Question 1

If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would

Accepted Answer

An increase in variable costs per unit would lead to a higher break-even point, as the business would need to sell more units to cover the increased costs and reach the break-even point.

Question 2

If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?

Accepted Answer

The answer of If fixed costs are $600,000 and the...

Question 3

Connor Company's fixed costs are $400,000, the unit selling price is $25, and the unit variable costs are $15. What is the break-even sale units) if the variable costs are increased by $2?

Accepted Answer

The answer of Connor Company's fixed costs are $400,000, the...

Question 4

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

Accepted Answer

The answer of If fixed costs are $561,000 and the...

Question 5

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Accepted Answer

When variable costs per unit decrease, the total cost per unit decreases, which means the company needs to sell fewer units to cover its fixed costs and break even. Therefore, the break-even point would decrease.

Question 6

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20. What is the break-even sale units) if fixed costs are reduced by $40,000?

Accepted Answer

The formula for calculating the break-even point in units is:

Break-even point (units) = Fixed costs / (Unit price - Variable costs)

Without the reduction in fixed costs:

Break-even point (units) = $490,000 / ($35 - $20)
Break-even point (units) = 32,667 units

With the reduction in fixed costs of $40,000:

Break-even point (units) = ($490,000 - $40,000) / ($35 - $20)
Break-even point (units) = 30,000 units

So the break-even point decreases by 2,667 units when fixed costs are reduced by $40,000. Therefore, the best choice is C, 30,000 units.

Question 7

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the unit contribution margin. If fixed costs are reduced by $80,000, the new fixed costs are $500,000 - $80,000 = $420,000. Therefore, the break-even point is $420,000 / $20 = 21,000 units.

Question 8

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

When unit variable cost increases, the break-even point increases because the company needs to sell more units in order to cover their fixed costs and make a profit.

Question 9

Jacob Inc. has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20. What are the old and new break-even sales units) if the unit selling price increases by $4?

Accepted Answer

To calculate the old break-even point (BEP), we use the formula:

BEP = Fixed Costs / (Unit Selling Price - Unit Variable Costs)

BEP = $240,000 / ($32 - $20)

BEP = 20,000 units

To calculate the new break-even point after the unit selling price increases by $4, we use the same formula:

BEP = Fixed Costs / (Unit Selling Price - Unit Variable Costs)

BEP = $240,000 / ($36 - $20)

BEP = 15,000 units

Therefore, the old break-even sales (units) is 20,000 units and the new break-even sales (units) is 15,000 units. Therefore, the best choice is C.

Question 10

Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point

Accepted Answer

The budgeted salary increase for factory supervisors does not provide enough information to determine the impact on the break-even point. Other factors such as fixed costs and variable costs must be considered to accurately determine the break-even point.

Question 11

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130, what is the amount of sales required to realize an operating income of $200,000?

Accepted Answer

To find the sales required to achieve a specific operating income, we can use the formula for the break-even point in units and adjust it for the desired profit. The formula is: (Fixed Costs + Desired Operating Income) / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: ($1,500,000 + $200,000) / ($250 - $130) = $1,700,000 / $120 = 14,166.67 units. Since we can't sell a fraction of a unit, we round up to the nearest whole unit, resulting in 14,167 units.

Question 12

If Kaden Company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24. What is the break-even sale units)?

Accepted Answer

The answer of If Kaden Company's fixed costs are $46,800,...

Question 13

If fixed costs increased and variable costs per unit decreased, the break-even point would

Accepted Answer

The answer of If fixed costs increased and variable costs...

Question 14

Which of the following conditions would cause the break-even point to decrease?

Accepted Answer

When the unit variable cost decreases, the contribution margin per unit increases, which means that fewer units need to be sold to cover the total fixed costs and reach the break-even point.

Question 15

Which of the following conditions would cause the break-even point to increase?

Accepted Answer

An increase in total fixed costs means that more revenue must be generated in order to cover those costs and reach the break-even point.

Question 16

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price
$250
Unit variable cost
100
Total fixed costs
$840,000
The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

Accepted Answer

To calculate the new break-even point, we need to recalculate the contribution margin per unit and the new total fixed costs.

New unit variable cost = $100 * 1.1 = $110
New contribution margin = $250 - $110 = $140

New fixed costs = $840,000 * 1.04 = $873,600

New break-even point = $873,600 / $140 = 6240 units

The difference between the new break-even point and the original break-even point is:

6240 units - 5600 units = 640 units

Therefore, the correct answer is A) increased by 640 units.

Question 17

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units)?

Accepted Answer

Break-even point can be calculated as:
Break-even point (units) = Fixed costs ÷ (Selling price per unit - Variable cost per unit)
Substituting the given values, we get:
Break-even point = 256,000 ÷ (36 - 20) = 16,000 units. 
Therefore, the best choice is C as it gives the correct break-even sales units.

Question 18

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

Accepted Answer

The answer of When Isaiah Company has fixed costs of...

Question 19

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sale units) if the variable costs are decreased by $2?

Accepted Answer

The answer of If fixed costs are $46,800, the unit...

Question 20

If fixed costs are $850,000 and variable costs are 60% of sales, what is the break-even point dollars)?

Accepted Answer

To find the break-even point in dollars, you use the formula: Break-even point = Fixed Costs / (1 - Variable Cost Percentage). Here, the variable cost percentage is 60% or 0.6. So, the calculation is $850,000 / (1 - 0.6) = $850,000 / 0.4 = $2,125,000.

Quiz 19: Cost Behavior and Cost-Volume-Profit Analysis

If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would

If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?

Connor Company's fixed costs are $400,000, the unit selling price is $25, and the unit variable costs are $15. What is the break-even sale units) if the variable costs are increased by $2?

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20. What is the break-even sale units) if fixed costs are reduced by $40,000?

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

Which of the following conditions would cause the break-even point to increase?

Jacob Inc. has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20. What are the old and new break-even sales units) if the unit selling price increases by $4?

Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130, what is the amount of sales required to realize an operating income of $200,000?

If Kaden Company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24. What is the break-even sale units) ?

If fixed costs increased and variable costs per unit decreased, the break-even point would

Which of the following conditions would cause the break-even point to decrease?

Which of the following conditions would cause the break-even point to increase?

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units) ?

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sale units) if the variable costs are decreased by $2?

If fixed costs are $850,000 and variable costs are 60% of sales, what is the break-even point dollars) ?