.
D)A higher contribution margin per unit.
E)A lower contribution margin per unit.

Question 7

Calculating the margin of safety measure will help a firm answer which of the following questions?

A)Will we break even?
B)Are we using our debt wisely?
C)How much will profits change if sales change?
D)How much profit will we earn?
E)How much revenue can we lose before we drop below the breakeven point?

Question 8

A relatively low margin of safety ratio for a product is usually an indication that the product:

A)Is losing money.
B)Has a high contribution margin.
C)Is riskier than higher margin of safety products.
D)Is less risky than higher margin of safety products.
E)Requires heavy fixed cost to produce or sell.

Question 9

The unit contribution margin multiplied by the number of units sold is the:

A)Segment margin.
B)Total contribution margin.
C)Contribution margin ratio.
D)Margin of safety.
E)Breakeven point.

Question 10

Which one of the following is the most useful measure for comparing the risk of two alternative products?

A)Contribution margin ratio.
B)Margin of safety ratio.
C)Financial leverage.
D)Breakeven point.
E)Sensitivity Analysis.

Question 11

CVP analysis for revenue and cost planning has the primary objective of:

A)Maximizing revenue.
B)Minimizing costs.
C)Both revenue maximization and cost minimization.
D)Achieving the desired level of sales and profits.
E)Consistently producing sales above the breakeven level.

Question 12

CVP analysis with multiple products assumes that sales will continue at the same mix of products,expressed in either sales units or sales dollars.This assumption is essential,because a change in the product mix will probably change:

A)The average sales price.
B)The average variable cost.
C)The weighted-average contribution margin.
D)The total fixed cost.

Question 13

From a strategic management perspective,the primary reason a firm performs CVP analysis for breakeven planning is to find the level of sales that:

A)Assures the firm a desired level of profit.
B)Will allow the firm to compete in a market place.
C)Will just cover all fixed costs.
D)Promises a satisfactory growth in revenue.
E)Reduces the threat of bankruptcy.

Question 14

In measuring unit variable cost,CVP analysis includes:

A)Only variable production costs.
B)Only variable distribution and selling costs.
C)Both variable production and variable selling/distribution costs.
D)Only variable and semi-variable production costs.

Question 15

In performing short-term CVP analysis for a new product or service,the decision-maker would:

A)Include all current and future fixed costs.
B)Include only current fixed costs.
C)Include only future fixed costs.
D)Include only incremental fixed costs.
E)Include only allocated fixed costs.

Question 16

In order to determine the sales volume necessary to achieve a desired profit level,CVP analysis would be applied for:

A)Target costing.
B)Cost planning.
C)Profit planning.
D)Revenue planning.
E)Activity-based costing.

Question 17

Grant's Western Wear is a retailer of western hats located in Atlanta,Georgia.Although Grant's carries numerous styles of western hats,each hat has approximately the same price and invoice purchase cost,as shown below.Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts.Currently the economy of Atlanta is really humming,and sales growth at Grant's has been great.However,the business is very competitive,and Grant has relied on its knowledgeable and courteous staff to attract and retain customers,who otherwise might go to other western wear stores.Also,because of the rapid growth in sales,Grant is finding it more difficult to manage certain aspects of the business,such as restocking of inventory and hiring and training new salespeople.
The annual breakeven point in dollar sales is calculated to be:

A)$504,000.
B)$576,000.
C)$468,000.
D)$612,000.
E)$540,000.

Question 18

The CVP model assumes that over the relevant range of activity:

A)Only revenues are linear.
B)Only revenues and fixed costs are linear.
C)Only revenues and variable costs are linear.
D)Revenues and total costs are linear.

Question 19

High operating leverage is a measure of the risk of change in profit a firm assumes when it has relatively:

A)High variable cost.
B)High fixed cost.
C)High sales.
D)High turnover.
E)High sales expectations.

Question 20

The difference between sales price and unit variable cost is the:

A)Unit contribution margin.
B)Total contribution margin.
C)Contribution margin ratio.
D)Margin of safety.
E)Breakeven point.

Question 21

The sales and cost data for two companies in the transportation industry are as follows:
X Company's operating leverage is calculated to be:

A)4.
B)5.
C)7.
D)6.
E)3.

Question 22

OutlyTech Corp.expected to sell 24,000 telephone switches.Fixed costs were $12,144,000,unit sales price was $3,200,and unit variable costs were $1,440.OutlyTech's margin of safety in sales dollars is calculated to be:

A)$76,577,000.
B)$87,517,000.
C)$82,044,000.
D)$54,720,000.
E)$66,900,000.

