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| 1 | |
The difference between unit sales price and unit variable cost is the: |
| | A) | unit contribution margin. |
| | B) | total contribution margin. |
| | C) | contribution margin ratio. |
| | D) | margin of safety in units. |
| | E) | breakeven point in units. |
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| 2 | |
Beta Corporation has the following information for a product called Beta. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]>
What is the unit contribution margin? |
| | A) | $24 |
| | B) | $20 |
| | C) | $16 |
| | D) | $12 |
| | E) | $40 |
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| 3 | |
Beta Corporation has the following information for a product called Beta.<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> What is the breakeven in sales dollars? |
| | A) | $80,000 |
| | B) | $48,000 |
| | C) | $32,000 |
| | D) | $133,333 |
| | E) | $200,000 |
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| 4 | |
Beta Corporation has the following information for a product called Beta.<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> What is the number of units needed to achieve $40,000 in annual before tax profits? |
| | A) | 5,000 units |
| | B) | 7,500 units |
| | C) | 3,000 units |
| | D) | 2,000 units |
| | E) | 2,500 units |
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| 5 | |
Beta Corporation has the following information for a product called Beta.<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> What is the number of units needed to achieve $21,000 in annual after tax profits assuming a 30 percent tax rate? |
| | A) | 9,017.86 units |
| | B) | 6,312.50 units |
| | C) | 6,875 units |
| | D) | 7,500 units |
| | E) | 2,500 units |
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| 6 | |
What does the variable "N" represent in the following equation:
p × Q = F + v × Q + N |
| | A) | Units sold. |
| | B) | Total revenue. |
| | C) | Unit selling price. |
| | D) | Operating profit. |
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| 7 | |
In activity-based costing, CVP analysis is modified to measure the impact of creating cost drivers for detailed-level indirect cost activities. This generally results in: |
| | A) | higher fixed costs and lower variable costs. |
| | B) | lower fixed costs and higher variable costs. |
| | C) | higher fixed costs with no change in variable costs. |
| | D) | lower fixed costs with no change in variable costs. |
| | E) | no discernible change in either fixed or variable costs. |
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| 8 | |
A relatively high margin of safety ratio for a product is usually an indication that the product: |
| | A) | is losing money. |
| | B) | has a high contribution margin. |
| | C) | is riskier than a product with a lower margin of safety. |
| | D) | is less risky than a product with a lower margin of safety. |
| | E) | requires heavy fixed cost to produce or sell. |
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| 9 | |
A higher value of __________ indicates a higher risk in the sense that a given change in sales will have a relatively greater impact on profits. |
| | A) | Operating Leverage. |
| | B) | Margin of Safety. |
| | C) | Contribution Margin. |
| | D) | Breakeven in Units. |
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| 10 | |
What key assumption must be made in order to use CVP analysis with multiple products? |
| | A) | Totals costs are held constant. |
| | B) | The product mix is held constant. |
| | C) | The contribution margin in dollars is held constant. |
| | D) | The breakeven in units is held constant. |
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| 11 | |
In planning product mix for maximum profit, CVP analysis would stimulate sales of the product by increasing sales of the product with the highest: |
| | A) | sales price. |
| | B) | variable cost per unit. |
| | C) | contribution margin. |
| | D) | fixed cost. |
| | E) | emphasis on customer priority. |
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| 12 | |
Fran Corporation has the following information pertaining to its two products: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch12.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]>
Fran Corporation’s fixed costs are $288,000, and it sells two units of A for every three units of B.
Assume sales mix is constant in sales units. How many units of A and B would be sold at breakeven, respectively? |
| | A) | 800 units of A and 1,200 units of B. |
| | B) | 160 units of A and 240 units of B. |
| | C) | 240 units of A and 160 units of B. |
| | D) | 100 units of A and 300 units of B. |
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| 13 | |
Fran Corporation has the following information pertaining to its two products:<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025532/966298/ch12.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> Fran Corporation’s fixed costs are $288,000, and it sells two units of A for every three units of B.
Assume that sales mix is constant in sales dollars. What is the total revenues for product A and for product B at breakeven, respectively? |
| | A) | $800,000 for A and $1,200,000 for B. |
| | B) | $100,000 for A and $300,000 for B. |
| | C) | $160,000 for A and $480,000 for B. |
| | D) | $480,000 for A and $160,000 for B. |
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| 14 | |
University Pharmacy provides certain medications to students free of charge. Currently, 60 percent of the pharmacy's costs are fixed; the other 40 percent are variable. The pharmacy's budget was $600,000 last year, but the university recently cut this year's budget by 10 percent. What is the percentage decrease in the amount of services the student pharmacy can provide this year? |
| | A) | 25 percent decrease |
| | B) | 20 percent decrease |
| | C) | 15 percent decrease |
| | D) | 10 percent decrease |
| | E) | 5 percent decrease |
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| 15 | |
The CVP model assumes that over the relevant range of activity: |
| | A) | the margin of safety is positive. |
| | B) | operating leverage is positive. |
| | C) | unit variable cost is constant. |
| | D) | total fixed costs are less than total variable costs. |
| | E) | None of the above answers is correct. |
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