1. If a company is operating at the break-even point: A. its contribution margin will be equal to its variable expenses.B. its margin of safety will be equal to zero. C. its fixed expenses will be equal to its variable expenses. D. its selling price will be equal to its variable expense per unit

2. At the break-even point:

A. sales would be equal to contribution margin.

B. contribution margin would be equal to fixed expenses. C. contribution margin would be equal to net operating income.

D. sales would be equal to fixed expenses.

3. Break-even analysis assumes that

A. Total revenue is constant. B. Unit variable expense is constant. C. Unit fixed expense is constant. D. Selling prices must fall in order to generate more revenue.

4. Target profit analysis is used to answer which of the following questions?

A. What sales volume is needed to cover all expenses?B. What sales volume is needed to cover fixed expenses? C. What sales volume is needed to earn a specific amount of net operating income? D. What sales volume is needed to avoid a loss?

5. Which of the following is an assumption underlying standard CVP analysis? A. In multiproduct companies, the sales mix is constant.B.In manufacturing companies, inventories always change.

C. The price of a product or service is expected to change as volume changes. D. Fixed expenses will change as volume increases.

6. Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $95,000?

A. $12,800 B. $24,200 C. $53,200 D. $66,000

7. Borich Corporation produces and sells a single product. Data concerning that product appear below:

Selling price per unit....$150.00

Variable expense per unit...... $73.50

Fixed expense per month...... $308,295

The break-even in monthly unit sales is closest to:

The break-even in monthly unit sales is closest to:(Points : 2) A. 2,055B. 4,030

C. 4,194

D. 3,426

8. Data concerning Follick Corporation's single product appear below

Selling price per unit....$110.00

Variable expense per unit...... $30.80

Fixed expense per month...... $321, 552

The break-even in monthly dollar sales is closest to:(Points : 2) The break-even in monthly dollar sales is closest to:(Points : 2) A. $1,148,400B. $638,851 C. $321,552 D. $446,600

9. The contribution margin ratio of Mountain Corporation's only product is 52%. The company's monthly fixed expense is $296,400 and the company's monthly target profit is $7,000. The dollar sales to attain that target profit is closest to:

A. $570,000 B. $157,768

C. $583,462

D. $154,128

10. Which of the following costs at a manufacturing company would be treated as a product cost under the variable costing method? A. direct material costB. property taxes on the factory building

C. sales manager's salaries

D. all of these

11. The principal difference between variable costing and absorption costing centers on: A. whether variable manufacturing costs should be included as product costs.B. whether fixed manufacturing costs should be included as product costs. C. whether fixed manufacturing costs and fixed selling and administrative costs should be included as product costs. D. none of these.