1)The cost-volume-profit analysis approach provides a method to assess how many units and or sales dollars we need to achieve to make a desired profit

True or False

2)If a management accountant provides costs that include significant excess capacity this is helpful to management in their pricing and profitability analysis

True or False

3)TSox's are planning its upcoming year. It anticipates selling 50,000 t-shirts, with a price of $20 each. The variable cost per t-shirt is $10. The fixed costs to run the operation are $300,000 per year.

How much profit (ignore taxes) will ABC make if it achieves the projections for the upcoming year?

150,000 200,000 250,000 0

4)TSox's are planning its upcoming year. It anticipates selling 50,000 t-shirts, with a price of $20 each. The variable cost per t-shirt is $10. The fixed costs to run the operation are $300,000 per year.

What is the break even point in units?

15,000 20,000 30,000 50,000

5)TSox's are planning its upcoming year. It anticipates selling t-shirts, with a price of $20 each. The variable cost per t-shirt is $10. The fixed costs to run the operation are $300,000 per year.

If the desired profit (ignoring taxes) is $400,000 how many t-shirts will they need to sell?

50,000 70,000 45,000 80,000

6)TSox's are planning its upcoming year. It anticipates selling 50,000 t-shirts, with a price of $20 each. The variable cost per t-shirt is $10.

If prices drop by 20% and fixed cost increase as noted what is the new break even point?

The fixed costs have now increased to $420,000 per year.

50,000 60,000 30,000 70,000