Question hoice Answer on the Scantron provided ONLY.

29 Jun Question hoice Answer on the Scantron provided ONLY.

Question
hoice Answer on the Scantron provided ONLY.

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1. Which of the graphs in Figure 20-1 illustrates the behavior of a total fixed cost?

a.

Graph 2

b.

Graph 3

c.

Graph 4

d.

Graph 1

2. Which of the following describes the behavior of the fixed cost per unit?

a.

Decreases with increasing production

b.

Decreases with decreasing production

c.

Remains constant with changes in production

d.

Increases with increasing production

3. For purposes of analysis, mixed costs are generally:

a.

classified as fixed costs

b.

classified as variable costs

c.

classified as period costs

d.

separated into their variable and fixed cost components

4. Which of the following statements is true regarding fixed and variable costs?

a.

Both costs are constant when considered on a per unit basis.

b.

Both costs are constant when considered on a total basis.

c.

Fixed costs are constant in total, and variable costs are constant per unit.

d.

Variable costs are constant in total, and fixed costs vary in total.

5. Contribution margin is:

a.

the excess of sales revenue over variable cost

b.

another term for volume in the “cost-volume-profit” analysis

c.

profit

d.

the same as sales revenue

6. If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is thecontribution margin ratio?

a.

53.1%

b.

42%

c.

62%

d.

32%

7. Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much willoperating income changeif sales increase by $40,000?

a.

$8,000 increase

b.

$8,000 decrease

c.

$30,000 decrease

d.

$30,000 increase

8. If the contribution margin ratio for France Company is 45%, sales were $425,000. and fixed costs were $100,000, what was theincome from operations?

a.

$167,750

b.

$91,250

c.

$325,000

d.

$133,750

9. If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is thebreak-even sales (units)?

a.

3,425 units

b.

2,381 units

c.

2,000 units

d.

4,808 units

10. If fixed costs are $750,000 and variable costs are 80% of sales, what is the break-even point in sales dollars?

a.

$937,500

b.

$525,000

c.

$3,750,000

d.

$1,275,000

11. If fixed costs are $1,400,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

a.

10,769 units

b.

12,000 units

c.

12,308 units

d.

1,538 units

(for #12) Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are:

Product

Unit Selling

Price

Unit Variable

Cost

Unit Contribution

Margin

Orks

$120

$80

$40

Zins

80

60

20

____ 12. What was Safari Co.’s sales mix last year?

a.

60% Orks, 40% Zins

b.

30% Orks, 70% Zins

c.

70% Orks, 30% Zins

d.

40% Orks, 60% Zins

____ 13. If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?

a.

25%

b.

18%

c.

28%

d.

30%

____ 14. Selling price = $80 per unit

Variable cost = $30 per unit

Units = 20,000

Fixed costs = $240,000

This company is considering a 20% drop in selling price that they believe will raise units sold by 20%. All other costs stay the same. How much will income go up or down if they make this change?

a.

$184,000 less income

b.

$320,000 less income

c.

$20,000 more income

d.

$40,000 more income

____ 15. Another name for variable costing is:

a.

indirect costing

b.

process costing