Question 23

Becker Sofa Company expected to sell 12,000 leather sofas.Fixed costs were $8,400,000;unit sales price was $4,600;and unit variable costs were $2,200.Becker Sofa Company's margin of safety in sales dollars is calculated to be:

A)$36,200,000.
B)$42,600,000.
C)$33,300,000.
D)$46,700,000.
E)$39,100,000.

Question 24

Premium Beds is a retailer of luxury bed frames located in Los Angeles,California.Due to a recent industry-wide financial crisis,the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
The annual breakeven point in unit sales is calculated to be:

A)1,600 units.
B)2,000 units.
C)3,400 units.
D)1,300 units.
E)2,600 units.

Question 25

The sales and cost data for two companies in the transportation industry are as follows:
X Company's margin of safety ratio is calculated to be:

A)7.69%.
B)14.29%.
C)23.62%.
D)47.50%.
E)25.00%.

Question 26

Power Cords Corp.expected to sell 42,000 industrial power cords.Fixed costs were $1,650,000;unit sales price was $3,750;and unit variable costs were $2,250.Power Cord Corp.'s margin of safety ratio is calculated to be:

A)91.59%.
B)97.38%.
C)90.71%.
D)99.47%.
E)93.15%.

Question 27

The sales and cost data for two companies in the transportation industry are as follows:
Y Company's margin of safety in sales dollars is calculated to be:

A)$9,231.
B)$28,343.
C)$30,000.
D)$17,143.
E)$57,000.

Question 28

Stylish Sitting is a retailer of office chairs located in San Francisco,California.Due to increased market competition,the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
The annual breakeven point in unit sales is calculated to be:

A)15,000 units.
B)24,000 units.
C)36,000 units.
D)13,000 units.
E)19,000 units.

Question 29

OutlyTech Corp.expected to sell 24,000 telephone switches.Fixed costs were $12,144,000,the unit sales price was $3,200,and unit variable costs were $1,440.OutlyTech's margin of safety in units is calculated to be (rounded up to nearest whole number):

A)18,270.
B)17,100.
C)20,880.
D)16,970.
E)22,190.

Question 30

Power Cords Corp.expected to sell 42,000 industrial power cords.Fixed costs were $1,650,000;unit sales price was $3,750;and unit variable costs were $2,250.Power Cord Corp.'s margin of safety in sales dollars is calculated to be:

A)$153,375,000.
B)$187,550,000.
C)$159,295,000.
D)$171,100,000.
E)$142,925,000.

Question 31

Premium Beds is a retailer of luxury bed frames located in Los Angeles,California.Due to a recent industry-wide financial crisis,the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
The annual breakeven point in dollar sales is calculated to be:

A)$4,800,000.
B)$4,500,000.
C)$4,100,000.
D)$4,600,000.
E)$4,300,000.

Question 32

Grant's Western Wear is a retailer of western hats located in Atlanta,Georgia.Although Grant's carries numerous styles of western hats,each hat has approximately the same price and invoice purchase cost,as shown below.Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts.Currently the economy of Atlanta is really humming,and sales growth at Grant's has been great.However,the business is very competitive,and Grant has relied on its knowledgeable and courteous staff to attract and retain customers,who otherwise might go to other western wear stores.Also,because of the rapid growth in sales,Grant is finding it more difficult to manage certain aspects of the business,such as restocking of inventory and hiring and training new salespeople.
If 24,000 hats were sold,Grant's operating income would be:

A)$100,800.
B)$115,200.
C)$93,600.
D)$108,000.
E)$122,400.

Question 33

Power Cords Corp.expected to sell 42,000 industrial power cords.Fixed costs were $1,650,000;unit sales price was $3,750;and unit variable costs were $2,250.Power Cords Corp.'s margin of safety in units is calculated to be:

A)48,800.
B)39,000.
C)40,900.
D)36,100.
E)32,500.

Question 34

Becker Sofa Company expected to sell 12,000 leather sofas.Fixed costs were $8,400,000;unit sales price was $4,600;and unit variable costs were $2,200.Becker Sofa Company's margin of safety in units is calculated to be:

A)8,800.
B)8,000.
C)9,900.
D)9,100.
E)8,500.

Question 35

Stylish Sitting is a retailer of office chairs located in San Francisco,California.Due to increased market competition,the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
The annual breakeven point in dollar sales is calculated to be:

A)$1,300,000.
B)$1,500,000.
C)$1,100,000.
D)$1,600,000.
E)$1,800,000.

Question 36

The sales and cost data for two companies in the transportation industry are as follows:
The annual breakeven point in sales dollars for X Company is calculated to be:

A)$102,857.
B)$90,000.
C)$63,000.
D)$110,769.
E)$91,657.

