Question 1

In a graph of cost-volume-profit analysis,the

Accepted Answer

The slope of the total cost line in a cost-volume-profit (CVP) analysis graph is determined by the variable cost per unit. This is because total costs include both fixed costs (which do not change with the level of production or sales) and variable costs (which do change with the level of production or sales). The variable costs per unit directly affect how steeply the total cost line rises as production or sales volume increases.

Question 2

Threshold Inc.has provided the following data:  The sales mix for Products A,B,and C is

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The answer of Threshold Inc.has provided the following data: ...

Question 3

The breakeven point is

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The answer of The breakeven point is
...

Question 4

Contribution margin equals fixed costs plus

Accepted Answer

Contribution margin is defined as sales revenue minus variable costs. It represents the amount of revenue available to cover fixed costs and contribute to operating income. Therefore, the correct answer is that contribution margin equals fixed costs plus operating income, as once fixed costs are covered, the remainder contributes to operating income.

Question 5

Myrid Inc.sells each crystal goblet that it produces for $75.The contribution margin per goblet is $20.Total monthly fixed costs are estimated to be $82,600.How many units should Myrid sell in a month to breakeven? (Round your answer to the nearest whole number. )

Accepted Answer

The answer of Myrid Inc.sells each crystal goblet that it...

Question 6

At the breakeven point,the total contribution margin

Accepted Answer

At the breakeven point, a company covers all of its fixed costs with its total contribution margin. Therefore, the total contribution margin equals fixed costs at the breakeven point.

Question 7

How many units must BAC Company sell to break even if the selling price per unit is $8.50,variable costs are $4.00 per unit,and fixed costs are $9,000?

Accepted Answer

The answer of How many units must BAC Company sell...

Question 8

Manix Company has gathered the following data: Fixed costs are $233,280.Calculate the weighted-average breakeven point for Manix.(Do not round your intermediate calculations. )

Accepted Answer

To calculate the weighted-average breakeven point, we need to first calculate the contribution margin per unit, which is the selling price per unit ($60) minus the variable cost per unit ($24), which equals $36. 
Next, we need to calculate the weight of each product line in the overall sales mix. The weight for Product A is 10,000/26,000 or 0.3846 and the weight for Product B is 16,000/26,000 or 0.6154. 
Finally, we can calculate the weighted-average breakeven point by dividing the fixed costs ($233,280) by the weighted-average contribution margin per unit [($36 x 0.3846) + ($16 x 0.6154)] which equals 28,800 units. Thus, the best choice is B.

Question 9

Which of the following equations represents a breakeven point?

Accepted Answer

The breakeven point is where the revenue earned equals the total costs (fixed and variable). In other words, it is the point where there is no profit or loss. The equation for this is Sales Price x Quantity = Variable Cost x Quantity + Fixed Cost. This can be simplified to Sales Price - Variable Cost = Fixed Cost/Quantity, which is the same as D, Sales Price - Variable Cost = Fixed Cost.

Question 10

Cristy Lake Inc.sold goods worth $144,000 in 2014.It sells each unit for $5.50 and has a 30 percent contribution margin.The company's fixed costs amount to $33,000. Calculate Cristy's breakeven point in units.

Accepted Answer

The answer of Cristy Lake Inc.sold goods worth $144,000 in...

Question 11

Using the contribution margin approach,find the breakeven point in units if the selling price per unit is $10,the variable cost per unit is $6,and the fixed costs are $9,000.

Accepted Answer

Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = $10 - $6 = $4

Breakeven point in units = Fixed costs / Contribution margin per unit
Breakeven point in units = $9,000 / $4 = 2,250 units

Question 12

In 2014,a small publishing company sold 60,000 copies of Super Travel paperbacks (its only product)at $5 per book;total fixed costs were $15,000;and total variable costs were $3 per book.What is this company's breakeven point in units?

