Cost-volume-profit analysis is based on certain general assumptions. Which of the following isnotone of these assumptions?

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Multiple Choice

• Unit variable cost remains constant as activity changes.
• Product prices will remain constant as volume varies within the relevant range.
• Total fixed costs remain constant as activity changes.
• Costs can be categorized as fixed, variable, or semivariable.
• The efficiency and productivity of the production process and workers will change to reflect manufacturing advances.

2. The following information relates to Dazie Company:

Sales revenue

$

12,000,000

Contribution margin

5,000,000

Net Income

1,000,000

Dazie's operating leverage factor is closest to:

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Multiple Choice

• 0.400.
• 2.400.
• 0.417.
• 5.000.
• 0.083.

Which of the following statements is (are) true regarding a company that has implemented flexible manufacturing systems and activity-based costing?

1. I. The company has erred, as these two practices used in conjunction with one another will severely limit the firm's ability to analyze costs over the relevant range.

2.II. Costs formerly viewed as fixed under traditional-costing systems may now be considered variable with respect to changes in cost drivers such as number of setups, number of material moves, and so forth.

3.III. As compared with the results obtained under a traditional-costing system, the concept of break-even analysis loses meaning.

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Multiple Choice

• I and II.
• II and III.
• II only.
• III only.
• I only.

4.Narchie sells a single product for $60. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $630,000. Current sales total 26,000 units.

If Narchie sells 38,000 units, its safety margin will be:

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Multiple Choice

• $180,000.
• $630,000.
• $2,100,000.
• $2,280,000.
• None of the answers is correct.

5.Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $560,000. Current sales total 24,000 units.

In order to produce a target profit of $30,000, Narchie's dollar sales must total:

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Multiple Choice

• $11,800.
• $29,500.
• $1,400,000.
• $1,475,000.
• None of the answers is correct.

Which of the following doesnottypically appear on a contribution income statement?

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Multiple Choice

• Contribution margin.
• Total variable costs.
• Gross margin.
• Net income.
• Total fixed costs.

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6.McGuire Corporation sells three products: R, S, and T. Budgeted information for the upcoming accounting period follows.

Product

Sales Volume

(Units)

Selling

Price

Variable

Cost

R

18,000

$

19

$

14

S

14,000

15

10

T

51,000

16

12

The company's weighted-average unit contribution margin is:

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Multiple Choice

• $4.00.
• $4.39.
• $5.00.
• $28.28.
• None of the answers is correct.

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7.Which of the following doesnottypically appear on a contribution income statement?

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Multiple Choice

• Contribution margin.
• Total variable costs.
• Gross margin.
• Net income.
• Total fixed costs.

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8.At a volume level of 560,000 units, Sullivan reported the following information:

Sales price

$

66

Variable cost per unit

25

Fixed cost per unit

4

The company's contribution-margin ratio is closest to:

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Multiple Choice

• 0.38.
• 0.41.
• 0.66.
• 0.62.
• None of the answers is correct.

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9.

Refer to the figure above. The slope of line B is equal to the:

Multiple Choice

• unit contribution margin.
• variable cost per unit.
• profit per unit.
• selling price per unit.
• fixed cost per unit.

Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $411,600. Current sales total 20,500 units.

Narchie:

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Multiple Choice

• will break-even by selling 27,440 units.
• will break-even by selling 8,232 units.
• cannot break-even because it loses money on every unit sold.
• will break-even by selling 14,643 units.
• will break-even by selling 1,372,000 units.