Question 37

OutlyTech Corp.expected to sell 24,000 telephone switches.Fixed costs were $12,144,000,unit sales price was $3,200,and unit variable costs were $1,440.OutlyTech's margin of safety ratio is:

A)71.25%.
B)87.00%.
C)70.25%.
D)92.50%.
E)76.15%.

Question 38

Premium Beds is a retailer of luxury bed frames located in Los Angeles,California.Due to a recent industry-wide financial crisis,the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
If 4,000 bed frames were sold,the firm's operating income would be:

A)$1,240,000.
B)$1,280,000.
C)$1,200,000.
D)$1,340,000.
E)$1,120,000.

Question 39

Stylish Sitting is a retailer of office chairs located in San Francisco,California.Due to increased market competition,the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream.The CFO asked you to use the company financial information provided below.
If 40,000 office chairs were sold,Stylish Sitting's operating income would be:

A)$240,000.
B)$280,000.
C)$210,000.
D)$340,000.
E)$120,000.

Question 40

Becker Sofa Company expected to sell 12,000 leather sofas.Fixed costs were $8,400,000;unit sales price was $4,600;and unit variable costs were $2,200.Becker Sofa Company's margin of safety ratio is calculated to be:

A)71.29%.
B)77.98%.
C)70.83%.
D)79.27%.
E)73.35%.

Question 41

Which of the following is not an assumption of cost/volume/profit analysis?

A)The variable cost per unit varies over the relevant range of activity.
B)The sales mix is unchanged over the relevant range of activity.
C)Total fixed cost is constant over the relevant range of activity.
D)Total variable cost changes in direct proportion to changes in the level of activity over the relevant range.

Question 42

Crown Co.can produce two types of lamps,the Enlightner and Foglighter.The data on the two lamp models are as follows:
It takes one machine hour to produce each product.Total fixed costs for the manufacture of both products are $90,000.Demand is high enough for either product to keep the plant operating at maximum capacity.
Assuming that sales mix remains constant in dollars,the breakeven point in dollars is (round intermediate calculations to 4 decimal places and final answer to the nearest whole number):

A)$244,764.
B)$306,513.
C)$118,365.
D)$945,667.
E)$288,735.

Question 43

Kelvin Co.produces and sells socks.Variable costs are $4 per pair,and fixed costs for the year total $90,000.The selling price is $6 per pair.The sales units required to make an after-tax profit of $15,000,given an income tax rate of 40 percent,are:

A)47,500 units.
B)56,500 units.
C)65,661units.
D)60,000 units.
E)57,500 units.

Question 44

Framing House,Inc.produces and sells picture frames.Variable costs are $17 per frame,and fixed costs for the year total $130,000.The selling price is $25 per frame.The sales dollars required to make a before-tax profit of $20,000 are calculated to be:

A)$445,650.
B)$468,750.
C)$476,350.
D)$406,150.
E)$412,050.

Question 45

Framing House,Inc.produces and sells picture frames.Variable costs are $17 per frame,and fixed costs for the year total $130,000.The selling price is $25 per frame.The sales dollars required to make an after-tax profit of $10,000,given an income tax rate of 20 percent,are calculated to be(round intermediate calculation(s)to nearest whole number):

A)$436,500
B)$439,000
C)$442,750
D)$460,000
E)$445,325

Question 46

Kelvin Co.produces and sells socks.Variable costs are $4 per pair,and fixed costs for the year total $90,000.The selling price is $6 per pair.The sales dollars required to make a before-tax profit of $10,000 are:

A)$300,000.
B)$309,000.
C)$276,000.
D)$306,000.
E)$312,000.

Question 47

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.If an $18,000 increase in the advertising budget would increase monthly sales by $60,000,the new operating income would be:

A)$19,800.
B)$21,800.
C)$24,800.
D)$23,800.
E)$20,800.

Question 48

Crown Co.can produce two types of lamps,the Enlightner and Foglighter.The data on the two lamp models are as follows:
It takes one machine hour to produce each product.Total fixed costs for the manufacture of both products are $90,000.Demand is high enough for either product to keep the plant operating at maximum capacity.
Assuming that sales mix remains constant in units,the breakeven point in total units is (round intermediate calculations to 3 decimal places and final answer to the nearest whole number):

A)687.
B)710.
C)805.
D)945.
E)1,006.

Question 49

Which of the following factors is not involved in studying cost/volume/profit relationships?

A)Desired profit.
B)Variable costs.
C)Fixed costs.
D)Product mix.
E)Actual sales.

Question 50

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.What is Staley Co.'s margin of safety in units,if 600 units are sold (round intermediate calculation up to nearest whole number of units)?

