Acct. Ch 19

171. If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars? a. $1,250,000 b. $450,000 c. $1,875,000 d. $300,000

$1,875,000

168. Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units? a. $125,000 decrease b. $175,000 increase c. $75,000 increase d. $247,500 increase

$247,500 increase

184. If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was a. $5,000,000 b. $3,000,000 c. $12,000,000 d. $1,000,000

$3,000,000

169. Zeke Company sells 25,000 units at $21 per unit. Variable costs are $10 per unit, and fixed costs are $75,000. The contribution margin ratio and the unit contribution margin are a. 47% and $11 per unit b. 53% and $7 per unit c. 47% and $8 per unit d. 52% and $11 per unit

52% and $11 per unit

155. Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? a. direct labor b. salary of a factory supervisor c. units-of-production depreciation on factory equipment d. direct materials

salary of a factory supervisor

165. Contribution margin is a. the excess of sales revenue over variable cost b. another term for volume in the "cost-volume-profit" analysis c. profit d. the same as sales revenue

the excess of sales revenue over variable cost

166. The contribution margin ratio is a. the same as the variable cost ratio b. the same as profit c. the portion of equity contributed by the stockholders d. the same as the profit-volume ratio

the same as the profit-volume ratio

175. Which of the following conditions would cause the break-even point to decrease? a. total fixed costs increase b. unit selling price decreases c. unit variable cost decreases d. unit variable cost increases

unit variable cost decreases

158. A cost that has characteristics of both a variable cost and a fixed cost is called a a. variable/fixed cost b. mixed cost c. discretionary cost d. sunk cost

mixed cost

170. If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales (units)? a. 3,425 units b. 2,381 units c. 2,000 units d. 4,808 units

4,808 units

167. If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio? a. 45% b. 55% c. 62% d. 32%

45%

176. Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point a. will decrease by 9% b. will increase by 9% c. cannot be determined from the data given d. will increase at a rate greater than 9%

cannot be determined from the data given

172. If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000? a. 9,231 units b. 12,000 units c. 10,769 units d. 5,833 units

10,769 units

178. Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130, what is the amount of sales required to realize an operating income of $200,000? a. 14,167 units b. 12,500 units c. 16,000 units d. 11,538 units

14,167 units

177. O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)? a. 12,800 units b. 4,571 units c. 16,000 units d. 7,111 units

16,000 units

174. If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000? a. 17,250 b. 15,000 c. 8,333 d. 9,667

17,250

185. If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage? a. 0.0 b. 7.5 c. 2.0 d. 1.3

2.0

173. Reynold's Grocery has fixed costs of $350,000, the unit selling price is $29, and the unit variable costs are $20. What is the break-even sales (units) if the variable costs are decreased by $4? a. 26,923 units b. 12,069 units c. 21,875 units d. 38,889 units

26,923 units

161. As production increases, the fixed cost per unit a. increases b. decreases c. remains the same d. either increases or decreases, depending on the variable costs

decreases

156. Which of the following describes the behavior of the fixed cost per unit? a. decreases with increasing production b. decreases with decreasing production c. remains constant with changes in production d. increases with increasing production

decreases with increasing production

157. Which of the following is an example of a cost that varies in total as the number of units produced changes? a. salary of a production supervisor b. direct materials cost c. property taxes on factory buildings d. straight-line depreciation on factory equipment

direct materials cost

154. Costs that remain constant in total dollar amount as the level of activity changes are called a. fixed costs b. mixed costs c. product costs d. variable costs

fixed costs

153. The three most common cost behavior classifications are a. variable costs, product costs, and sunk costs b. fixed costs, variable costs, and mixed costs c. variable costs, period costs, and differential costs d. variable costs, sunk costs, and opportunity costs

fixed costs, variable costs, and mixed costs