Reference no: EM13227332

The contribution-margin ratio is:

the difference between the selling price and the variable cost per unit.

• fixed cost per unit divided by variable cost per unit.
• variable cost per unit divided by the selling price.
• unit contribution margin divided by the selling price.
• unit contribution margin divided by fixed cost per unit.

A company observed a decrease in the cost per unit. All other things being equal, which of the following is probably true?

• The company is studying a variable cost, and total volume has increased.
• The company is studying a variable cost, and total volume has decreased.
• The company is studying a fixed cost, and total volume has increased.
• The company is studying a fixed cost, and total volume has decreased.
• The company is studying a fixed cost, and total volume has remained constant.

A company has fixed costs of $900 and a per-unit contribution margin of $3. Which of the following statement is (are) true?

• Total contribution margin equals the sum of variable cost plus fixed cost.
• The situation described is not possible and there must be an error.
• Once the break-even point is reached, the company will increase income at the rate of $3 per unit.
• The firm will definitely lose money in this situation.

Ribco Co. makes and sells only one product. The unit contribution margin is $6 and the break-even point in unit sales is 24,000. The company's fixed costs are:

• $4,000.
• $14,400.
• $40,000.
• $144,000.
• an amount other than those above.

Which of the following methods of cost estimation relies on only two data points?

• Least-squares regression.
• The high-low method.
• The visual-fit method.
• Account analysis.
• Multiple regression.

A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales revenue by the:

• contribution margin.
• gross margin.
• operating leverage factor.
• safety margin.
• contribution-margin ratio.

Brooklyn sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed costs of $360,000. If Brooklyn's unit sales are 200 units less than anticipated, its breakeven point will:

• increase by $12 per unit sold.
• decrease by $12 per unit sold.
• increase by $8 per unit sold.
• decrease by $8 per unit sold.
• not change.

Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?Swanson's variable cost per copy is:

• $0.040.
• $0.051.
• $0.053.
• $0.056.

At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's contribution margin per unit is:

• $22.
• $28.
• $35.
• $37.
• an amount other than those above.

A forecast of a cost at a particular level of activity is termed:

• cost estimation.
• cost prediction.
• cost behavior.
• cost analysis.
• cost approximation.

At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's break-even point in units is:

• 7,027 (rounded).
• 8,667 (rounded).
• 9,286 (rounded).
• 7,429 (rounded).
• an amount other than those above.

The difference between budgeted sales revenue and break-even sales revenue is the:

• contribution margin.
• contribution-margin ratio.
• safety margin.
• target net profit.
• operating leverage.

DuChien Corporation recently produced and sold 100,000 units. Fixed costs at this level of activity amounted to $50,000; variable costs were $100,000. How much cost would the company anticipate if during the next period it produced and sold 102,000 units?

• $150,000.
• $151,000.
• $152,000.
• $153,000.
• Some other amount not listed above.

Which of the following costs changes in direct proportion to a change in the activity level?

• variable cost.
• fixed cost.
• semivariable cost.
• step-variable cost.
• step-fixed cost.

Northlake, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:

• $24,000.
• $90,000.
• $210,00.
• $234,000.
• an amount other than those listed above.

Yellow Dot, Inc. sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 at a volume level of 10,000 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of $240,000?

• $400,000.
• $500,000.
• $600,000.
• $750,000.
• $900,000.

Booster, Inc. recently conducted a least-squares regression analysis to predict selling expenses. The company has constructed the following regression equation: Y = 329,000 + 7.80X. Which of the following statements is false if the primary cost driver is number of units sold?


The company anticipates $329,000 of fixed selling expenses.?


"Y" represents total selling expenses.?


The company expects both variable and fixed selling expenses.?


For each unit sold, total selling expenses will increase by $7.80.?


"X" represents the number of hours worked during the period.

Within the relevant range, a curvilinear cost function can sometimes be graphed as a:

• sloping straight line.
• jagged line.
• vertical straight line.
• curved line.
• horizontal straight line.

Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?How much would Swanson's pay if it made 5,500 copies?

• $382.50.
• $322.
• $300.
• $292.50

Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?Swanson's monthly fixed fee is:

• $80
• $102.
• $106.
• $112.