FINAL_PRACTICE_EXAM_REVISED2

Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis? Select one: a. As long as the contribution margin is a positive number, net income will be positive b. As long as variable costs are more than fixed costs, net income will be negative c. As long as the contribution margin is greater than fixed costs, net income will be positive d. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive

On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the difference represents Select one: O A. a positive return on the investment O B. a net loss O C. net income O D. not enough information is presented

A Cost-Volume-Profit graph contains an "Area of Loss" and an "Area ofProfitability". Which of the following best explains the difference between thetwo points on the graph? A. The area of loss represents the difference between Sales and Variable Cost.B. The area of loss begins with the concept that fixed costs have to be recovered priorto sales contributing to profit.C. The area of profit represents the difference between Sales and Variable Cost.D. The area of profit begins with the concept that no company would have any level ofsales below the break-even point.

1.  Cost-volume-profit analysis is used for ________. analyzing the effects of changes in costs on profits analyzing the effects of changes in volume on profits determining selling price All of these choices are correct.     2.  Contribution margin is the ________. difference between sales and fixed costs difference between sales and total costs difference between sales and variable costs None of these choices are correct.

Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.

In a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following? Multiple Choice The break-even point The total fixed expenses The total variable expenses The total contribution margin

CLEAR MY CHOICE Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. All of the given answers are true. O c. Total revenues and total costs are linear in relation to output units. O d. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O e. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. NEXT PAC AGE ere to search

Cost-volume-profit analysis is useful for   Question 8 options:   1)  helping managers to answer "what-if" questions.   2)  implementing a differentiation strategy.   3)  eliminating uncertainty about external factors, such as interest rates.   4)  for long-range planning.   5)  assigning costs to products.

1. A profit-volume graph differs from a cost-volume-profits graph in that a profit-volume graph displays onlya. costs associated with units produced.b. operating income associated with expected sales.c. revenues and costs associated with sales volume.d. revenues expected at targeted sales levels.e. All of these are correct.   2. Fixed expenses that cannot be directly traced to individual segments are calleda. cost structure.b. direct fixed expenses.c. operating leverage.d. common fixed expenses.e. indifference point.   3. If sales remain the same and the margin of safety increases, which of the following is true?a. The break-even point has decreased.b. The common fixed costs have increased.c. The break-even point has remained constant.d. Variable costs have increased.   4. Match the type of income statement to the costs it includes.a. Variable costing income statementb. Absorption costing income statementc. Both types of income statements 1.    Direct materials for units sold2.…

Select the correct statement concerning the below cost-volume-profit graph: Line E A O d. O e. O a. None b. At point B, profits equal total costs. O c. Line E is the total sales line. d. Line F is the Total sales line. e. The point identified by "B" is the breakeven point. The break-even point is where B Line F Oa. None O b. total sales equal total fixed costs. O c. total variable costs equal total fixed costs. total sales equal total variable costs. Line D contribution margin ratio equals total fixed costs. O a. 190 000 b. None OC. 0.73 22 The following monthly data are available for Lumberyard Company which produces only one product: Break-even level in sales of dollars: $530 000 Budgeted sales in dollars for the month of June: $720 000 d. 1 250 000 e. 1.35 How much is the margin of safety for the company for June?

Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.

Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. Oc. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. LEVIOUS PAGE FINISH ATTEMPT ... Finish Esc FnLock F1 F2 F3 F4 FB F9 F10 F11 @ 23 2$ % 1 3 4 6 8. Q W E IT Y S G Y J L. C NIM 24 Alt こ0 >

Select the correct statement concerning the cost-volume-profit graph at right: a. The point identified by "B" is the break-even point. b. Line F is the variable cost line. c. At point B, profits equal total costs. d. Line E is the total cost line. Line F Line E Line D

Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. O c. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. OUS PAGE FINISH ATTEMPT ... F1 F2 F3 F4 F5 F6 F7 F8 F10 23 % & 2 3 4 7 8. V Q W T A F K 13 C V BYNI M 24 S

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

Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant

Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. How does good operating leverage magnify earnings results with modest revenue increase?

Which of the following is not an underlying assumption of a conventional CVP analysis? Multiple Choice Selling price per unit is unrelated to assumed sales volume. Inputs to the profit-planning model are known with certainty. Learning-curve effects (i.e., productivity gains with experience). Fixed costs, in total, do not change as sales mix or total sales volume change. Variable costs per unit are unrelated to changes in volume.

Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratio

Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. What are the limitations of using operating leverage to predict profitability?

1. Distinguish between variable and fixed costs both on a per unit and total basis (graphs may be used to assist in explanation). 2. Identify any three (3) basic assumptions of CVP Analysis. 3. Briefly explain the term sales mix.

The three most common cost behavior classifications are a. variable costs, product costs, and sunk costs b. variable costs, period costs, and differential costs c. variable costs, sunk costs, and opportunity costs d. fixed costs, variable costs, and mixed costs   The contribution margin ratio is a. the portion of equity contributed by the stockholders b. the same as profit c. the same as the profit-volume ratio d. the same as the variable cost ratio

Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. Are these assumptions always valid?

Select the correct statement concerning the cost-volume-profit graph at right:   At point B, profits equal total costs. Line E is the total cost line. Line F is the variable cost line. The point identified by "B" is the break-even point.

Which of the following statements about CVP analysis is false ? a. Total revenues and total costs are linear in relation to output units . b. Managers use (CVP ) analysis to study the behavior of and relationship among the elements such as total revenues , total costs , and income c. All of the given answers are true . d. Unit selling price , unit variable costs , and total fixed costs are known and remain constant . e. Operating income calculations in CVP analysis are based on contribution margin not gross margin .