73. Misa Corporation manufactures circuit boards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
The contribution margin ratio for the current year is:
74. Misa Corporation manufactures circuit boards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
The break-even point (rounded to the nearest dollar) for Misa Corporation for the current year is:
75. Misa Corporation manufactures circuit boards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
For the coming year, the management of Misa Corporation anticipates a 5 percent decrease in
sales, a 10 percent increase in all variable costs, and a $45,000 increase in fixed costs.
The operating profit for next year would be:
76. Misa Corporation manufactures circuit boards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
For the coming year, the management of Misa Corporation anticipates a 5 percent decrease in
sales, a 10 percent increase in variable costs, and a $45,000 increase in fixed costs.
The break-even point for next year would be:
77. You have been provided with the following information:
If unit sales decrease by 10%, how much will fixed costs have to be reduced by to maintain the
current operating profit?
78. You have been provided with the following information:
If sales decrease by 10%, what level of fixed costs will maintain the current operating profit?
79. You have been provided with the following information:
If sales increase by 10%, what level of fixed costs will yield a 20% increase in profits?
80. EM Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and
operating profits were $180,000. What is EM’s break-even sales volume?
81. EM Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and
operating profits were $180,000. What sales volume does EM’s need to yield a $240,000
operating profit?
82. EM Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and
operating profits were $180,000. What is EM’s margin of safety is sales dollars?
83. Kanmore produces and sells three products. Last month’s results are as follows:
Fixed costs total $200,000. What is Kanmore’s break-even sales volume? (Assume the current
product mix.)
84. Kanmore produces and sells three products. Last month’s results are as follows:
Fixed costs total $200,000. What is Kanmore’s margin of safety? (Assume the current product
mix.)
85. Kanmore produces and sells three products. Last month’s results are as follows:
Fixed costs total $200,000. What sales volume would generate an operating profit of $150,000?
(Assume the current product mix.)
86. The difference between total sales in dollars and total variable costs is called:
87. With regard to the CVP graph, which of the following statements is not correct?
88. East Company manufactures and sells a single product with a positive contribution
margin. If the selling price and the variable cost per unit both increase 5% and fixed costs do not
change, what is the effect on the contribution margin per unit and the contribution margin ratio?
89. Which of the following formulas is used to calculate the contribution margin ratio?
90. Brasher Company manufactures and sells a single product that has a positive
contribution margin. If the selling price and variable costs both decrease by 5% and fixed costs do
not change, then what would be the effect on the contribution margin per unit and the
contribution margin ratio?
91. Break-even analysis assumes that:
92. If Q equals the level of output, P is the selling price per unit, V is the variable cost per
unit, and F is the fixed cost, then the break-even point in units is:
93. The margin of safety percentage is computed as:
94. The amount by which a company’s sales can decline before losses are incurred is called
the:
95. The degree of operating leverage can be calculated as: