2216 words - 9 pages

Prof SB Salter 6815 Quiz 2

1. Which of the following is NOT a key assumption of cost-volume-profit?

A. Costs may be fixed, variable, mixed or step.

B. Production and sales are equal.

C. Changes in total cost are strictly due to changes in activity.

D. Total costs and revenues can be depicted with a straight line.

2. If production does not equal sales,

A. it must adjust the CVP formulas for that fact if it wishes to use CVP.

B. it cannot use CVP, as an assumption is violated.

C. a CVP analysis will always indicate a breakeven point that cannot be reached.

D. the conclusions it draws from a CVP analysis will not be as sound as they would be if production equaled sales.

3. Profit ...view middle of the document...

Total variable costs/Total fixed costs

8. The formula for break-even point in terms of revenue is

A. Total variable costs/Contribution margin ratio

B. Total fixed costs/Contribution margin ratio

C. Total fixed costs/Unit contribution margin

D. Total variable costs/Total fixed costs

9. Alfred Corp has a selling price of $15, variable costs of $10 per unit, and fixed costs of $5,000. How many units must be sold to break-even?

A. 5,000

B. 10,000

C. ,500

D. 1,667

This should be $1,000.

Contribution Margin = 5 (unit price, 15 – total variable cost, 10)

Breakeven Point = 1,000 (Fixed Cost, 5,000 / contribution margin, 5)

10. Alfred Corp has a selling price of $25 per unit, variable costs of $20 per unit, and fixed costs of $25,000. How many units must be sold to break even?

A. 5,000

B. 10,000

C. 2,500

D. 1,667

11. Emille Corp has a selling price of $20 per unit, variable costs of $10 per unit, and fixed costs of $100,000. How many units must be sold to break even?

A. 5,000

B. 10,000

C. 2,500

D. 1,667

12. Amelia, Inc. has a contribution margin of 40% and fixed costs of $120,000. What is the break-even point?

A. $48,000

B. $300,000

C. $200,000

D. $72,000

13. Marissa, Inc. has a contribution margin of 40% and fixed costs of $200,000. What is the break-even point?

A. $80,000

B. $200,000

C. $300,000

D. $500,000

14. Hawley Corp has a selling price of $50 per unit, variable costs of $40 per unit, and fixed costs of $75,000. How many units must be sold to break-even?

A. 1,500

B. 1,875

C. 7,500

D. 1,667

15. Allain Corp has a selling price of $30, and variable costs of $20 per unit. When 12,000 units are sold, profits equaled $70,000. How many units must be sold to break-even?

A. 19,000

B. 12,000

C. 14,333

D. 5,000

16. Piazza Corp has sales of $400,000, a contribution margin ratio of 40%, and a profit of $40,000. If 20,000 units were sold, what is the break-even point in units?

A. 12,000

B. 8,000

C. 20,000

D. 15,000

17. Last month Kallina Company had a $30,000 profit on sales of $250,000. Fixed costs are $60,000 a month. What sales revenue is needed for Calico to break even?

A. $166,667

B. $90,000

C. $30,000

D. $280,000

18. Last month Karina Company had a $60,000 profit on sales of $300,000. Fixed costs are $120,000 a month. What sales revenue is needed for Calico to break even?

A. $360,000

B. $420,000

C. $200,000

D. $240,000

19. Alfred Corp has a selling price of $25per unit, variable costs of $20 per unit, and fixed costs of $25,000. What sales revenue is needed to break-even?

A. $100,000

B. $5,000

C. $125,000

D. $50,000

20. Calloway Corp has a selling price of $15 per unit, and variable costs of $10 per unit. When 12,000 units are sold, profits equaled $35,000. How many units must be sold to break-even?

A. 19,000

B. 12,000

C. 14,333

D. 5,000

21. Hawley Corp has a selling price of $50 per unit, variable costs of $40 per unit, and fixed costs of...

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