A)123.
B)242.
C)128.
D)141.
E)214.

Question 51

Framing House,Inc.produces and sells picture frames.Variable costs are $17 per frame,and fixed costs for the year total $130,000.The selling price is $25 per frame.The sales units required to make an after-tax profit of $10,000,given an income tax rate of 20 percent,are calculated to be (round up to nearest whole unit:

A)17,734 units.
B)16,583 units.
C)17,813 units.
D)17,049 units.
E)16,366 units.

Question 52

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.Staley Co.'s operating leverage,if 600 units are sold,is calculated to be:

A)5.118.
B)4.405.
C)5.630.
D)5.000.
E)4.846.

Question 53

Framing House,Inc.produces and sells picture frames.Variable costs are $17 per frame,and fixed costs for the year total $130,000.The selling price is $25 per frame.The sales units required to make a before-tax profit of $15,000 are calculated to be:

A)16,850 units.
B)11,625 units.
C)20,675 units.
D)28,350 units.
E)18,125 units.

Question 54

Kelvin Co.produces and sells socks.Variable costs are $4 per pair,and fixed costs for the year total $90,000.The selling price is $6 per pair.The sales units required to make a before-tax profit of $12,000 are:

A)46,000 units.
B)51,500 units.
C)50,000 units.
D)51,000 units.
E)52,000 units.

Question 55

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.Operating income is calculated to be:

A)$19,800.
B)$21,800.
C)$24,800.
D)$23,800.
E)$20,800.

Question 56

At the breakeven point,fixed cost is always:

A)Less than the total contribution margin.
B)Equal to the total contribution margin.
C)More than the total contribution margin.
D)More than the total variable cost.

Question 57

Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only:

A)Fixed and semi-variable costs.
B)Relevant fixed costs.
C)Relevant variable costs.
D)A relevant range of volume.

Question 58

Cost/volume/profit analysis is a technique available to management to understand better the interrelationships of several factors that affect a firm's profit.As with many such techniques,the accountant oversimplifies the real world by making assumptions.Which of the following is not a major assumption underlying CVP analysis?

A)All costs incurred by a firm can be separated into their fixed and variable components.
B)The product selling price per unit is constant at all volume levels.
C)Operating efficiency and employee productivity are constant at all volume levels.
D)In multi-product situations,the sales mix is assumed to be constant in both units and dollars.
E)Total costs vary only with changes in volume.

Question 59

Kelvin Co.produces and sells socks.Variable costs are $4 per pair,and fixed costs for the year total $90,000.The selling price is $6 per pair.The sales dollars required to make an after-tax profit of $15,000,given an income tax rate of 40 percent,are calculated to be:

A)$336,000.
B)$339,000.
C)$342,000.
D)$360,000.
E)$345,000.

Question 60

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.Staley Co.'s margin of safety ratio if 600 units are sold,is calculated to be:

A)33.4%.
B)17.7%.
C)20.5%.
D)19.5%.
E)79.5%.

Question 61

Which of the following can use cost/volume/profit (CVP)analysis?

A)Not-for-profit organizations but not service firms.
B)Service firms but not organizations which are not-for-profit.
C)Not-for-profit organizations,service firms,and manufacturers.
D)Manufacturing firms but not service firms.

Question 62

Effective use of the CVP model requires an understanding of all of the following concepts,except:

A)Contribution margin.
B)Contribution margin ratio.
C)Contribution income statement.
D)Contribution per batch.

Question 63

Which of the following equations is correct for the breakeven in units under the equation method (where Q = sales in units)?

A)vQ + F + N - pQ = 0.
B)vQ - F + N - pQ = 0.
C)F - N - vQ - pQ = 0.
D)pQ + vQ + F + N = 0.

Question 64

Which of the following illustrates how the level of profits changes over different levels of output?

A)Revenue-volume graph.
B)Cost-revenue chart.
C)Revenue-cost graph.
D)Profit-volume graph.
E)Profit-cost graph.

Question 65

Cleaning Care Inc.expects to sell 10,000 mops.Fixed costs are $10,000,unit sales price is $12,and unit variable costs are $7.Cleaning Care's margin of safety in units is:

A)1,000.
B)2,000.
C)4,000.
D)8,000.
E)9,000.

Question 66

The following information pertains to Korning Corp.:
How many total units must be sold to obtain an after-tax profit of $47,775?

A)780 units.
B)894 units.
C)955 units.
D)1,021 units.
Q x ($670-250)= $327,600 + $47,775/(1-.35)Q = 955

Question 67

Hart Company sold 5,000 units for a price of $50 per unit and had the following information:
If the sales price per unit were to increase by 10%,variable expenses were to increase by 12.5% and fixed expenses were to increase by 20%,what would be the new contribution margin?