Accepted Answer

To find the breakeven point, we need to determine the number of units sold that results in the total revenue being equal to the total costs. 
Total costs = fixed costs + variable costs
Variable costs = 60,000 copies x $3 per book = $180,000
Total costs = $15,000 + $180,000 = $195,000

Total revenue = price per book x number of copies sold
Total revenue = $5 x 60,000 = $300,000

To find the breakeven point in units, we can use the following formula:

Breakeven point (units) = fixed costs / (price per unit - variable cost per unit)

Breakeven point (units) = $15,000 / ($5 - $3) = 7,500 units

Therefore, the best choice is B) 7,500 units.

Question 13

Campbell Inc.earned sales revenue of $150,000 in 2014.Campbell sells each unit of its product for $6.00 and has a 32 percent contribution margin.Campbell has fixed costs of $36,000. What is Cambell's breakeven point in sales dollars?

Accepted Answer

First, we need to calculate the contribution margin per unit: 
$6.00 x 32% = $1.92 
Next, we can use the breakeven formula: 
Breakeven point (in units) = Fixed costs / Contribution margin per unit 
Breakeven point (in units) = $36,000 / $1.92 = 18,750 units 
To find the breakeven point in sales dollars, we multiply the breakeven point (in units) by the selling price per unit: 
Breakeven point (in sales dollars) = 18,750 units x $6.00 = $112,500. 
Therefore, the answer is B.

Question 14

Which of the following equations provides the breakeven point in units? (Here,BE refers to breakeven,SP refers to selling price,VC refers to variable costs,FC refers to fixed costs,and CM refers to contribution margin. )

Accepted Answer

The formula for calculating the breakeven point in units is BE units = FC ÷ (CM per unit). Option C provides this formula, where BE units is calculated by dividing fixed costs (FC) by contribution margin per unit (CM per unit).

Question 15

How many total dollars of sales must Windblow Company sell to break even,if the selling price per unit is $10,variable costs are $5.00 per unit,and fixed costs are $10,000?

Accepted Answer

To break even, Windblow Company must cover its fixed costs with the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable cost per unit, which is $10 - $5 = $5. To cover the fixed costs of $10,000 with a contribution margin of $5 per unit, the company must sell $10,000 / $5 = 2,000 units. Therefore, the total sales to break even would be 2,000 units * $10 per unit = $20,000.

Question 16

When fixed costs are $18,000 and the contribution margin per unit is $4,the breakeven point is

Accepted Answer

The breakeven point is the point where total revenue equals total costs, or when the contribution margin equals fixed costs. 
Using the formula:

Breakeven Point (in units) = Fixed Costs / Contribution Margin per Unit

We can plug in the given values:

Breakeven Point = 18,000 / 4 
Breakeven Point = 4,500 units

Therefore, the answer is A) 4,500 units.

Question 17

Riverside has gathered the following data in order to calculate the weighted-average contribution margin: Round intermediate and final answers to two decimal places.  The weighted-average contribution margin is

Accepted Answer

Weighted-average contribution margin is calculated by dividing the total contribution margin by the total units sold.

Total contribution margin = ($20 x 1,000) + ($75 x 400) = $20,000 + $30,000 = $50,000

Total units sold = 1,000 + 400 = 1,400

Weighted-average contribution margin = $50,000 ÷ 1,400 = $35.71

Therefore, the best choice is C, as none of the given answer choice matches with the calculated answer. However, the closest answer to the calculated weighted-average contribution margin is C) $95.50.

Question 18

The breakeven point is the point at which

Accepted Answer

The breakeven point is the point at which the total revenues generated by the sale of a product or service equal the total costs of producing or providing that product or service. In other words, it is the point at which neither a profit nor a loss is being made.

Question 19

At production levels below the breakeven point,

Accepted Answer

At production levels below the breakeven point, the total cost (which includes both fixed and variable costs) exceeds the total revenue, resulting in a negative profit. Therefore, Option B is the correct choice. Option A is incorrect because fixed costs are not recovered until the production level exceeds the breakeven point. Option C is incorrect because variable costs are never zero. Option D is incorrect because fixed costs are always present and do not become zero at any production level.

Question 20

The new Corina watch has an expected selling price per watch of $42,the projected variable cost per unit is $24,and estimated fixed costs per month are $24,120. The expected breakeven point in sales dollars is

Accepted Answer

The answer of The new Corina watch has an expected...

Quiz 19: Cost-Volume-Profit Analysis