Chapter 05 – Cost-Volume-Profit Relationships
110. What is the company’s unit contribution margin?
111. The company’s contribution margin ratio is closest to:
Chapter 05 – Cost-Volume-Profit Relationships
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112. If the company increases its unit sales volume by 3% without increasing its fixed
expenses, then total net operating income should be closest to:
Drake Company’s contribution format income statement for the most recent year appears
below:
Chapter 05 – Cost-Volume-Profit Relationships
113. The unit contribution margin is:
114. The break-even point in sales dollars is:
Chapter 05 – Cost-Volume-Profit Relationships
115. If the company desires a net operating income of $20,000, the number of units needed to
be sold is:
Chapter 05 – Cost-Volume-Profit Relationships
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116. The sales manager is convinced that a $60,000 expenditure on advertising will increase
unit sales by 50% without any other increase in fixed expenses. If the sales manager is
correct, the company’s net operating income would increase by:
The following data were supplied by Reader Corporation:
Chapter 05 – Cost-Volume-Profit Relationships
117. The contribution margin is:
118. The break-even point in sales dollars is:
Chapter 05 – Cost-Volume-Profit Relationships
A company that makes organic fertilizer has supplied the following data:
119. The company’s margin of safety in units is closest to:
Chapter 05 – Cost-Volume-Profit Relationships
120. The company’s unit contribution margin is closest to:
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121. The company’s degree of operating leverage is closest to:
Weiss Corporation produces two models of wood chairs, Colonial and Early American. The
Colonial sells for $60 per chair and the Early American sells for $80 per chair. Variable
expenses for each model are as follows:
Total fixed expenses are $39,600 per month. Expected monthly sales are: Colonial, 1,800
units; Early American, 600 units.
Chapter 05 – Cost-Volume-Profit Relationships
122. The contribution margin per chair for the Colonial model is:
Chapter 05 – Cost-Volume-Profit Relationships
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123. If the sales mix and sales units are as expected, the break-even in sales dollars is closest
to:
Starwalt Corporation produces and sells a single product. The company has provided its
contribution format income statement for March.
Chapter 05 – Cost-Volume-Profit Relationships
124. If the company sells 7,900 units, its total contribution margin should be closest to:
125. If the company sells 7,300 units, its net operating income should be closest to:
Chapter 05 – Cost-Volume-Profit Relationships
Pedulla Inc, which produces and sells a single product, has provided its contribution format
income statement for February.
126. If the company sells 2,100 units, its total contribution margin should be closest to:
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127. If the company sells 2,900 units, its net operating income should be closest to:
The following is Allison Corporation’s contribution format income statement for last month:
The company has no beginning or ending inventories. The company produced and sold
10,000 units last month.
Chapter 05 – Cost-Volume-Profit Relationships
128. What is the company’s contribution margin ratio?
129. What is the company’s break-even sales in dollars?
Chapter 05 – Cost-Volume-Profit Relationships
130. If sales increase by 200 units, by how much should net operating income increase?
131. How many units would the company have to sell to attain target profits of $120,000?
Chapter 05 – Cost-Volume-Profit Relationships
132. What is the company’s margin of safety percentage?
133. What is the company’s degree of operating leverage?
Chapter 05 – Cost-Volume-Profit Relationships
Evergreen Corp. has provided the following data:
134. The contribution margin ratio is:
Chapter 05 – Cost-Volume-Profit Relationships
135. The margin of safety percentage is:
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136. The number of units needed to achieve a target net operating income of $49,500 would
be:
Paxton Corp has provided the following data concerning its operations last month:
Paxton Corp is a retailing organization.