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Exam 2: Costvolumeprofit Relationships

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Question 41

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Kuzio Corporation produces and sells a single product. Data concerning that product appear below: The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

A) increase of $2,280
B) increase of $7,280
C) decrease of $5,000
D) decrease of $2,280

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

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Question 42

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

A) $162,000
B) $117,000
C) $0
D) $173,700

E) A) and C)
F) All of the above

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Question 43

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Bois Corporation has provided its contribution format income statement for January. If the company's sales increase by 7%, its net operating income should increase by about: (Round your intermediate calculations to 2 decimal places.)

A company sells two products--J and K. The sales mix is expected to be $3 of sales of Product K for every $1 of sales of Product J. Product J has a contribution margin ratio of 40% whereas Product K has a contribution margin ratio of 50%. Annual fixed expenses are expected to be $120,000. The overall break-even point for the company in dollar sales is expected to be closest to:

Rushenberg Corporation's operating leverage is 10.8. If the company's sales increase by 14%, its net operating income should increase by about:

Rachal Corporation produces and sells a single product whose selling price is $150.00 per unit and whose variable expense is $57.00 per unit. The company's monthly fixed expense is $381,300. Required: a. Assume the company's monthly target profit is $9,300. Determine the unit sales to attain that target profit. Show your work! b. Assume the company's monthly target profit is $18,600. Determine the dollar sales to attain that target profit. Show your work!

Majid Corporation sells a product for $240 per unit. The product's current sales are 41,300 units and its break-even sales are 36,757 units. What is the margin of safety in dollars?

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $28,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October. If the company sells 3,600 units, its total contribution margin should be closest to:

Speckman Enterprises, Inc., produces and sells a single product whose selling price is $200.00 per unit and whose variable expense is $68.00 per unit. The company's monthly fixed expense is $514,800. Assume the company's target profit is $12,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.)

Which of the following is correct? The break-even point occurs on the CVP graph where:

Hopi Corporation expects the following operating results for next year: What is Hopi expecting total fixed expenses to be next year?

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

In July, Meers Corporation sold 3,700 units of its only product. Its total sales were $107,300, its total variable expenses were $66,600, and its total fixed expenses were $34,800. Required: a. Construct the company's contribution format income statement for July. b. Redo the company's contribution format income statement assuming that the company sells 3,400 units.

Zanetti Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)

The following information pertains to Nova Co.'s cost-volume-profit relationships: How much will be contributed to net operating income by the 1,001st unit sold?

Derst Inc. sells a particular textbook for $140. Variable expenses are $25 per book. At the current volume of 6,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:

Ferkil Corporation manufacturers a single product that has a selling price of $100 per unit. Fixed expenses total $225,000 per year, and the company must sell 5,000 units to break even. If the company has a target profit of $67,500, sales in units must be:

A tile manufacturer has supplied the following data: What is the company's unit contribution margin? (Round your intermediate calculations to 2 decimal places.)

Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 units, the net operating income would be closest to: