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Exam 2: Costvolumeprofit Relationships

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Question 131

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Haslem Inc. has provided the following data concerning its only product: Required: Compute the margin of safety in both dollars and as a percentage of sales.

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Question 132

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Mishoe Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The break-even point in unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)

A) 0 units
B) 895 units
C) 700 units
D) 650 units

E) A) and D)
F) B) and C)

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Question 133

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Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The number of units that must be sold to achieve a target profit of $31,500 is closest to:

Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80. The company's monthly fixed expense is $396,480 per month. The unit sales to attain the company's monthly target profit of $13,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

Shambo Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The margin of safety percentage is closest to:

Kelsay Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The variable expense ratio is closest to:

Which of the following is true regarding the contribution margin ratio of a company that produces only a single product?

Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October. If the company sells 3,500 units, its net operating income should be closest to:

In a CVP graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line (sales) and the total fixed expense line.

Data concerning Lemelin Corporation's single product appear below: The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $20 per unit. In exchange, the sales staff would accept a decrease in their salaries of $113,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units. What should be the overall effect on the company's monthly net operating income of this change?

Montesdeoca Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Required: a. If sales decline to 1,900 units, what would be the estimated net operating income? b. If the selling price increases by $4 per unit and the sales volume decreases by 200 units, what would be the estimated net operating income? c. What is the break-even point in dollar sales?

Data concerning Lemelin Corporation's single product appear below: The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Management is considering using a new component that would increase the unit variable cost by $3. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change?

Caneer Corporation produces and sells a single product. Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $44,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

Thornbrough Corporation produces and sells a single product with the following characteristics: The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Management is considering using a new component that would increase the unit variable cost by $11. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

Break-even analysis assumes that:

Stauffer Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The variable expense ratio is closest to:

Data concerning Sinisi Corporation's single product appear below: The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Sebree Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 5% increase in sales is closest to: (Round your intermediate calculations to 1 decimal place.)

Valdez Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The break-even point in unit sales is closest to:

Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is: (Round your intermediate calculations to 2 decimal places.)