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Quiz 4: Cost-Volume-Profit Analysis 1. Which of the following is true as it relates to variable, fixed and mixed cost behaviors? Total variable costs are
Quiz 4: Cost-Volume-Profit Analysis 1. Which of the following is true as it relates to variable, fixed and mixed cost behaviors? Total variable costs are inversely related to changes in the volume. b. As volume increases, foed cost per unit increases. Variable cost per unit is constant within the relevant range. d. Fixed costs, variable costs and mixed costs all behave the same way. a C. 12.000 Use the following information to answer the next two (2) questions: Sammy Manufacturing has the following data based on total costs and production volumes from the previous 5 months: Month Total Cost Production Volume (units) 9,800 January $600,300 12,250 February 724,440 March 680,250 8.000 April 524,690 8.250 May 529,625 2. Using the High-Low Method, calculate estimated fixed costs. $1,300,190 b. $199.750 C. $47.00 d $148,690 3. Using the High-Low method, determine the amount of total costs estimated if production was 13,500 units. 5783,190 b. S162,190 c. $742,000 d. $738,250 a 4. $1,500,000 $ 200,000 $ 160,000 $ 300,000 Bearkat Bicylces reported the following results for September: Sales (100,000 units) Total Variable product costs Total Variable selling & administrative expense Total fixed selling & administrative expense Calculate the contribution margin ratio: a 76.00% 86.67% c. 90.00% d 1.15% 5. In CVP analysis, the contribution margin per unit is: Sales price per unit less total cost per unit b. Sales price per unit less cost of goods sold per unit c. Sales price per unit less total variable cost per unit d. Sales price per unit less fixed cost per unit vne the following information for the next two (2) questions: Bearkat Deli operates in Huntsville, Texas. The anticipated variable cost per sandwich meal will amount to $3.00 and the fixed costs will total $5,000 per month. The expected sales price for a sandwich meal is $7.00 per unit. 6. How many sandwich meals must be sold in order to breakeven? a 2,241 meals b. 690 meals c. 1.250 meals d 1,538 meals 7. Using the above information as the original data, the dell is now reaching for a target profit of $10,000 for the month. They believe if they take out a $1,000 advertising campaign, increasing their fixed costs, they will be able to sell the sandwich meals for a higher price and make the targeted profit. If Bearkat Deli decides to increase its sales price by $1.00, which of the following statements is correct? (Round any decimals to 3 decimal places while calculatine) a. The deli needs to sell 3,000 sandwich meals in order to make a target profit of $10,000 for the month. b. The deli needs to have gross sales of $25,600 in order to make a target profit of $10,000 for the month. The deli needs to have gross sales of $24,000 in order to make a target profit of $10,000 for the month. d. The deli would need to sell 1,905 sandwich meals in order to reach the target profit of $10,000 8. A 15 increase in production volume will result in a 15% increase in A variable cost per unit B. total administration costs c contribution margin D. fed cost per unit 9. JTC Corporation makes a product with a variable cost of $35 per unit and sells the product of $60 a unit. The total fixed costs are 526,000. What will be the effect on the breakeven point in units if variable cost increases by $5 a unit due to an increase in the cost of direct materials? A. It will increase by 260 units B. It will decrease by 260 unit C. It will decrease by 176 units D. It will increase by 176 units 10. Barrett Corporation has provided the following information on production of 10,000 units a month: Sales Revenue/Unit $8.50 Variable costs/Unit $5.25 Fixed Costs $22.000 The company believes that the volume will go up to 12,000 units if the company reduces its sales price to $7.50. How would this change affect operating income? A. It will increase by $5500 B. It will increase by $10,500 C. It will decrease by $5500 D. It wil decrease by $10,500
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