A)$19 per unit.
B)$21 per unit.
C)$23 per unit.
D)$25 per unit.
Unit variable cost = $160,000/5,000;($50x1.1)- ($32x1.125)= $19

Question 68

The name for a variety of methods used to examine how an amount will change if factors involved in predicting that amount change is:

A)Sensitivity analysis.
B)What-if analysis.
C)Factor analysis.
D)Cost analysis.
E)Profit Analysis.

Question 69

The equation method and the contribution margin method:

A)Can determine the breakeven point in units sold but not in sales dollars.
B)Can determine the breakeven point in sales dollars but not in units sold.
C)Cannot determine the breakeven point in units sold.
D)Cannot determine the breakeven point in sales dollars.
E)Can determine the breakeven point in units sold or sales dollars.

Question 70

Operating leverage is equal to:

A)(Profit - fixed expenses)/sales.
B)(Sales - variable expenses)/profit.
C)Profit / (fixed expenses - variable expenses).
D)Sales / (fixed expenses - profit).

Question 71

When using cost-volume-profit (CVP)analysis,the following information helps to show how decisions affect net income except:

A)Variable costs.
B)Fixed costs.
C)Output level.
D)Gross margin.

Question 72

EZ Carry Corp.is the maker of high quality golf bags.They currently have three different lines of bags which they sell to sporting goods and golf shops throughout the world.EZ Carry sells a constant mix of 4 small bags for each medium sized bag and 5 medium bags for each large sized bag.Total fixed costs are $2,027,562.
The breakeven point in units would be:

A)32,400 small,8,100 medium,1,620 large.
B)34,808 small,8,700 medium,1,740 large.
C)37,010 small,9250 medium,1,850 large.
D)38,505 small,9,625 medium,1,925 large.

Question 73

Cathy's Towels sells three items: bath towels,hand towels and washcloths in a 4:3:2 mix (a batch of 9 towels has 4 bath towels,3 hand towels and 2 washcloths).Each bath towel sells for $10 and costs $4,each hand towel sells for $5 and costs $2;and each washcloth sells for $2.50 and costs $1.The shop's annual fixed expenses are $324,000,and the tax rate is 40%.How many bath towels must the firm sell at the breakeven point?

A)20,000.
B)36,000.
C)44,000.
D)51,000.

Weighted average CM = $36/9 = $4
Breakeven: $324,000/$4 = 81,000
Breakeven for bath towels = 81,000 x (4/9)= 36,000

Question 74

Label Corp.recorded sales of $2,235,245.The company's breakeven is $1,650,000 and margin of safety is 27%.What sales are needed to increase Label Corp.'s margin of safety ratio to 38%?

A)$2,277,000.
B)$2,661,290.
C)$2,932,640.
D)$3,024,050.
Solve: (X-$1,650,000)/X = .38;X = $2,661,290

Question 75

Nantucket Company has the following cost-volume-profit (CVP)relationships:
What is the variable cost per unit?

A)$515.00.
B)$562.50.
C)$625.00.
D)$655.25.
2,000 x ($625 - v)= $125,000
v = $562.5

Question 76

The following information pertains to MacKenzie Corp.:
If sales price were to decrease by 5% and variable expenses were to increase $2.00 per unit,which of the following is true?

A)The new selling price is $36 per unit.
B)The new breakeven point is $831,250.
C)The new variable expenses are $18 per unit.
D)The new breakeven point is 21,750 units.

Question 77

The calculation of an amount given different level for a factor that influences that amount is called:

A)Sensitivity analysis.
B)What-if analysis.
C)Factor analysis.
D)Cost analysis.
E)Profit Analysis.

Question 78

JCH Sports plans to market a new product for the upcoming college season.Costs associated with the new product are as follows:
How many units must be sold in order to reach a before tax income on the product of $400,000?

A)148,333.
B)385,000.
C)313,000.
D)275,000.

Question 79

Cleaning Care Inc.expects to sell 10,000 mops.Fixed costs are $10,000,unit sales price is $12,and unit variable costs are $7.Cleaning Care's margin of safety ratio is calculated to be:

A)20%.
B)40%.
C)80%.
D)85%.
E)90%

Question 80

Cleaning Care Inc.expects to sell 10,000 mops.Fixed costs are $10,000,unit sales price is $12,and unit variable costs are $7.Cleaning Care's margin of safety in sales dollars is:

A)$12,000.
B)$24,000.
C)$48,000.
D)$50,000.
E)$96,000.