Managerial SmartBook (AC-210)

Daisy's Dolls sold 30,000 dolls this year. Each doll sold for $40 and had a variable cost of $19. Fixed expenses were $250,000. Net operating income for the year is __________

$380,000

Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total $85,000. Vivian's Violins net operating income is _________

$99,000 ($184,000 - $85,000 = $99,000)

Given sales of $1,452,000, variable expenses of $958,320 and fixed expenses of $354,000, the contribution margin ratio is Blank______. Multiple choice question.

34%

Gifts Galore had sales revenue of $189,000. Total contribution margin was $100,170 and total fixed expenses were $27,500. The contribution margin ratio was ______.

53%

Variable costs remain fixed in total within the relevant range of activity. True or False

False

Within the relevant range of activity, Blank______ costs remain constant in total.

Fixed

A cost that contains both variable and fixed cost elements is a(n) _______ Cost

Mixed

A cost that contains both variable and fixed cost elements is called a(n) _________ , Correct Unavailable cost.

Mixed

The break-even point is reached when the contribution margin is equal to:

Total fixed Expenses

Which type of cost changes in total, in direct proportion to changes in activity level?

Variable

Within the relevant range, ________ costs remain constant on a per unit basis.

Variable

Within the relevant range, a cost that changes in direct proportion to changes in the activity level is a Blank______ cost.

Variable

Variable costs ______.

Vary in Total, Remain constant per unit

Contribution margin:

becomes profit after fixed expenses are covered.

Users can easily judge the impact on profits of changes in selling price, cost or volume when using an income statement constructed under the Blank______ approach.

contribution margin

The calculation of contribution margin (CM) ratio is

contribution margin ÷ sales

Variable costs Blank______.

remain constant per unit and vary in total