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Exam 5: Cost-Volume-Profit Relationships

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Question 1

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Maruska Corporation has provided the following data concerning its only product: What is the margin of safety in dollars?

A) $4,505,760
B) $858,240
C) $3,576,000
D) $5,364,000

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

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Question 2

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Certosimo Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Required: a. If sales increase to 7,040 units, what would be the estimated increase in net operating income? b. If sales decline to 6,900 units, what would be the estimated net operating income?

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a. The increase in net operati...

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Question 3

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Data concerning Strite Corporation's single product appear below: Assume the company's target profit is $8,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.)

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:

Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $43,000 and variable expenses of $11,980. Product X96N had sales of $56,000 and variable expenses of $14,750. The fixed expenses of the entire company were $46,180. The break-even point for the entire company is closest to:

Bendel Incorporated has an operating leverage of 5.9. If the company's sales increase by 10%, its net operating income should increase by about:

The following data are available for the Phelps Corporation for a recent month: The break-even sales for the month for the company is closest to:

Valdez 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 $24,000 is closest to:

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

Zaccaria Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Required: a. What is the contribution margin ratio? b. If sales increase to 5,040 units, what would be the estimated increase in net operating income? c. If the selling price increases by $4 per unit and the sales volume decreases by 400 units, what would be the estimated net operating income? d. What is the break-even point in unit sales? e. What is the margin of safety in dollars? f. What is the degree of operating leverage?

Derst Incorporated 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:

Sarratt Corporation's contribution margin ratio is 73% and its fixed monthly expenses are $35,000. Assume that the company's sales for May are expected to be $94,000.Required: Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change.

Dacosta Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is: (Round your intermediate calculations to 2 decimal places.)

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:

Hawver Corporation produces and sells a single product. Data concerning that product appear below: Required:Assume the company's monthly target profit is $19,800. Determine the unit sales to attain that target profit.

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

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.)

Heathman Incorporated produces and sells a single product. The selling price of the product is $230.00 per unit and its variable cost is $89.70 per unit. The fixed expense is $308,660 per month.The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Alpha Corporation reported the following data for its most recent year: sales, $1,000,000; variable expenses, $600,000; and fixed expenses, $300,000. The company's degree of operating leverage is closest to:

Wimpy Incorporated produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit. The fixed expense is $366,915 per month.The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)