annjai
Jul 22, 2008, 09:16 AM
01. At its $25 selling price, Paciolli Company has sales of $10,000, variable manufacturing costs of $4,000, fixed manufacturing costs of $1,000, variable selling and administrative costs of $2,000 and fixed selling and administrative costs of $1,000. What is the company's contribution margin per unit?
A) $15
B) $10
C) $0.60
D) $0.40
02. Felix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company's fixed costs are $60,000. What is the breakeven point measured in sales dollars?
A) $240,000
B) $120,000
C) $ 80,000
D) $100,000
03. Zoro, Inc. produces a product that has a variable cost of $6.00 per unit. The company's fixed costs are $30,000. The product sells for $10.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit?
A) 5,000
B) 7,500
C) 8,333
D) 12,500
04. Quill Company sets the selling price for its product by adding a markup to the product's variable manufacturing costs. This approach to pricing is referred to as:
A) target pricing
B) cost-plus pricing
C) target costing
D) contribution margin pricing
05. CMA, Inc. produces a product that has a variable cost of $2.50 per unit. The company's fixed costs are $30,000. The product is sold for $5.00 per unit and the company desires to earn a target profit of $10,000. What amount of sales that will be necessary to earn the desired profit?
A) $80,000
B) $200,000
C) $60,000
D) $100,000
06. Once sales reach the breakeven point, each additional unit sold will
A) increase fixed cost by a proportionate amount.
B) reduce the margin of safety.
C) increase profit by an amount equal to the per unit contribution margin.
D) increase the company's operating leverage.
07. Select the incorrect break-even equation from the following:
A) Total contribution margin = total fixed costs
B) Total contribution margin = total variable costs
C) Total fixed costs / contribution margin ratio = break-even sales in dollars
D) Total revenue = total costs
08. Peacock Company sells its product for $100 per unit. The company's accountant provided the following cost information:
Selling Price per unit = $18. Fixed Costs are $24,000. Total Variable costs are $18,900. 1500 units are sold.
What is Peacock's Company's contribution margin ratio?
A) 60%
B) 70%
C) 30%
D) 40%
09. Quill Company sets the selling price for its product by adding a markup to the product's variable manufacturing costs. This approach to pricing is referred to as:
A) target pricing
B) cost-plus pricing
C) target costing
D) contribution margin pricing
10. The margin of safety can be defined as the
A) Excess of budgeted sales over break-even sales.
B) Excess of budgeted sales over net income.
C) Excess of budgeted sales over fixed costs.
D) Excess of budgeted sales over variable costs.
11. Which of the following is not an assumption made when performing cost-volume-profit analysis?
A) Number of units produced is greater than the number of units sold.
B) Worker efficiency is held constant.
C) The company produces within the relevant range of activity.
D) There is a linear relationship between cost and volume for both fixed and variable cost.
A) $15
B) $10
C) $0.60
D) $0.40
02. Felix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company's fixed costs are $60,000. What is the breakeven point measured in sales dollars?
A) $240,000
B) $120,000
C) $ 80,000
D) $100,000
03. Zoro, Inc. produces a product that has a variable cost of $6.00 per unit. The company's fixed costs are $30,000. The product sells for $10.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit?
A) 5,000
B) 7,500
C) 8,333
D) 12,500
04. Quill Company sets the selling price for its product by adding a markup to the product's variable manufacturing costs. This approach to pricing is referred to as:
A) target pricing
B) cost-plus pricing
C) target costing
D) contribution margin pricing
05. CMA, Inc. produces a product that has a variable cost of $2.50 per unit. The company's fixed costs are $30,000. The product is sold for $5.00 per unit and the company desires to earn a target profit of $10,000. What amount of sales that will be necessary to earn the desired profit?
A) $80,000
B) $200,000
C) $60,000
D) $100,000
06. Once sales reach the breakeven point, each additional unit sold will
A) increase fixed cost by a proportionate amount.
B) reduce the margin of safety.
C) increase profit by an amount equal to the per unit contribution margin.
D) increase the company's operating leverage.
07. Select the incorrect break-even equation from the following:
A) Total contribution margin = total fixed costs
B) Total contribution margin = total variable costs
C) Total fixed costs / contribution margin ratio = break-even sales in dollars
D) Total revenue = total costs
08. Peacock Company sells its product for $100 per unit. The company's accountant provided the following cost information:
Selling Price per unit = $18. Fixed Costs are $24,000. Total Variable costs are $18,900. 1500 units are sold.
What is Peacock's Company's contribution margin ratio?
A) 60%
B) 70%
C) 30%
D) 40%
09. Quill Company sets the selling price for its product by adding a markup to the product's variable manufacturing costs. This approach to pricing is referred to as:
A) target pricing
B) cost-plus pricing
C) target costing
D) contribution margin pricing
10. The margin of safety can be defined as the
A) Excess of budgeted sales over break-even sales.
B) Excess of budgeted sales over net income.
C) Excess of budgeted sales over fixed costs.
D) Excess of budgeted sales over variable costs.
11. Which of the following is not an assumption made when performing cost-volume-profit analysis?
A) Number of units produced is greater than the number of units sold.
B) Worker efficiency is held constant.
C) The company produces within the relevant range of activity.
D) There is a linear relationship between cost and volume for both fixed and variable cost.