The contribution-margin ratio is:
the difference between the selling price and the variable cost per unit.
- fixed cost per unit divided by variable cost per unit.
- variable cost per unit divided by the selling price.
- unit contribution margin divided by the selling price.
- unit contribution margin divided by fixed cost per unit.
A company observed a decrease in the cost per unit. All other things being equal, which of the following is probably true?
- The company is studying a variable cost, and total volume has increased.
- The company is studying a variable cost, and total volume has decreased.
- The company is studying a fixed cost, and total volume has increased.
- The company is studying a fixed cost, and total volume has decreased.
- The company is studying a fixed cost, and total volume has remained constant.
A company has fixed costs of $900 and a per-unit contribution margin of $3. Which of the following statement is (are) true?
- Total contribution margin equals the sum of variable cost plus fixed cost.
- The situation described is not possible and there must be an error.
- Once the break-even point is reached, the company will increase income at the rate of $3 per unit.
- The firm will definitely lose money in this situation.
Ribco Co. makes and sells only one product. The unit contribution margin is $6 and the break-even point in unit sales is 24,000. The company's fixed costs are:
- $4,000.
- $14,400.
- $40,000.
- $144,000.
- an amount other than those above.
Which of the following methods of cost estimation relies on only two data points?
- Least-squares regression.
- The high-low method.
- The visual-fit method.
- Account analysis.
- Multiple regression.
A manager who wants to determine the percentage impact on income of a given percentage change in sales would multiply the percentage increase/decrease in sales revenue by the:
- contribution margin.
- gross margin.
- operating leverage factor.
- safety margin.
- contribution-margin ratio.
Brooklyn sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed costs of $360,000. If Brooklyn's unit sales are 200 units less than anticipated, its breakeven point will:
- increase by $12 per unit sold.
- decrease by $12 per unit sold.
- increase by $8 per unit sold.
- decrease by $8 per unit sold.
- not change.
Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?Swanson's variable cost per copy is:
- $0.040.
- $0.051.
- $0.053.
- $0.056.
At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's contribution margin per unit is:
- $22.
- $28.
- $35.
- $37.
- an amount other than those above.
A forecast of a cost at a particular level of activity is termed:
- cost estimation.
- cost prediction.
- cost behavior.
- cost analysis.
- cost approximation.
At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's break-even point in units is:
- 7,027 (rounded).
- 8,667 (rounded).
- 9,286 (rounded).
- 7,429 (rounded).
- an amount other than those above.
The difference between budgeted sales revenue and break-even sales revenue is the:
- contribution margin.
- contribution-margin ratio.
- safety margin.
- target net profit.
- operating leverage.
DuChien Corporation recently produced and sold 100,000 units. Fixed costs at this level of activity amounted to $50,000; variable costs were $100,000. How much cost would the company anticipate if during the next period it produced and sold 102,000 units?
- $150,000.
- $151,000.
- $152,000.
- $153,000.
- Some other amount not listed above.
Which of the following costs changes in direct proportion to a change in the activity level?
- variable cost.
- fixed cost.
- semivariable cost.
- step-variable cost.
- step-fixed cost.
Northlake, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:
- $24,000.
- $90,000.
- $210,00.
- $234,000.
- an amount other than those listed above.
Yellow Dot, Inc. sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 at a volume level of 10,000 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of $240,000?
- $400,000.
- $500,000.
- $600,000.
- $750,000.
- $900,000.
Booster, Inc. recently conducted a least-squares regression analysis to predict selling expenses. The company has constructed the following regression equation: Y = 329,000 + 7.80X. Which of the following statements is false if the primary cost driver is number of units sold?
The company anticipates $329,000 of fixed selling expenses.?
"Y" represents total selling expenses.?
The company expects both variable and fixed selling expenses.?
For each unit sold, total selling expenses will increase by $7.80.?
"X" represents the number of hours worked during the period.
Within the relevant range, a curvilinear cost function can sometimes be graphed as a:
- sloping straight line.
- jagged line.
- vertical straight line.
- curved line.
- horizontal straight line.
Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?How much would Swanson's pay if it made 5,500 copies?
- $382.50.
- $322.
- $300.
- $292.50
Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.?Swanson's monthly fixed fee is: